The end of offshore tax havens?

Written by Andrew Henderson

Dateline: Tbilisi, Georgia

Bernie Sanders and Donald Trump have more in common than you would expect.

For one, the success of both candidates thus far is largely fueled by the widespread discontent of the American people with the establishment. Both are what you could call extremist candidates — one is an extreme right-wing fascist and the other an extreme left-wing socialist.

And both want to terminate the use of offshore tax havens.

How? It’s simple really. You see, the US is already one of only two countries in the world to tax its citizens on any income they earn in a given year, regardless of where they earned it or where they were living when they did. So all Big Government has to do is apply the same rule to corporations and they’re good to go.

Apparently the US government hasn’t been able to pay off (or even stabilize) its national debt by squeezing every last cent from each US person on the planet, so the idea of turning corporations into citizens suddenly appeals to both ends of the spectrum.

Never mind the fact that the left has been arguing for years that corporations aren’t people — even Obama argued that “corporations aren’t people, people are people” — when it suddenly becomes convenient for the government to treat corporations as citizens in order to take more of their money, making corporations people is suddenly a great idea.

And with groups like “Citizens for Tax Justice”, with a name that 95% percent of the population could never oppose, who could argue against such sound logic?

But groups like these are out for blood. And the result is that life is made harder for 95% of us who are honest and follow the law.

For instance, just in my small circle, I know of more than 12 people who have had Hong Kong bank accounts frozen or closed. One guy had to send $3 million back to the US when his account was shuttered.

This is the result of higher regulations from banks and governments who are frantically shooting arrows into the sky hoping to strike down the bad guy. Honest people get the shaft, while criminals find a way to be criminals (sound familiar?).

Of course, “Citizens for Tax Justice” SHOULD be a group focused on ending citizenship-based taxation. The US, after all, is the only country oppressive enough to make such a demand of its citizens.

Citizenship-based taxation is what makes it impossible for my friends’ 11-year-old daughter to open a kiddie savings account in Switzerland where she lives… all because her dad was an American when she was born.

But instead of pursuing real tax justice, these organizations promote laws that punish us all just to spite a few big fish.

You still have time

Of course, politicians want companies to bring their money back home. They do it so they can take it at whim. Companies “go where they’re treated best”, and like an abusive boyfriend angry his girlfriend wised up and left, politicians want to get corporations back under their control.

The good news is that the US populace has yet to elect Bernie or Trump. So (for now), you can still leave and search for the best place. Just don’t think anyone will like you… but who cares?

The reality is, the US is in a bad place. Candidates like Trump and Sanders have only recently brought that news to the attention of a bigger audience, but you and I already saw the trend. The truth is, no politician will unravel the war on privacy, or significantly lower taxes, or un-do FATCA.

No politician will save you. Period. Plan accordingly.

If you’re an expat or offshore, you have to have your own Plan B, whether that’s a second passport, an offshore company, etc. Focus on countries that are small and haven’t had the hammer drop on them.

Don’t follow the crowds. If you read blog posts by digital nomads in Chiang Mai, you’ll get the same strategy 825,000 other people have already done. By that time, it may be too late (i.e. the Hong Kong bank account that is plaguing so many people).

Open bank accounts in countries that are still friendly, rather than following the herd. (The Caucuses where I am now are still easy, although two of the three countries have a weak reputation).

The bottom line is that when you’re living in a country where the extreme right-wing fascist and the left-wing socialist both want to impose one-tax taxes on capital overseas, force repatriation of legally parked offshore cash and not allow companies to leave US shores, you’ve got a problem.

The side effect is your small business will be hit a lot harder… but you can do an inversion of your own by moving offshore with an offshore company.

Start planning and act now before an upset electorate decides your fate for you.

To learn more about preparing for taxes under a Bernie Sanders presidency, read here. Or go to this article to learn more about what a Trump presidency would do to the US economy.

If you are ready to make a plan and execute it, apply for a Strategy Call today and together we can design your personalized offshore strategy.

Andrew Henderson
Last updated: Dec 27, 2019 at 3:13PM

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3 Comments

  1. JOE PLOMMER

    Most people would agree that if you live in country X, and make your income in country X, you should not have to pay taxes to country Y.

    But the object of most offshoring is not to uphold this logic, but to escape it: companies don’t want to pay the taxes set by the elected governments of the places where their money is made, and so attempt to artificially domicile themselves in low-tax jurisdictions to which they have no real connection.

    Your notion of tax justice is a transparent sham

    Reply
    • Andrew Henderson

      Small business-owning entrepreneurs are far different than Starbucks, in that Starbucks requires physical locations and location independent businesses don’t.

      Reply
  2. Joseph Plommer

    I didn’t mention Starbucks.

    Location-independent businesses are all different, but one thing most have in common is that they don’t actually do their business in tax havens.

    Reply

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