The American Dream, Re-revisited
I have been reading your publication for a while now and generally agree with your conclusions about the financial condition of our country. This is my home. It is where my job, family, and friends are here to support me. Someday I will have grandchildren. I don’t want to give up on, or leave our country. After the health care bill passed I decided to see what I could do to help get us back to freedom and fiscal responsibility. I have always been a libertarian at heart, but not politically active. I have no interest in telling anyone what to do. I live my quiet life until government gets too involved in mine. I don’t have any horror stories, but I see a storm on the horizon for everyone.
I started by joining the Libertarian Party online, contributing ten dollars per month. I then attended the state convention in Ohio, and also the national convention in St. Louis. It was not at all what I expected. I expected to meet successful, intelligent, libertarian minded men and women, similar to the ones that write for your publication and others that I read on a regular basis. The party is small, consisting of mostly men with degrees in computer science and a few hippies left over from the sixties. They spent too much time debating between themselves about wording in the Party Platform. They are fiscally responsible, with little funding. The whole experience left me sad, frustrated and not knowing what to do next.
Where are YOU? Why do you encourage the rich to leave instead of fighting for our freedom? How can you give up on the greatest political experiment in the history of the world? How can you let corrupt politicians get away with robbing what belongs to our children? Why not encourage small businesses across this country to unite and stop withholding taxes from the paychecks of our workers? Don’t you realize that before you know it there will be nowhere on earth left to go where you can escape the clutches of government? I say we need to fight, not flee, before it is too late.
I graduated college in December, 1995 with a Bachelor’s Degree in Construction Management. I have been gainfully employed since that time. I have switched companies two times since college, and have found both jobs within just a few days of starting to look. I have been with the current company I’m with for the last 8 years. I am currently looking for a new company to work with, as I desire to relocate due to my family’s needs. I have been on two interviews in the last two months, all the while, being currently employed. In other words, I can afford to be choosy about which job I accept. I make average to slightly above average income. I’m not sure what the average income in America is, but we are fortunate that my wife can stay home with three young kids, while I earn income. We live within our means, and don’t shop on credit.
So, for me and my family, things are pretty good. I feel secure about my future. Now, here’s the catch: I work for contractors who provide construction for the Federal Government. The very projects that end up on spending watchdog and pork-barrel tracking websites are the very same projects that keep food on my family’s table. If I leave my current location (construction at a military base) I’ll just end up in a similar location (construction at another military base).
So, on the one hand, I’m extremely grateful that I’m gainfully employed, and continue to bring home the bacon for my family. It’s fair to say that we’ve been untouched by the economic malaise of the country. Yet, I’m always on the lookout. What happens when the Government acknowledges they’re out of money? What happens if they decide to quit waging expansionist war policies across the globe? What happens if the Government coffers to the war/spending machine close, for whatever reason?
Well, I consider myself safe, for now.
I’m probably one of your very few subscribers who are actually going through this process. Let me tell you first how much of a relief and pleasure it is to read analyses from such a reasonable, level-headed group as the Agora team, and especially to read such an emotion-free article about expatriation. I love your point of view (maybe because it matches my own).
Initially I wasn’t going to respond to your survey. But this time I thought my experience may be helpful in some way to others. Too, the benefit of complete anonymity is also helpful. I am due to expatriate in a few months (the waiting list at the US embassy in Switzerland is incredibly long and one needs to wait nearly a year!)
Let me just say that one of my parents is European and although I was born and grew up in the US, I always simply had an affinity for Europe and came here to live and work right after finishing my studies. Let me also say that I never imagined I would take the steps of giving up my US nationality, until recently (at least I never seriously considered it). I grew up in a gung ho household in the US and still feel patriotic. I even still support the US military engagements abroad, despite their expense, because the US is simply the center of the international system and were it to disappear, something worse might take its place. So to sum up, I sometimes can’t believe what I’m about to do.
But do it I must, for I would be a fool not to. I have lived in Europe since my early 20s and have always had to pay my US taxes, both on my wealth in the US and on earnings abroad, when these surpassed the foreign earned income exemption. I inherited money in the US, so this has put me in a quite different category from my US colleagues here in Europe who say they don’t bother filing their tax returns. I am a bigger fish and would get into significantly more trouble. Having said that, I have always filed and paid my US taxes – in fact, I don’t have anything against paying taxes in principle.
