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If you add the 75,000 pages in the IRS tax code, plus the Patriot Act, and a few other anti-privacy laws, there is a new built-in disincentive for big money taxpayers in America to stick around and pay the tax toll. Many high rollers in the IRS books have had enough of the IRS and the oppressive America they encounter every day. For them, America has become something from which they want to escape. Many have already escaped and they do not plan to come back… ever.
Personal taxes are paid mostly by the successful. So, because they can, the successful are now snubbing their noses, packing up and getting out of the US. The same phenomenon that has rich Californians leaving that state in droves and heading for Texas is occurring nationally with our best taxpayers offshoring their lives and the lives of their families to foreign countries.
It is not necessarily that things are already that bad right now in the US, as much as what the successful see coming in the future. The government continues to amass greater amounts of power to do just about anything it wants, even if their acts are unconstitutional. So, the rich fear that what may happen is they become big targets of a government gone bad. Their big fear is that government is so powerful that it can stop them from continuing to be successful. With such a government, their risk is that government chooses to confiscate their previous gains simply because it can. With Obama’s class warfare rhetoric, the most successful Americans must fear more for their safety as the President agitates the people to look upon the rich as a big problem. This creates a fearful atmosphere if you have something to protect, even if that something happens to be your life. If you and I were in such circumstances, you too would see the US government as the most dangerous force on earth. It would be time to find a ticket outbound!
Since the IRS first noticed a light trend that showed that the biggest taxpayers were heading out of America in larger numbers to save on taxes; it has tried to make it more difficult. Ironically, making it more difficult for those motivated to leave the country has prompted even more to leave sooner, rather than later when the doors may be completely closed. In other words, there are still major tax liabilities on their American holdings in America, and the IRS is not too kind in these matters. So more and more of these once generous taxpayers, who are sharp as tacks on tax law and enforcement practices, and who have the best educations, and the best advice, are choosing to leave our shores rather than take the abuse. They see it as their best option. This is not good for America, for sure.
Regular Americans like you and I experience the overreach of our government ourselves but we do not have enough assets typically to make a big issue out of it. Our government creates regulations and big problems so much so that those who do not have to put up with their insults and confiscations are beginning to choose to no longer put up with them. Why should they? More importantly, why do US citizens, who elect our leaders, not demand better behavior by government for them and for ourselves?
It is a natural response if you are successful, to not want a police force monitoring your comings and goings, simply because you are successful. Those with means can see that the IRS “police force” would like to take their money for no just cause and put it in the treasury so they can give it to somebody else.
On October 30, 2010 John Gaver, writing for Action America (actionamerica.org) penned a phenomenally insightful article titled: “Tick – Tick – Tick—The Economy Bomb.” This article scared the #$%^&*() out of me as I read it.
Our tax system and our laws, especially the Obama laws are not only chasing corporations overseas, they are chasing our most prolific taxpayers. They can’t take the abuse anymore. The subtitle for his article is: Legislative attacks on America’s most successful, productive and prolific taxpayers represent a ticking time-bomb for our economy. Gaver sees it as a ticking economic time bomb for the rest of us and indeed, for the entire US economy. He writes:
“Many of our most productive citizens have already reached what I call their “government abuse threshold,” and chosen expatriation, as their last remaining legal option for protecting all that they have worked so hard to acquire. We’re talking about ordinary people, who are just trying to protect what they have earned, just like the people leaving California…”
“So what this means, is that [in a short time] without that 1% of the wealthiest Americans, every remaining taxpayer would have to pay almost two-thirds more in taxes, just to equal what was lost. Can you afford a more than 61% tax increase?…”
“In fact, Sir John Templeton, who was born in Tennessee and who still pays a tremendous amount in foreign taxes, is on record, stating that he saved more than $100 million in taxes, in the first year after his expatriation… [when he simply left America] and, that’s just what he ‘saved!’ [Templeton no longer fills out his US tax forms. The IRS does not like that at all. At the time he left,] he was still paying a lot in offshore taxes. So think about the total amount that he would have “paid“ in US taxes, had he stayed.”
“The United States long shared with Libya the infamous distinction of being one of only two countries in the world that claimed the right to tax the income of its citizens regardless of where in the world that income was earned or banked. But, even Libya was not so tyrannical as to claim the right to tax foreigners, who had no connection to the country. In fact, even Gadaffi was smart enough to eventually realize that taxing the foreign income of citizens was causing an unacceptable amount of native capital flight and Libya has now [at that time] dropped its claim to the offshore earnings of its citizens.”
