One time when I was in Burma (now Myanmar), I spent a couple of days riding around the forest by elephant back. Elephants are a fine thing to have in the forest but, believe it or not, you have one living in your house with you. And you should do something about it now, before your house is wrecked and you and your family get stomped in the process.
Any amount of financial success won’t mean much if you get stepped on by the elephant in the room. The damage you routinely suffer from the elephant—not to mention the lingering threat that he’ll go completely berserk someday—dwarfs the importance of the best investment decision you’ll ever make. So, I’m going to invite your attention to a problem of overriding importance: How can you protect yourself and your wealth from the elephant?
The elephant in the room is, of course, the government.
The elephant is your permanent roommate, and it has a permanently big appetite. In the name of “income tax,” it regularly eats 40% or so of everything you earn. You may not like it, but by now you’ve probably learned to live with it.
After you’ve lived out your income-tax paying years, the elephant will attend your funeral—not to console the mourners or to recount your good deeds, but to collect estate tax. In the name of the “estate tax,” the government will take up to 40% of what you leave for the next generation and perhaps more of what you leave for your grandchildren. Continue reading "Doug Casey: "There Is a Rogue Elephant in Your House""→
"In this world nothing can be said to be certain, except death and taxes.”
– Benjamin Franklin
In most cases, Mr. Franklin's statement would be correct. However, as you will see below, there are some countries in the world where you can be certain you won't pay taxes.
With the year 2013 marking the 100th anniversary of the income tax and the Federal Reserve in the US (two of the most powerful tools the government uses to extract wealth), I thought it would be useful to look at when Tax Freedom Day occurs across the world to gain some perspective.
Tax Freedom Day (TFD) is the day of the year that the average person has in theory earned enough money to pay his or her annual tax bill.
If TFD falls on January 1, that means you are a milk cow for ZERO days out of the year for the government. If it falls on June 30, it means you are working 181 days each year to pay off your taxes.
Unfortunately, most of us will spend some time during the year acting as a milk cow in some fashion for a government.
Below is a table showing when TFD hits in the countries within the EU.
The government of Hungary, Belgium, and France are the worst offenders in the EU, keeping their citizens in tax servitude astoundingly until around August each year.
If you are unlucky enough to be in the suffocating grasp of a high-tax jurisdiction, you will likely have only a couple of months of salary (if even that) out of the year that can be potentially utilized as savings after essential living expenses are met.
In the US, TFD comes around April 17. Of course, individual circumstances will vary, and TFD in the US can come a lot later than April 17 for many Americans.
Whether you are American, European, or any other nationality, it doesn't have to be this way. You do not need to be working for the government for a good portion of the year.
It is possible to take steps to internationalize and legally reduce the number of days the government milks you of the fruits of your labor.
Some countries do not have an income tax or essentially any other type of tax that could hit the average individual.
TFD could come on January 1 for you if you have no external obligations and fall under the jurisdiction in any of the countries in the table below.
Countries With No Personal Income Tax
British Virgin Islands
St. Kitts & Nevis
Turks and Caicos
United Arab Emirates
There are many ways to internationalize and legally structure yourself and your business around these and other low-tax countries.
One possibility could involve an American citizen obtaining a second citizenship, then becoming a resident of one of the countries above, and finally renouncing US citizenship in order to obtain a tax-free existence. Of course, this is but one possibility. There are many options with varying degrees of protection.
You could prove Benjamin Franklin wrong – taxes are not necessarily a certainty.
It is still legal and practical to take steps to internationalize, but if history is any guide, it won't be so forever... especially as governments (particularly in the West) become more desperate.
Moving your assets abroad is the most effective way to protect what's rightfully yours from your home government… but most people have no idea where to begin. That's why Casey Research has put together a special web event, Internationalizing Your Assets. Featuring New York Times best-selling author Doug Casey and other experts on international diversification, it premiers April 30 at 2 p.m. EDT and is must-viewing for anyone looking for ways to legally shield wealth from greedy politicians. Get more information and register today.