On average, I have to cough up around $4,000-$5,000/yr just for a CPA to file my tax return, consisting of pages and pages of AMT calculations designed to net the US government some money despite all my exemptions, such as the fact that I live in a higher tax jurisdiction than the US (yes, my taxes here are several times higher than what I would pay in US Federal taxes, yet the Treasury still wants its pound of flesh no matter what). And this amount doesn’t even include what I actually have to pay to the IRS (which is a factor of several times more). On top of that, I have observed that over the years, my US taxes have steadily increased at similar income levels.
What I observe in the tax trend is this: taxes and reporting requirements have increased over the last decade despite who occupies the Oval Office. It has been largely a non-partisan strategy to simultaneously lower taxes for US residents, while simultaneously raising expats’.
And I’m throwing it in too. I’m not sticking around to see what happens, or what would happen to me as a designated “US person” here. For over a decade, I had a simple salary account at UBS. I was always a good customer and they even assigned a personal representative to me, to pester me into investing with them. After I moved back to the US briefly last year, they closed my account in the most inconsiderate way, only because I am a US person. I was fully compliant with the IRS as to my overseas accounts (not offshore, since I live and work in the country where I have the accounts). Afterwards, I was scrambling to find another bank. Two turned me down for the same reasons. Can you believe that? Finally, I got into another bank through personal connections.
I have opened a business here and cannot handle the instability that my expensive, blue passport costs me. At any moment I could be thrown out of my account because of some political disruption, big or small. After I legally established my company and dutifully filed the paperwork with my CPA here, the first letter my company received was a letter from the IRS, stating that if I want, I can make electronic bank payments to them. What? It was a start-up company with no revenues yet (and not even a company tax return). My Swiss colleague, who gave me the letter, was also somewhat angry and made a comment about the tentacles of the US treasury trying to reach into every nook and cranny abroad.
This octopus metaphor is really the whole point. Here in the Swiss media there are increasing reports about “US persons” (as one is referred to here, when one has some connection to the US but not even US citizenship) getting screwed in one way or another, because of the ravenous IRS. One Swiss lady even has an international arrest warrant on her and cannot leave Switzerland before her case is cleared, because she failed to report to the IRS an inheritance she received, while living in Switzerland.
So, I hope this letter sheds some light on my personal motivations for giving up my passport. The way I see it, I should only pay taxes in the country in which I live and work. Having to pay taxes to some other country, for which I get no benefit (gee, how about a blue passport?), is theft, pure and simple. I love where I live and wouldn’t trade it for the world. But, having said all that, it has not been an easy decision for me. Although common sense dictates the right thing to do in my case, it is only with a heavy heart that I will go to the Embassy and list the reasons before a consular officer, as to why I don’t want to be a US citizen anymore. I really don’t want to do this, but am being forced to, for the sake of my future and the future of my family.
In my view, the US was and is a great country, but the goose that laid the golden egg is being slowly choked by a bureaucrat who seeks to piggyback the goose’s success to expand his or her own.
As an expat I can personally attest to the benefits of expatriation being very real and hugely rewarding. Since The Daily Reckoning is primarily about investing and attaining financial freedom, I’ll focus on that aspect.
I obtained what is called economic citizenship from St. Kitts & Nevis, and then dropped my US citizenship. St. Kitts & Nevis is a British commonwealth in the Caribbean, and a tropical paradise tax haven. If you visit and can swing the tab, stay at the Four Seasons – it’s very nice. Anyway, to cut to the chase, the annual amount I save by no longer paying the raft of US taxes covers ALL my living expenses in my new home. It also quickly paid the cost of getting my new passport.
Being able to buy and sell stocks, gold, silver, oil, currencies, options, bonds – you name it – while paying ZERO taxes is such a boon it’s hard to overstate. It’s a total game changer to be able to invest freely and not even think about taxes. The process of investing becomes so much clearer that until you’re there, I don’t think it’s possible to fully “get it.” I certainly didn’t, and I can’t believe the mental haze I lived in for so long when it came to investing.