US laws severely punish those who leave for up to ten years after they leave. Cynics call it a “Don’t Come Back Tax.” More and more successful Americans, who can do as they please, go where they please. These expats also write off the US as a venue to visit for fear they may be detained by the IRS. They know that they will never chance facing the ire of US IRS agents on the ten year deal, because they don’t plan to ever return to IRS jurisdiction! It really is America’s loss in many ways, and the losses continue to mount. Tax revenues are down substantially throughout the Obama years. Wouldn’t it be nice to have a few million more huge money taxpayers? Yet, we, as a country, choose not to be nice to the rich. Now, they are choosing not to be nice to us!
Early on, those in the process of becoming expats would keep most of their capital in America and it would still produce jobs and not hurt our country as much. Now, because they fear the government (IRS) will seize their assets to pay the ten year tax, when their investment capital moves offshore, they take everything with them. Consequently, the jobs that the capital would have funded in America move offshore as well.
Obama has promised to further raise taxes on those who already pay most of the taxes. This is not lost on those considering leaving the country. Though they pay more than their fair share, the wealthy in America are denigrated by the President and the press, which make them appear to be unpatriotic, for not giving up all of their wealth for progressive causes.
Those who worked hard all their life and have more options than you and I, are simply sick of all the attention on helping the knife-wielding, personally threatening, deadbeat down the street. Another sting for successful business people is that the government is also directing them how they must run their businesses. Looking for the same freedom and liberty as we all love, more and more people with means, are choosing to jump ship to find peace and solace and the opportunity to keep their hard earned financial rewards in other countries that appreciate them for simply being there and helping out.
Though Doctors are practitioners of the Hippocratic Oath first, and businessmen second, nonetheless, they too must run their practices as businesses in America. As necessary as Doctors are for Americans, government does not make it any easier for them. With Obamacare, Doctors may very well be forced to join the expatriates as they are about to be told how to practice medicine. Most people are unaware that there is a provision in the first stimulus bill—even before Obamacare passed, to stop Doctors from offering premium care to patients. Does this mean they will not be able to accept direct payments from patients or to give free or reduced cost care to patients of their choosing? You tell me! But, if I were a doctor, I surely would be concerned.
The stimulus bill gives the regulation writers an awful lot of flexibility. In other words, Doctors may be forced to accept any insurance plan at all including Obama Insurance—like it or not? Moreover, if the doctors choose to offer anything like a premium care plan that the government has not approved, the rudiments of this law indicate they can be jailed, and lose their practice. This is not a good thing for Doctors; and many plan to pack their bags and retire. Will doctors begin to expatriate as an escape? Is this really America?
Rep. (Dr.) Tom Price of Georgia (to be redundant I must say again he is a doctor—an M.D.) cautioned us all on Feb 13, 2009, saying: “For all its faults, perhaps the most shameful provision in the non-stimulus bill is the creation of a national health care rationing board. Congressional Democrats are using the cover of an economic crisis to advance an agenda that will destroy the doctor-patient relationship and set us on a course for government-administered health care.” Do you trust the Obama regime or your own Doctor about these matters?
I ask this of myself and I ask this again of all of you. Why do we let this man, who threatens a new group of us every day, to continue to be our President? We got rid of most of the dirty 111th House of Representatives in 2010. In recent days we see Obama coming after individuals simply because they upset him. Most of us have heard the story of the 9-year Marine Sergeant who made the mistake of posting a negative Facebook comment about Obama. He will be getting a dishonorable discharge despite Col. Allen West and others speaking on his behalf. Moreover, he will lose military benefits, all because in his words: “I’m having a hard time seeing how 15 words on Facebook could have ruined my nine-year career.” It is no wonder that doctors and business people fear Obama. We all should fear him until we can un-elect him—if we can?
Will we wish that we had spoken up and / or acted and / or voted to stop this travesty sooner? We really do not have much time. Many more successful people with lots to lose, the ones who pay most of our taxes so that we all can live better lives, are wondering when they should leave the US for better, less risky lands. Obama policies are incentives for them to leave sooner, rather than later. Then what?
The IRS and other “wise” agencies have tried to discourage the wealthy from leaving by punishing them with rules such as the 10 year rule nicknamed, “Don’t Come Back Tax!” We could stop this wealth erosion with the right people (conservatives) in charge by eliminating the incentives that are causing our most successful citizens to leave America and expatriate. A thoughtful policy would go a long way toward keeping any more wealthy Americans from leaving. IRS and other government disincentives are becoming bigger and bigger reasons for those who can afford it to simply get out of Dodge as fast as they can. It does not seem like this can be America. We are talking about things that are so anti-freedom and anti-liberty, that it is easy to suggest it just ain’t so! But, it is so! That is why we must change this fast while we still remember how to return America to its former days of fairness and greatness. Would our grandparents be proud of how we have squandered the country they nourished with their hard work?
