The Sovereign Man?

[rylemdr]

I've been reading up a lot about offshore accounts and reducing taxes lately. I'm been worried that my country(not saying which one to avoid making this a political post) is not going the way I would like it to(to be honest, I guess it's not going the way I think would benefit ME the most). I stumbled on this website recently

http://www.sovereignman.com/

Basically it talks about being a free citizen of the world. It talks about "planting flags" in different countries, creating bank accounts, trusts, companies, etc. with global diversification in mind. The thought the website imparted to me is that if I wouldn't put my investments all in one basket, why would I put myself in the mercy of only one government? I am not particularly patriotic so these thoughts are pretty rational for me.

I think most of you will find that the thoughts of the author are a bit paranoid, as I have, but he makes a lot of sense in some of his topics. I only started reading today, so I haven't gotten to the point of where he talks about investing in mutual funds yet or if it is even possible with what he's doing or if he even talks about it. I'll keep reading tomorrow at lunch.

My net worth is still very little and I know most of what the author says doesn't relate to me yet, but it might be good to plan ahead.

He requires payment for him to divulge most his "secrets", but I think somewhere out there a highly talented lawyer/accountant will be able to provide the same info for much cheaper. What do you guys think?

I have to admit that I only clicked on this website hoping to learn more about tax avoidance. :lol

[Valuethinker]

I've been reading up a lot about offshore accounts and reducing taxes lately. I'm been worried that my country(not saying which one to avoid making this a political post) is not going the way I would like it to(to be honest, I guess it's not going the way I think would benefit ME the most). I stumbled on this website recently

http://www.sovereignman.com/

Basically it talks about being a free citizen of the world. It talks about "planting flags" in different countries, creating bank accounts, trusts, companies, etc. with global diversification in mind. The thought the website imparted to me is that if I wouldn't put my investments all in one basket, why would I put myself in the mercy of only one government? I am not particularly patriotic so these thoughts are pretty rational for me.

I think most of you will find that the thoughts of the author are a bit paranoid, as I have, but he makes a lot of sense in some of his topics. I only started reading today, so I haven't gotten to the point of where he talks about investing in mutual funds yet or if it is even possible with what he's doing or if he even talks about it. I'll keep reading tomorrow at lunch.

My net worth is still very little and I know most of what the author says doesn't relate to me yet, but it might be good to plan ahead.

He requires payment for him to divulge most his "secrets", but I think somewhere out there a highly talented lawyer/accountant will be able to provide the same info for much cheaper. What do you guys think?

I have to admit that I only clicked on this website hoping to learn more about tax avoidance. :lol

EDIT: in the post below, I assumed you are American. Even if you are not, the kind of language on that website has 'fraud' written all over it 'citizen of the world' etc. It's not that easy. Giving up your domicile is a very difficult thing to do in this world.

Alan Stanford is just coming to trial. Or google Bernie Cornfeld, Robert Vesco and IOS. Both worth a read.

I think what you have here is straight fraud. Along the lines of the Nigerian who wants to invest your money to earn a huge return.

Americans pay tax globally wherever they reside. Avoiding that is almost impossible and the penalties for getting caught ain't pretty. Ask the head of UBS private banking in the USA what a trip to Riker's Island was like (that was for smuggling client money out in diamonds in tubes of toothpaste, amongst other tricks).

Also google penalties under money laundering legislation. Any reputable international financial adviser, aware they can go to prison for failing to report the suspicion of tainted money, will steer a mile away from all but the cleanest of American money (ie a genuine expat, with a job with a reputable international firm etc.).

Admit your situation. As an American citizen you are going to pay your government tax. Concentrate on minimizing expenses and maximizing use of legal tax deferred vehicles.
Believe me the offshore world is full of people who invest there for tax reasons, and any 'gain' they make is then eaten up by advisor fees, trust fees, invisible fees.

Also note the protections on offshore investing are weak compared to onshore. THERE IS NO DEPOSIT INSURANCE IN JERSEY.