The other benefits you mention on your list have been true for me as well. Not filing tax returns anymore and flushing money on accountants year after year is something I give thanks for every April. It’s like a second Thanksgiving! I express my thanks by giving more money to charitable causes than I could afford to when I was property of Washington DC.
I also can vouch for the point about sleeping better knowing your money is no longer funding corporate bailouts, military invasions, political boondoggles, and all the other rip-offs that The Daily Reckoning covers on an ongoing basis. I still travel to America occasionally (I got a visa after I became an expat), and it’s sad to see how many regular people are suffering. Unfortunately that suffering will continue and only get worse as the avalanche of debt and unfunded liabilities that Agora has warned about buries them in the coming years. Whether it’s mass deflation, hyperinflation, stagflation, or some other unforeseen blowup, the middle class will be largely wiped out. People already know they’ve been ripped off, even if most don’t understand the mechanics of how it happened and continues to happen. Going forward I think you’ll see scapegoating, civil unrest, even widespread violence. I’m glad I won’t be anywhere nearby if and when it happens.
To wrap up, I’m one of the increasing numbers of people who has “gotten out of Dodge,” and I’m truly glad I did. I recommend it for anybody who considers personal freedom and financial freedom to be more than just feel-good slogans. I didn’t abandon the ideals of America. I decided to pursue those ideals on my own terms rather than paying politicians to work me over while telling me I’m free. Everybody has their own line in the sand. They crossed mine.
If some day America is no longer under the control of corrupt thieves, then I’ll be first in line to return. Until then, I wish those who decide to stay the best of luck.
It’s true I am a Canadian but please don’t discount my insight. I’ve been hanging around the US for about five years total. I like the place.
Americans like Canadians and actually often listen to us… Americans are smart, aggressive, inventive and, once you have their attention, focused problem-solvers.
Here’s my take: all the lousy, low-paying repetitive jobs are now offshore leaving the land of the somewhat free, free to innovate and rebuild their manufacturing base.
I’d start with extremely complex, high precision products that others make a botch of.
Its true the Indians, Chinese, Germans, Japanese and even the Brits are inventive fellows. They come up with clever ideas. So I’d scour the world for their most complex, technically challenging, currently low-yielding, high-valued products and build them here and grow the manufacturing base back on excellence.
I graduated from the University of Arizona in 2007 with a degree in Political Science. After graduation I applied at a number of large companies (Microsoft, Cisco, etc.) but did not get hired. I actually ended up getting an internship for the great Libertarian talk show host Charles Goyette…
After the internship I still couldn’t find anything and worked for my dad part time (small consulting business). I eventually found a sales job in Seattle (friend of my dad’s) that is a $26,000 base. I am still working at the same sales job a year later, but I am not making enough to live on, so I had to get a second job at Macy’s that pays $9.00 an hour. So I have to work 7 days a week, and have basically determined that my college degree is worthless. Prior to taking the job, I knew nothing about the industry I am in (gateway software/payment processing).
So basically to sum my situation up, college was a complete waste of time. I think if people desire to be doctors or engineers it is necessary, but for the social sciences I really have my doubts. That is not to say the social sciences are useless, they are extremely important. I just don’t think people need to waste five years of their life getting a degree in political science or sociology, etc.
I am a 45-year old male, born in the USA of immigrant parents. I am college educated and an entrepreneur. Since my 18th birthday, I have never had a full-time paying job and have always run my own businesses. I have been married 13 years this week and have one daughter. Thanks to the United States, I feel I have lived a blessed life.
However, I have never been more frightened than now of my family’s future prospects in this country. The bottom line is that a superior education and a high paying job are quickly becoming things of the past. For the first time ever, my own father has told me he felt sorry for this country. Please, do not take this as America-bashing. This is an emotional subject for me. I find incredible the thought that my parents have the slightest feeling that maybe they did the wrong thing leaving their home countries.
Unless the United States offers opportunity in greater and greater quantity, I fear the future here. I see this fear every day. My business is about the entrepreneur. With almost 1 million square feet of retail property in our control we see daily the struggles of small business owners and the effects of government policy on their businesses [notwithstanding the recession]. Most of our tenants have ethnic backgrounds and are proud of their success here. But I am seeing more and more not just quit, but leave the country. This is not good.
I can only pray that by understanding the history of the United States, its leaders can keep her a frontrunner of opportunity and success.
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