Where is Everyone Going?
 
By:
?
Date:
05/16/2000


What is an Expatriate ?

Why Do People Expatriate?

What are the Benefits?

Is it Illegal?

What Does it Mean to Become an Expatriate?


When most people think about the term "immigrant", the thought of someone
leaving their home country because of poverty or
limited work opportunities, government persecution, and the general desire to live a
better life all comes to mind. While this
image certainly applies to a number of people seeking something better by
immigrating to Europe or the United States, the
same can be said for the large number of middle-class citizens leaving those very
same high-tax countries that the world's
poor are trying to get into. The only difference is, many of these modern day
immigrants are called "expatriates", and are
leaving to save themselves from becoming poorer. What exactly is this new trend
and why is it happening?

For Americans especially, unless you are a native Indian, your ancestral roots can be
traced someplace else. That is to say,
someone in your family tree left their home country to seek a better life or
opportunity in the United States. They could have left
for a variety of reasons. Perhaps it was the great potato famine in Ireland. Perhaps
it was war in Europe or elsewhere.
Perhaps it was to live in a country where you did not need permission from the
government to change apartments, travel or go
where you please. What ever the reason, someone in your family left their home
country to live "Free", or live better
economically speaking. Believe it or not, Americans, Australians, Canadians and
Europeans are becoming "Expatriates" for
the same basic reason.

The literal definition of the term "expatriate" or "expat", could mean someone that is
giving up their residence or citizenship.
Often, because people are doing so for tax benefits, the term "tax exile" is used in
conjunction with this terminology. In truth, we
can really say that the term "expatriate" is synonymous with "immigrant", although
we are talking about a new form of
immigration. Some people will say that leaving one's country is unpatriotic. In
reality, it is no less so than what your
grand-parents or great grand-parents had done before you. They moved on to
someplace that made sense. Someplace with
less government interference, someplace where they could find better financial or
economic opportunities.

Why Do People Become "Expatriates" ?

There are many reasons, but the majority center around taxes and displeasure with
government policies or mismanagement.
A large number of people, not just the wealthy - but what can be called the average
middle-class, are disenchanted with high
income taxes, property taxes, estate taxes, increased government interefence and
"monitoring" of their lives, ineffective
government and legal systems, and a host of other issues.

Many people feel that they are working harder than ever, and paying more taxes than
ever, with no real benefit in return. In
addition, increased government regulations and supervision of one's personal affairs,
has left many people with the feeling
that the "land of opportunity" has become the land of excessive taxes and ineffective
beauracrats. Perhaps you disagree. Or
perhaps you feel just this way, but think you are alone. You are not. The number of
people leaving is stagering - and the
government has taken notice.

So much so, that new legislation has been enacted. and new tax regulations also, to
make it difficult to formally declare your
"independence". For US citizens, the Internal Tax Revenue Service claims they have
the right to tax you for up to ten years after
you expatriate, if they think you are leaving for tax reasons. They never say you
cannot leave, but they would welcome the
opportunity to hold your money "hostage". Ironically, the US has always been
associated with "freedom" from tyrany, respect
for the rights of the individual, privacy of the individual, and a fair system of
government that treats all citizens equally. How
things have certainly changed.

In truth, this disenchantment is not just an "American phenomenon". With income
tax rates reaching up to the 50% category in
places like Australia and Canada, many people are starting to wonder if it is worth
it. The truth of the matter is, the majority of
taxpayers contributing the bulk of tax revenue to support many programs, are
themselves ineligible to reap the benefits. Many
governments say that they "earn too much". Since many people cannot "opt out" of
making tax payments into government run
welfare or pension systems that appear to be heading towards bankruptcy, they are
instead physically leaving. It is safe to say,
that most people would indeed prefer to stay, "check out" of the ineffective welfare
state system (with the understanding that
they cannot draw benefits), and continue to live their lives. The problem is that many
of these same governments do not permit
them to do so. At the same time, politicians have done very little to lower the tax
burden or better manage much of government
spending. The option is to expatriate or physically "check out" altogether.

If you think about it, this line of thinking is very understandable. Most people are
suspicious of any assurances that social
security or other government run pension programs are financially sound. In the
least, most people are doubtful that they will
recoup all of the money they have "paid into the system" when it is time for them to
retire. For this reason, the growth of private
pension plans, private annuity plans and other self funded retirement accounts has
grown by leaps and bounds. To take this
one step further, if you are going to be responsible for taking care of yourself
without assistance from the government - you
might as well do so (or go somewhere) where you can get the best "return on your
money". Often enough, this means going
someplace offering much lower or even zero income taxes, and a higher standard of
living for less.