Think about that in light of the recent financial crisis.

[Valuethinker]

I've been reading up a lot about offshore accounts and reducing taxes lately. I'm been worried that my country(not saying which one to avoid making this a political post) is not going the way I would like it to(to be honest, I guess it's not going the way I think would benefit ME the most). I stumbled on this website recently

http://www.sovereignman.com/

Basically it talks about being a free citizen of the world. It talks about "planting flags" in different countries, creating bank accounts, trusts, companies, etc. with global diversification in mind. The thought the website imparted to me is that if I wouldn't put my investments all in one basket, why would I put myself in the mercy of only one government? I am not particularly patriotic so these thoughts are pretty rational for me.

There is a species of entrepreneur that thinks the worst thing in the world is paying taxes.

Such are easy meat for 'financial advisers'. Citizen of the world. Well mate, with modern money laundering rules it is difficult or impossible to open up international bank accounts. Not impossible of course. US citizens will find it particularly hard.

Under EU rules now there is a much higher level of reporting from tax havens back to member governments. They have really cracked down.

If you are in Italy etc. you can (and many Italians do) open up a bank account in Switzerland (is France safe? We are no longer sure). Probably you should. If you are Greek, you absolutely should. But note the Garda Di Finanza stops cars and does money checks on the highway to Lugano.

Opening up a trusteed account so for example you can hold stocks and bonds offshore is harder, but with enough money someone in Jersey etc. would be willing to do that. Again, if you are American, that's a lot harder because of IRS rules on global income (no one wants to be a participant in your tax evasion).

[TedSwippet]

...Opening up a trusteed account so for example you can hold stocks and bonds offshore is harder, but with enough money someone in Jersey etc. would be willing to do that. Again, if you are American, that's a lot harder because of IRS rules on global income (no one wants to be a participant in your tax evasion).

For "a lot harder" read "mostly impossible". And that's for everyone, both tax evader and perfectly ordinary US person trying to live a normal life in a country other than the US. A small sample:

Spiegel: European Banks Stop Serving American Customers
EfinancialNews: Private banks show US clients the door
WSJ: Toxic Citizens

[nisiprius]

rylemdr, the world is a big place and you and I are not a large part of it. We may not like the idea of being relatively powerless in comparison to The Government, but it's the truth. "They" have an army and a navy, to say nothing of the FBI and the IRS (it was tax evasion that took Al Capone down).

Given your feelings, when it is time for you to start investing in mutual funds, you might be a candidate for making the Vanguard Total World Stock Index Fund your core stock holding. It won't make you a Sovereign Man, it's just a sensible, mainstream, Bogleheadish mutual fund.

Don't kid yourself into thinking you can write a few pieces of paper and make a few confident assertions and open a couple of accounts and declare yourself a "free man," citizen of the world, invulnerably shielded from interference by any government. I agree with others that I perceive this website to be a scam. "You can't cheat an honest man," and most scams depend on the mark believing he's been invited to participate in something illegal or dishonest. If you pay this guy money, you'll get a useless report--and perhaps an invitation to spend more money to buy the real secrets--and he'll be in the clear because he never said anywhere that he was going to show you how to do anything illegal, in fact he makes a point of saying it's all legal.

Sure, he's right that things could collapse, and that simply living in a country where more than lip service is paid to the rule of law might not protect us. We have to live with that knowledge. There's no point in thinking there's something cheap, easy, and legal that will give us an invulnerable shield of protection. So in addition to "you can't cheat an honest man," add "if it seems too good to be true, it probably is."

P.S. If you want to read a funny old story about a Sovereign Man circa 1906, go to The Four Million, by O. Henry and read "A Cosmopolite in a Cafe."

[cjking]

I came across someone advocating something similar to this over 20 years ago. They weren't advocating anything illegal and I don't think it was a fraud, I think their potential profit was just a small amount from selling a pamphlet/book outlining the possibilities in more detail. I agree that I don't think it would work for an American today. The sort of person it might have worked for then (and might still work for today) would be a contract worker (say computer programmer) who is not a US citizen and who is willing to be truly multinational in where he lives/works. (So not someone with a settled family he wants to actually be in the same country as for most of each year.) I was about as close to being the sort of person it was suitable for as I could be, and yet it didn't seem worth the trouble to me.