If we add up the “Don’t Come Back” law, the Bad Guy lists being kept with the names of the successful Americans, and the “Bush Exit Tax,” our most productive citizens sure do have something to fear. In Communist Russia, you may know that the Bolsheviks first convinced the peasants that the rich were evil; then they captured the property of the rich; and then they slaughtered them. Can that happen here? Class warfare can be very dangerous and its results can be very ugly.
Once there were no original rich in Russia, the leaders of the revolution became the rich. Once they were in the big houses, in the power seats, and driving the big cars, they had no problem killing anybody who had a problem with their original progressive thought process. The longer they lived the lifestyle, the less progressive they felt they needed to be. The rich were dead and they were the bosses. They were now the rich. Maybe the well-to-do in America who are leaving in droves know something we don’t? Surely, they have more to fear in a socialist state. What happens when the 46% of non-taxpayers become 52%?
The US anti-leaving laws described above are totalitarian in nature. They are designed to stop the free flow of successful people from our shores, and with a ten year tax penalty, they surely do not invite a return. That is very scary to me. How is that American? None of the disincentives for leaving have worked; and in fact, they have created enough angst that they are now an incentive for America-loving smart people to leave while nobody is looking. Like many government actions, these have made the problem worse.
Just like poor people, the wealthy prefer a fair and just and honest country that permits personal privacy. Our government should be offering incentives to our most successful citizens to stay in America. When you hear Obama speak, you would believe it is a sin to be successful. Our government should also be doing a number of other things to keep us as a great and powerful country. Our only hope is to send the bad guys in Congress home this time again. We cannot afford to let one bad apple back into this lot. And, no matter who runs against this President, I hope you join me in throwing a good vote his way. America must be rescued from this dangerous government.
The IRS is a spooky agency to begin with. It is not just the big arm of the government that enforces tax laws. They strike fear into the hearts of all Americans and this alone is reason enough for them to be eliminated—plain and simple. One of the most important things that we must do to stop native capital flight, is to abolish the IRS
John Gaver’s “Time Bomb” article on saving America by keeping the rich at home is very long, full of facts and it is very thought provoking. While he was wrapping up his article, he wrote in frustration:
“Of the remaining options, taxing the states, instead of individuals, is most in line with the intentions of the Founding Fathers and it would achieve the desired effect of getting the government out of the affairs of individuals. The competition between the states would serve to keep the system efficient. But alas, no such bill has been proposed in Congress and it’s not likely that any such bill will be introduced any time soon.”
Nonetheless, no direct Federal taxes, is an excellent idea. Let the states pay the taxes as required to the Federal Government. This will assure states’ rights and states’ supremacy over the central government and not vice versa. The Federal Government is too big already. If the Federal Government is not managing funds properly, the states in this system can withhold payment instead of vice versa. After we as individuals pay our national share of taxes to our states, and our state writes its check to the Feds, our obligation is then done. If California wants to be different, let them pay for their largesse.
In a system in which there are fifty little countries collecting the tax revenue, the big and bloated Washington bureaucracy would naturally shrink as states found better things to do with the revenue from their people. Moreover, those who would be expatriates in a Central Government System could come back and become exemplary citizens in their state of choosing, in much the same way they may find Costa Rica or the Dominican Republic as a great destination today.
Why are people leaving America? More importantly, and surprisingly, why are they finding the destination countries more attractive? Is this not a disconcerting thought for those of us with patriotism in our minds and our bloodlines? The very fact that those, who choose to be expatriates, use the word escaping to describe their flight from the US already gives away their reason for leaving. They do not want to be trapped anywhere and as the US becomes less free, they do not want to be a victim of staying too long. So, they want to go to places where there is a better quality of life and of course to places where there is significantly less government intervention into their personal lives.
What a negative legacy for America. I am learning every day that America has become intolerable for many people. When 46% of the people pay no taxes, you can imagine how burdensome it is for the 54% who continue to pay big-time, every day. Why should they want to do that anymore? While we look at other countries and think they may be dangerous, let’s look here first and we can find a lot of reasons why people are leaving, and the reasons include more and more danger right here in the states. Crime is rampant, and violence is rife, especially in major cities, but also in small cities in which the well armed thugs from the big cities can have their way any day of the year against ill-equipped police forces. Why should any of us feel safe?
Additionally, the once magnificent ambience of America is now impoverished, and America’s future is bleak. Only those that choose to ignore the International press think otherwise. Many see America as a has-been nation and they find conditions war-like on the streets. Expatriates are leaving for these reasons as well as social unrest, racism, poor moral standards, and a fear of violence against them in particular. Does that sound like the America you know? It does only if you are listening to the rumblings of the times. The closer you live to major cities, the less likely you can miss it. Fear is closer to Americans today than it has been since the founding. Yet, who has emerged as a champion to help the cause? The response to that question is unfortunately empty.