Taxes are one part of this equation, but the truth is, not the only part. Americans
especially feel that the legal system no longer
works, and that government has gone just a little too far with certain policies. In the
US, for example, many government
agencies have stated that individual property does not have the same rights as
individuals. As a result, they claim the right to
seize property in the name of the "war on drugs" or the "war on crime". The claim
is that the US constitution only gurantees the
rights of the individual, not of property. Perhaps the goal in a noble one, but when
any government starts to take away rights or
protection previously enjoyed under the law, it sets a precedent for the reduction of
other liberties as well. Anytime a
government takes away your freedom or rights, in the name of protecting you for
your own good, history proves this is a very
ominous sign. This "writing on the wall", and the fact that most people are
indifferent about it, have caused the group known as
"expatriates" to take flight.

In summary, most people that consider expatriating, feel that their government has
left them (not that they are leaving their
country or government). For all practical purposes, this is the same sentiment felt
by earlier immigrants, who decided to leave
their home country because the government or the economy changed, for the worse.

Technology makes it Possible


The truth is, that modern technology offers the freedom to live where you want.
That same technology means that world
communication is readily available, and possible, from just about every corner of the
globe. Satellites bring television
programs, in your native language, to your home regardless where you live.
Business can be conducted from anywhere, and
at anytime. Electronic banking means that your money can be in Switzerland, for
example, while you live in Brazil. Similarly,
you can move your money anywhere you desire, to gain the best interest or returns.
In many cases, completely tax free, and
free from government scrutiny.

Partly because of this, today's modern immigrant or "expatriate" can shop for a
country, the way some people shop for clothing.
Perhaps this is what annoys some high tax countries the most. What was to their
benefit in the past ( immigrants bringing
work skills, money and business skills), is now the benefit of other countries
offering a more attractive place to live, invest or
work. It is a natural progression and all part of the "free market" global economy.
One cannot say they love freedom, and free
markets, while only embracing certain benefits. It is a two-way street.

Where is everyone going?

They are going to countries where they can live better on less, and where the law or
the rights of the individual still mean
something. They are going where there are low, or in some cases, zero income or
other types of taxes. Places that do not
have inheritance taxes, high property taxes, or bloated government welfare systems
that drain every tax-payers monthly pay
check. Countries that have modern supermarkets, cable television (even HBO),
cellular phones, high speed internet access,
duty free shopping, and a host of other "conveniences". They are going to places
like Costa Rica, Dominican Republic,
Ecuador, Thailand, Panama, and a number of other "free" countries.

"Changing Places"


In Roger Gallo's best selling book "Escape from America", Roger states that
"America's best and brightest are leaving". You
had better believe they are, and they are taking their money with them. Who is
replacing them? The world's poor, uneducated or
disenchanted. There is nothing wrong with that, and this has been a part of
American history since the beginning. You cannot
blame someone from leaving their home country to seek better financial or other
opportunities someplace else. On the same
token, no one can blame you for seeking out someplace or something better (this
what I mean by a two-way street). The
problem is, many governments are afraid that money is leaving faster than it can
come in. Taking the US as an example, many
newly arrived immigrants bring no money, little or no English language skills, and
generally find it difficult to get themselves "up
and running". This has been the case for years, and it is nothing new. If we look at
the economic side of it, chances are, the
newly arrived immigrant is going to need some time before his income or salary
replaces the tax revenue lost by the
"expatriate". The fact of the matter is, the person earning minimum wages pays less
tax into the system, than the person
earning US $ 75,000 per year.

The government response to all this has been new tax regulations and increased
scrutiny. Instead of giving citizens a reason
to stay, they are just motivating them even further to "make tracks". In the most
literal sense, many middle-class Americans,
Australians, Canadians and Europeans, are "changing places" with so-called third
world citizens. The ironic thing is, the newly
arrived expatriates can live far better, with less money, in their new home. They
bring with them job skills, money and business
experience. They are changing places with citizens that do not usually offer the
same. For this reason, many countries gladly
welcome the self-sufficient and productive expatriate. The new home does not tax
them to death, nor burdens them with
endless regulations. By the way, many of these places have never seen a snowflake.


Source:
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URL:
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Reports:
Pirates of the Caribbean: Offshore Traps
Global Village Idiot's Guide


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