[VictoriaF]

There is a significant appeal in becoming a "citizen of the world". But when it is conflated with tax evasion or real estate promotions, it is usually fraud. And being free to explore the world is not equivalent to being sovereign or independent from any financial or other obligations to other citizens of the world.

Victoria

[cjking]

Just to illustrate that being multi-national can work for some people, even though it's not quite the kind of scenario I was talking about in my previous post, there is the famous (in the UK) example of Phillip Green, whose wife owns "his" British businesses while being tax-resident in Monaco. (According to the wikipedia article below, hundreds of millions in tax avoided.)

http://en.wikipedia.org/wiki/Philip_Green

[Valuethinker]

There is a significant appeal in becoming a "citizen of the world". But when it is conflated with tax evasion or real estate promotions, it is usually fraud. And being free to explore the world is not equivalent to being sovereign or independent from any financial or other obligations to other citizens of the world.

Victoria

There are no 'citizens of the world' except in their own heads (and when someone tells me that, I usually find it is a patronizing tone-- not pinning that on you).

There are just people with good passports (US, European, Canadian, Australian, New Zealand, maybe Japanese, Swiss) and people without good passports (the rest of them). Try being an Indian or Jamaican or Nigerian trying to get into US or UK some time-- just for fun. Or someone from Syria or Afghanistan into Europe. We don't know we were born.

Even then the hassle I get going into the USA, and I certainly cannot work there. JFK and Miami give me nightmares.

If you have enough money to not need to work, and you don't particular care about property ownership, then you can 'free' yourself to travel & live in many places. Subject to visas.

Doors close as you get older. Over 26 a lot of the working visas don't work any more. If you are the sort of international professional that companies covet that's a bit easier.

Diplomatic passports of course are 'nice' but they come with other responsibilities: 1979 and the Iran Embassy seizure is surely not so long ago that we do not remember it?

[Valuethinker]

Just to illustrate that being multi-national can work for some people, even though it's not quite the kind of scenario I was talking about in my previous post, there is the famous (in the UK) example of Phillip Green, whose wife owns "his" British businesses while being tax-resident in Monaco. (According to the wikipedia article below, hundreds of millions in tax avoided.)

http://en.wikipedia.org/wiki/Philip_Green

Wiki is in substance correct. Yes the Greens avoided a huge amount of tax.

They are European citizens though and AFAIK she has not taken out Monacco citizenship?


The interesting question is what their marital agreement says if she divorces him?

[bvp]

Consider this sobering stat - only 22% of the world's population have access to computers. You're one of them. That is merely because you were lucky enough to be born where you were born. That's it. Pure luck. You were lucky enough to be born in a country that has a good socio-economical structure and you were even born in the top half of that overall class structure.

And you're bitter to your country why, if I may ask?

[abuss368]

Simple - cost vs. benefit.

Had an advisor once ask the question to the class: What is the difference between tax planning and tax avoidance? Answer - jail time.

[TedSwippet]

Had an advisor once ask the question to the class: What is the difference between tax planning and tax avoidance? Answer - jail time.

Then he was a poor advisor. That's the difference between tax avoidance and tax evasion.

[bottlecap]

You were lucky enough to be born in a country that has a good socio-economical structure and you were even born in the top half of that overall class structure.

And you're bitter to your country why, if I may ask?

Because people long to be free. No one is truly free, however, it's all a matter of degree. The fact that you're lucky enough that your spouse beats with only a 1/2 inch diameter stick doesn't mean you can't - or are wrong to - long for a spouse that only has access to a 1/4 inch stick.

That said, and to the OP, this stuff does have scam written all over it. I don't like taxes, but the idea behind them is based on a legitimate need to run a government and, remember, they're not the worst thing in the world. You can be free and pay taxes, too. This type of scam takes advantage of your natural bias against them and your natural desire to be more free.