We delude ourselves thinking America is the land of opportunity because our focus has not yet been completely reset. Opportunity for whom, we may ask? Is it for illegal and legal immigrants? American kids cannot get kids jobs until they are in their twenties and so they never learn hard work.
For the first time it seems in American History, as expatriates report, they are proving every day that it is easier to be free to make more money outside of America than it is to make money inside of America. From their eyes, America is no longer the land of opportunity. When expatriates move out, they go to countries with smaller economies that are just beginning to take off. Some suggest that they are going to peaceful, pristine nations where real estate is still a bargain, and life can be enjoyed without fear. Too bad we could not make a nice independent country out of Montana? If I were a Montanan, however, I am not sure that I would want the notoriety.
The tax code can help solve many issues, including those brought up by expatriates, if it were to ever become fair. Rather than simply reducing the rates and being stuck for another 20 years with a 75,000 page fossil that still seeps poison on taxpayers, my own preference continues to be the Fair Tax. The more that I analyze it, the better it looks.
After a cogent set of arguments, John Gaver takes us to the same place. As part of his justification for the Fair Tax, Gaver cites the Cato Institute’s Policy Analysis on “The Economic Impact of Replacing Federal Income Taxes with a Sales Tax.” The Cato analysis predicts that the shift in tax structures of a national sales tax (Fair Tax) v the Personal Income Tax will raise the stock of US capital by at least 29 percent and potentially by as much as 49 percent. Yes, this will help the rich, but it will also help the poor and the middle class as well. It will help all Americans without class distinction.
Former House Ways and Means Committee Chairman, Bill Archer, reported the following about the Fair Tax: “A recent survey was done, in Europe and Japan, of the major corporations and I was astounded at the results. They were asked, ‘If the US abolished its income tax and went to a sales tax, would that have any impact on your decisions?’ Eighty percent of the corporations said they would build their factories in the United States of America. Twenty percent said they would move their international headquarters to the United States of America!”
Back in 1776, we had the smartest people in the world setting up our country so that in the future we could not ruin it. The Founders did not know us but they feared us. Because of our great start, and the rules of life given to us in the Constitution, America soon became the go-to place for trade. The US adopted Mercantilism as England had and our nation became the strongest in the world while individual freedom and liberty prevailed.
We have gone far astray from the Founders’ vision for sure when more and more of our highest tax paying Americans are asking if the US government is going to shut the doors locking Americans in? Will Congress write legislation that could prevent Americans from leaving our country, thus making America a prison? What would Ben Franklin say about that?
Intrinsically we know it would be a very bad policy to lock Americans in. Just that we are talking about it as a possibility gives me great pause. It would create a panic that could inspire a stampede to airports and docks for all people, not just the rich, to escape. Those who understand the risks of staying in America in today’s circumstances advise expatriates and those considering becoming expatriates not to delay in taking the precaution of getting a second passport. They fear a last minute rush when the bad regulations come, and they fear things can turn bad overnight. Many of us think the US is not yet prepared to go as far as preventing Americans from leaving but there is little doubt that the IRS wants to confiscate your money, even your soda bottles that have deposits due, before you can manage to flee.
John Gaver’s summary of the Fair Tax is very compelling: “A National Retail Sales Tax would not only create the incentive for wealthy Americans to keep their assets right here at home, but it would actually have the effect of reversing native capital flight and bring a lot of expatriated capital back into the United States. But, for that to happen, the ‘Don’t Come Back Law’ and the ‘Bush Exit Tax,’ would have to be repealed, as well.” Furthermore, those Americans that left between 1996 and 2008, without paying the 10-year expatriation tax, would still be liable for such payments should they return. So, a law would have to be passed, to actually roll back the 10-year expatriation tax, so those expats could return without undue cost.”
This should be a no-brainer for a Congress that might even be inclined to pass the RRR America Success program in its entirety. I urge all readers to contact your Congressman today and tell him / her that you want him / her to support the RRR program and the Fair Tax Act of 2009 (HR25) as it needs to be re-introduced in the current Congress. While you are at it, ask them to make sure we adopt policies that make the world’s most successful people want to live in America. We will all gain from that. More than anything, we must get rid of the Gestapo in the US. It is high time to disband the IRS as part of the Fair Tax. Knowing Obama just added 16,000 new IRS agents for Obamcare, gives me a really uneasy feeling. How about you? If you were an expatriate, what would make you want to come home? Perhaps we should just do it!
Brian Kelly is a business owner and former assistant professor at Marywood University; he and his wife live in Northeastern Pennsylvania. Kelly is running for Senate in his state and believes limited government brings liberty and freedom.