In spite of the many disturbing trends in the United States about which I comment, I still have faith and hope that America will endure and prosper. But that won't happen without a clear recognition of our problems and a determined effort to address them by making the needed changes.
This election year, as others have recently, certainly discourages much hope for real solutions and true renewal -- in spite of the use of an amorphous "hope" as a slogan to cover plans for more Big Brother and more big government.
But despite my faith in our country, some Americans have had enough.
In his recent book, Bad Money, Reckless Finance, Failed Politics and the Global Crisis of American Capitalism (Viking Press 2008), political commentator Kevin Phillips warns that an unprecedented number of citizens, fed up with failed politics and a shaky economy, have already departed for other countries, with even larger numbers planning to do so. I commented on his book a few months ago.
Told You So
That Americans are fleeing is hardly news to Sovereign Society members and our readers.
For the decade since our founding, we at the Sovereign Society have noted sadly that each year hundreds of thousands of U.S. citizens and resident aliens have been leaving America to make a new home in other nations. Admittedly, that number pales against the millions clamoring to get into the U.S., legally and otherwise.
But there's a huge difference in the economic status of these two fluid groups.
Those seeking admission (or just illegally crossing our borders) are, by and large, poverty stricken persons desperately trying to better their lot with a new life in the promised land. They'll settle for low paying jobs, welfare, free education for their kids, and U.S. taxpayer subsidized housing and health care.
Those leaving are the wealthy and the talented -- who have had enough, thank you.
Fresh Evidence
In the August 5th issue of U.S. News and World Report an extensive article notes that many younger people are leaving the United States with young families to seek their fortune or just seek an easier life in foreign lands.
If the data collected in polls conducted between 2005 and 2007 are accurate, perhaps 3 million U.S. citizens a year are going abroad to live. That number, if true, is a big increase over recent years. Of special interest, the largest number of relocating households is not those with people approaching retirement, but rather those with young adults ranging from 25 to 34 years old.
John Wennersten, author of Leaving America: The New Expatriate Generation (Praeger Pub. 2008), and a retired historian who has taught abroad for many years, sees this exodus of Americans as "a long-term trend."
While Americans who go abroad are in some ways typical pioneers looking for a new "Go West," they also are part of a larger development, "a global economic shift," Wennersten writes, "that is fostering real economic growth in neglected areas of the world, like Latin America, Eastern Europe, and Southeast Asia." U.S. citizens are certainly not the sole beneficiaries of this shift, but they are active players in foreign countries where privatizing of former state-run industries and the opening of new capital and trade markets are creating opportunities.
Who's Who?
A major question is whether America is ultimately gaining or losing from this movement of talented Americans to other countries
The answer is not simple. Wennersten cites what he estimates is a loss of about $30 billion in payroll, but he considers the outflow of expertise an even bigger potential drain. "It's not the average guys who are going," he says. "It's these 'creatives' who will be establishing the paradigm of the future."
Two years ago we assisted the editors of WORTH magazine in a series of articles on why Americans were moving their assets and their lives offshore. So the trend is not all that new, and began over a decade ago. Many of these self-exiles are wealthy people seeking to escape what they see as the tyranny of the United States government.
John Gaver of Action America has written: "The problem is that increasingly, the wealthy perceive, whether correctly or incorrectly, that they are under attack by their own government and they are taking the only rational option left open to them. They're taking their wealth and leaving."
Politicians React
A 1994 Forbes magazine article described how some wealthy Americans had acquired a second nationality, surrendered their U.S. citizenship, and thus avoided millions in U.S. income and estate taxes. (The U.S. Supreme Court has ruled that renunciation is a constitutional right and U.S. law contains a procedure to accomplish this).
The Forbes revelations create a continuing obsession in the U.S. Congress about this supposedly terrible tax exodus and how to punish such allegedly unpatriotic tax exiles. This anti-expat obsession manifested itself in its most virulent form last month in a new, tough expatriate exit tax law. http://nestmannblog.sovereignsociety.com/2008/06/exit-tax-become.html
We Can Help
The Sovereign Society exists to give advice and direction for those interested in "going offshore" in many different ways. We can offer you a road map to offshore freedom, including legal ways to protect your assets, lower your taxes, expand profitable investments and how (and where) to move your residence and/or citizenship offshore.
If offshore interests you, we can help you.
Frankly, I pay my taxes and have no intention of expatriating, but then I'm not a millionaire. (I wish). But for those contemplating such a global course, young and old, two of my books, one about second passports, the other on offshore planning, explain in detail how to live well offshore under what we call "the ultimate estate plan" -- expatriation. And it's all legal.
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