Whatever country you live in, assuming there's not a better one to move to, your best bet is to take steps to change it.

JT

[Valuethinker]

You were lucky enough to be born in a country that has a good socio-economical structure and you were even born in the top half of that overall class structure.

And you're bitter to your country why, if I may ask?

Because people long to be free. No one is truly free, however, it's all a matter of degree. T

I actually question whether people long to be free.

My own experience is people long to have an illusion of freedom, but in a context where validating signals about their life choices are sent to them constantly.

In other words, people long to be in the majority. Even 'alternatives' tend to adopt the same attitudes, thoughts, tatoos, piercings, closing styles etc. Gawd help the 15 year old who is truly different.

Genuinely independent characters (think of how few Marxists one meets nowadays) or people with very alternative ways of dressing and behaving, get trashed upon.

There is a bit of Victor Frankel, Man's Search for Meaning, in all this (he was a prisoner at Auschwitz). The only true freedom is the one you construct in your own head.

Or as the cartoon says 'On the internet no one knows you are a dog' .

[Valuethinker]

Had an advisor once ask the question to the class: What is the difference between tax planning and tax avoidance? Answer - jail time.

Then he was a poor advisor. That's the difference between tax avoidance and tax evasion.

Ted - in English English you are of course correct. Avoidance is legal, evasion is not.

Not sure in US English?

[Valuethinker]

And you're bitter to your country why, if I may ask?

Most of us overrate what we put in and underrate what we take out.

In particular the 'insurance element' and 'risk pooling' of society: law and order, national defence, air traffic control, environmental regulation, zoning, road building, airports, unemployment insurance, medical insurance, education, etc.

This benefits us *even if we don't make use of it* because the people around us do use it, and so for example their kids are educated, clothed etc.

And things that we *might* use, in extremity, eg Gawd forbid I should have cancer, but hopefully never will use- -all that research into cancer treatment, facilities, hospices etc. It exists I might, or someone I love might, use it some day.

Man in a state of nature is a savage. It's only the structures and conventions of society which give him survival above the bare beast.

If the Gothic Cathedral is the greatest creation of western civilization (along with the music played in such-- think Handel, Bach etc.) then that was only created by taxing generations, for the betterment of future generations.

[rylemdr]

I am not bitter towards my country. Valuethinker is right when he talks about a species of entrepreneur that thinks the worst thing in the world is paying taxes. I guess I am one of them.

There is also an article about rich Americans renouncing their citizenship because of the global taxation that the country imposes.

http://www.dailyfinance.com/2010/07/20/ ... wer-taxes/

Perhaps having U.S. citizenship is a curse, rather than a benefit compared to say, Canadian citizenship when one is rich?

Like I said, I'm not particularly patriotic so renunciation of one's citizenship is not out of the question.

[gkaplan]

Don't let the door hit you on the way out.

[VictoriaF]

There is a significant appeal in becoming a "citizen of the world". But when it is conflated with tax evasion or real estate promotions, it is usually fraud. And being free to explore the world is not equivalent to being sovereign or independent from any financial or other obligations to other citizens of the world.

Victoria

There are no 'citizens of the world' except in their own heads (and when someone tells me that, I usually find it is a patronizing tone-- not pinning that on you).

There are just people with good passports (US, European, Canadian, Australian, New Zealand, maybe Japanese, Swiss) and people without good passports (the rest of them). Try being an Indian or Jamaican or Nigerian trying to get into US or UK some time-- just for fun. Or someone from Syria or Afghanistan into Europe. We don't know we were born.

Even then the hassle I get going into the USA, and I certainly cannot work there. JFK and Miami give me nightmares.

If you have enough money to not need to work, and you don't particular care about property ownership, then you can 'free' yourself to travel & live in many places. Subject to visas.

Doors close as you get older. Over 26 a lot of the working visas don't work any more. If you are the sort of international professional that companies covet that's a bit easier.

Diplomatic passports of course are 'nice' but they come with other responsibilities: 1979 and the Iran Embassy seizure is surely not so long ago that we do not remember it?

When I wrote "citizen of the world" I had in mind people like Paul and Vicki Terhorst and the poster kramer. I realize that the phrase has many interpretations.

Victoria

[Valuethinker]

I am not bitter towards my country. Valuethinker is right when he talks about a species of entrepreneur that thinks the worst thing in the world is paying taxes. I guess I am one of them.

There is also an article about rich Americans renouncing their citizenship because of the global taxation that the country imposes.

http://www.dailyfinance.com/2010/07/20/ ... wer-taxes/

Perhaps having U.S. citizenship is a curse, rather than a benefit compared to say, Canadian citizenship when one is rich?

Like I said, I'm not particularly patriotic so renunciation of one's citizenship is not out of the question.

Apparently the IRS really hates you if they think you are renouncing for tax purposes.

I urge you to live in 3-4 years for Switzerland, say, before you opt. Oh and by the way, your community will vote on your citizenship application-- after they inspect your home for tidiness. If you choose to live in Dubai, please don't get into a traffic accident with a local, the police will view you as guilty until proven guilty-- you'll spend any number of months in a stinking jail waiting for your trial. And don't you dare default on a debt (they have debtors prisons, and the bank is legally required to notify the government so they can stop you flying out of the country). Your civil rights in Hong Kong are indeed an interesting question.

You might like the UK but you'll get the mick taken out of you for being American-- 30 years after you move here. You might even tire of being reminded of the gap between September 3rd 1939 (the day WWII was declared and we went to war to defend Poland) and December 7th 1941 (the date the last major combatant, the USA, joined the struggle to save civilization). . . Canadians in their own sweet way can be even worse .

Sometimes the worst thing that happens in life is that you get what you want-- and have to live with the consequences.

Don't knock being an American until you've tried some of the alternatives. Ditto don't knock that 33% tax rate.

Personally I would recommend relaxing and moving to New Hampshire. No state income tax, nice people, nice place, beautiful seasons. You can pay for the snow removal.

[Valuethinker]

When I wrote "citizen of the world" I had in mind people like Paul and Vicki Terhorst and the poster kramer. I realize that the phrase has many interpretations.

Victoria

As per my private message, this was not intended as a gibe against you nor against your usage.

I unreservedly apologize if it came across as snarky or critical of you.

Just generally I have found that it doesn't have meaning. We are not citizens of the world. We are citizens of countries in the world, and some of us have the enormous privilege of being able to choose to live outside the land of our births. Not many of us.

[steadyeddy]

I have passports from both the U.S. and Switzerland, but I can't for the life of me see any significant benefits to this arrangement beyond the freedom to live and work in more places. The U.S. takes what you owe no matter where you're living and working, and a second passport doesn't trump the first on this issue. With the EU increasing the level of differentiation between who is "in" and who is "out," I fear I won't even be eligible to work in the EU in the future.

[TedSwippet]

Had an advisor once ask the question to the class: What is the difference between tax planning and tax avoidance? Answer - jail time.

Then he was a poor advisor. That's the difference between tax avoidance and tax evasion.

Ted - in English English you are of course correct. Avoidance is legal, evasion is not.

Not sure in US English?

It's the same in both.

http://en.wikipedia.org/wiki/Tax_noncom ... nd_evasion

United States

In the United States "tax evasion" is evading the assessment or payment of a tax that is already legally owed at the time of the criminal conduct.[8] Tax evasion is criminal, and has no effect on the amount of tax actually owed, although it may give rise to substantial monetary penalties.

By contrast, the term "tax avoidance" describes lawful conduct, the purpose of which is to avoid the creation of a tax liability in the first place. Whereas an evaded tax remains a tax legally owed, an avoided tax is a tax liability that has never existed.

[TedSwippet]

Don't let the door hit you on the way out.

Yup. That quip's always a rib tickler.

[NoVa Lurker]

OP - I think you should pay Sovereign Man and see what those secrets are. If you become a Sovereign Man, too, and live all over the world, think of how many remote controls you will have!

When I stay at a hotel, the first thing I do is take the remote control and hide it in my bag. Then I call front desk to tell them I have no remote control. They then send in a new one and I swap it with the old(free remote control! ). I also keep the hotel towels and bath robes if they are nice. Sometimes, I can sneak in the buffet and get a free meal if the maitre d isn't careful. I can also get away with a few fancy silverware to bring to my home.

Occasionally, I am also known to pull a strand of hair from my head and put it in the food if I am at a restaurant. Sometimes they comp the meal, the whole table(if it's just a few of us and the bill isn't too big), or sometimes just drinks, or they give me a gift card. Either way, I win!

[bottlecap]

I actually question whether people long to be free.

My own experience is people long to have an illusion of freedom, but in a context where validating signals about their life choices are sent to them constantly.

Perhaps you are right. A proviso, then: Because the thinking, self-aware person yearns to be free.

JT

[InternationalMan]

He requires payment for him to divulge most his "secrets", but I think somewhere out there a highly talented lawyer/accountant will be able to provide the same info for much cheaper. What do you guys think?

I like to think that I am well traveled internationally. The "secret" is that there is no secret. The website is overly sensationalistic and reads a bit like an infomercial. I have not paid to get access but I would venture that the information contained is worth about US$7.99, or about the price of a magazine.

I'm not sure who the website is marketed towards. Unless one's net worth is at least several million US$, one does not need any of this kind of planning. If one's net worth worth that much, then one should have wealth planning lawyers and accountants on retainer. In any case why would any right thinking person be taking this kind of advice from a website!

[imagardener]

You might enjoy reading/listening to some of Jimmy Rogers books like
http://www.amazon.com/Adventure-Capital ... t_ep_dpt_4
and/or
http://www.amazon.com/Investment-Biker- ... t_ep_dpt_3
Remember to buy them through the bogleheads link

We listened to the Biker book while driving from Delaware to Florida a few years ago, very interesting, funny and fresh air of a down-to-earth financial guy not trying to sell you anything. He visited many, many countries (in both books) and opened up bank accounts in quite a few. Not to avoid taxes but to diversify his money and to have a real-world attachment to each country. In view of the fact that he married, had children and moved to Singapore it looks like he made the trips as research before picking up stakes and moving.

I think there is something to be said for diversity of money and countries, that is in fact what really wealthy people do, own homes and investments across the planet.

There are easier ways to own foreign currency of course (Everbank, Fidelity, ETrade) and I would never ever give up my US citizenship but then I am someone that thinks US taxes are a fantastic bargain (like Warren Buffet with nowhere near his money).

[rylemdr]

I think the prices he charges are excessive too. I don't plan on paying for the extra information he offers.

I've found very little to no information about tax avoidance in the internet though. Most websites that pop up are criticisms against it. There aren't any "how to's" or any detailed info on the subject. It seems as if it is a taboo subject which is surprising because minimizing taxes in any way possible should be part of any wealthy individual's financial plan.

I even tried to look for "how to's" on the subject of Google's "Dutch sandwich" tax scheme(which is perfectly legal, ofcourse) and there is little info.

Certainly someone out there must know the ins and outs of the subject, and with the scope of the internet, there should be some decent amount of information regarding tax avoidance. That is the only reason why I was so interested in the website.

I even tried looking for "tax haven" in the Bogleheads search feature and couldn't find anyone talking about it.

[rylemdr]

You might enjoy reading/listening to some of Jimmy Rogers books like
http://www.amazon.com/Adventure-Capital ... t_ep_dpt_4
and/or
http://www.amazon.com/Investment-Biker- ... t_ep_dpt_3
Remember to buy them through the bogleheads link

We listened to the Biker book while driving from Delaware to Florida a few years ago, very interesting, funny and fresh air of a down-to-earth financial guy not trying to sell you anything. He visited many, many countries (in both books) and opened up bank accounts in quite a few. Not to avoid taxes but to diversify his money and to have a real-world attachment to each country. In view of the fact that he married, had children and moved to Singapore it looks like he made the trips as research before picking up stakes and moving.

I think there is something to be said for diversity of money and countries, that is in fact what really wealthy people do, own homes and investments across the planet.

There are easier ways to own foreign currency of course (Everbank, Fidelity, ETrade) and I would never ever give up my US citizenship but then I am someone that thinks US taxes are a fantastic bargain (like Warren Buffet with nowhere near his money).

Thanks for the recommendations. I will try to find a way to get these books

[market timer]

I've found very little to no information about tax avoidance in the internet though.

Some of the best schemes are discussed regularly here: optimal asset location, backdoor Roth, 401K, tax loss harvesting, savings bonds for college education, saver's tax credit, mortgage interest deduction, college tuition credits, grouping deductions in alternating tax years, charitable donations of stuff you don't want anymore, foreign tax credits, etc.

[rylemdr]

I've found very little to no information about tax avoidance in the internet though.

Some of the best schemes are discussed regularly here: optimal asset location, backdoor Roth, 401K, tax loss harvesting, savings bonds for college education, saver's tax credit, mortgage interest deduction, college tuition credits, grouping deductions in alternating tax years, charitable donations of stuff you don't want anymore, foreign tax credits, etc.

You are right. I guess these are tax avoidance techniques.

Let me re-state my comment.

I've found very little to no information about tax avoidance in the form of using tax havens and shell companies in the internet :lol:

[market timer]

I've found very little to no information about tax avoidance in the form of using tax havens and shell companies in the internet :lol:

Step 1: Make millions.
Step 2: Find tax havens.

Until then, enjoy the crumbs of middle class tax avoidance.

[rylemdr]

I've found very little to no information about tax avoidance in the form of using tax havens and shell companies in the internet :lol:

Step 1: Make millions.
Step 2: Find tax havens.

Until then, enjoy the crumbs of middle class tax avoidance.

Exactly my thoughts!

No harm in dreaming though :p

[MossySF]

This strategy might work if you plan on never returning to the U.S. You'd need a 2nd passport -- hopefully one from a country with free & easy no-visa travel and that won't extradite for tax crimes.

[Mudpuppy]

Every time I see the topic of "sovereign citizens" come up, I can't help but to think about the 60 Minutes news story last year about the more violent faction of this movement... the faction that goes beyond illegal tax evasion and onto violent crime: http://www.cbsnews.com/stories/2011/05/ ... 2666.shtml

[traineeinvestor]

Depending on where you live (place(s) of domicile) and your nationalit(y/ies), there are legitimate ways to manage your affairs to reduce the incidence of taxation. As a gross generalisation (and I am NOT giving any advice here), it helps to (i) not be a citizen of a country which taxes it citizens wherever they live and (ii) only reside in countries which tax residents on their worldwide income for less than the minimum period to be deemed to be resident there. There is, of course, more to it than that....sometimes a lot more.

Depending on your personal circumstances, these sorts of arrangement may or may not be viable.

Regardless, if you are going to go down this route, I would only do it after taking advice from a professional and reputable tax accountant or tax lawyer. It's not worth the grief of either being too aggressive or inadvertantly getting it wrong.

[wriggly]

1a. If possible, obtain a second citizenship for a desirable country.
1b. Alternatively, obtain skills and qualifications that are nearly universally in high demand (e.g. medical).
2. Open accounts in the other country and ensure there is enough money in it to get you started if you lose everything in your current country (government confiscation, sudden rise in discimination against some characteristic you possess).
3. Travel widely to reduce suspicion when you travel in the future.
4. Make friends with people in both countries, and any countries through which you may need to transfer. Be generous with them, it may encourage them to help you in a time of need.
5. Ensure your politicians use your taxes to help those in real need. This may prevent the rise of a popular revolution that doesn't include you.
6. See you in the sun!

[Valuethinker]

I actually question whether people long to be free.

My own experience is people long to have an illusion of freedom, but in a context where validating signals about their life choices are sent to them constantly.

Perhaps you are right. A proviso, then: Because the thinking, self-aware person yearns to be free.

JT

Ahhh... but you are ignoring the subconscious in this.

The lab stuff shows we are far more dependent on what's going on in the group around us and random social influences than we believe.

I used to hang with some very 'alternative' types. But the whole phenomena of in group and out group was manifest. Even with people who really were 'different' there were these trends.

If I said 'People's Liberation Front of Judea' would you get the reference?

http://en.wikipedia.org/wiki/Monty_Pyth ... cal_satire

[Valuethinker]

I have passports from both the U.S. and Switzerland, but I can't for the life of me see any significant benefits to this arrangement beyond the freedom to live and work in more places. The U.S. takes what you owe no matter where you're living and working, and a second passport doesn't trump the first on this issue. With the EU increasing the level of differentiation between who is "in" and who is "out," I fear I won't even be eligible to work in the EU in the future.

Difficult to see that happening with Switzerland but we live in dangerous times....

Yes US citizenship seems to be a particular pain from a taxation point of view.

[Valuethinker]

There are easier ways to own foreign currency of course (Everbank, Fidelity, ETrade) and I would never ever give up my US citizenship but then I am someone that thinks US taxes are a fantastic bargain (like Warren Buffet with nowhere near his money).

The real bargain of American life is called your Constitution and your Supreme Court-- right of habeas corpus. Miranda rights. Bill of Rights. Etc.

I'd probably add the USN and the USMC. Battle Hymn of the Republic. Gettysburg Address. Lincon's Second Inaugural. Franklin Roosevelts First Inaugural. St. Lo and Choisin Reservoir. Aachen. Woody Allen. The late Jim Henson and his Muppets. Big Bird and Sesame Street.

You do lack Her Majesty though. A significant deficiency your Canadian neighbours avoided . Doubtless a late application to the Commonwealth would be considered seriously .

[Epsilon Delta]

The real bargain of American life is called your Constitution and your Supreme Court-- right of habeas corpus. Miranda rights. Bill of Rights. Etc.

You do lack Her Majesty though.

That's one of the advantages. :lol:

While the US has a different approach to American citizens living abroad than some other countries it cuts both ways. Two examples of where the US approach gives benefits.

• US citizens living abroad can vote in US elections;
• The US negotiates for US persons. A US citizen who worked in the UK and earned the state pension and then returned home gets a COLA, unlike an Canadian in the same situation.

[Valuethinker]

The real bargain of American life is called your Constitution and your Supreme Court-- right of habeas corpus. Miranda rights. Bill of Rights. Etc.

You do lack Her Majesty though.

That's one of the advantages. :lol:

While the US has a different approach to American citizens living abroad than some other countries it cuts both ways. Two examples of where the US approach gives benefits.

• US citizens living abroad can vote in US elections;
• The US negotiates for US persons. A US citizen who worked in the UK and earned the state pension and then returned home gets a COLA, unlike an Canadian in the same situation.

What do you have against the House of Saxe Coborg Gotha? .

I'm not sure on the voting point re other countries.

I'm not sure the emigrant point is a good example of your second point. Britain takes that view with emigre retirees to Canada and Australia. I think this is simply HM Treasury doing its usual sums wrong. The cost of fixing that would be a few hundred million a year (these are the two major places, outside of Europe where Treaty dictates full indexation, where Brits seek to retire if not at home-- usually for family reasons).

By extension the same trap afflicts Canadians who worked in the UK.

However the real cost of retirees is, of course, health care and nursing home care. Getting that off the UK public sector cost base would be a major win-- Brits tend to emigrate to be closer to their children and grandchildren, if they emigrate that late in life (and don't go chasing sun in Spain).

So I think this is the British gov't doing a 'b---s up' as we quaintly say .