Thursday, May 31, 2012

Ayn Rand and Identifying as American

   Jacob has been reading “Atlas Shrugged.” By reading, I mean listening to on Audible. Because I’m cheap, I’ve started listening to books on Audible too, even though I prefer to read them, so we don’t purchase two copies of the same book. I read “The Fountainhead” and “Anthem” back in high school, and I remember getting a little infuriated with Ayn Rand at the time. I thought she sounded so vain and selfish. I want to read them again to see how my perspective has changed. Jacob’s liking Ayn Rand, although he says she’s full of only half truths.

As expats, we no longer identify ourselves as “American.” More and more, wealthy Americans are choosing to discard their citizenship. One of the founders of Facebook just did this. People (read: government officials who want your money) acted like this was a scandalous and selfish decision to make. In fact, they are looking at passing laws making you have to pay taxes for 10 years retrospectively if you’ve already given up your citizenship, along with fines and fees out the wazoo if you decide to permanently emigrate. We’ve been told, ourselves, that we should be “proud” to pay taxes in the US even if we don’t live there, because many of our customers live in the US so we should pay our fair share. I find that argument ludicrous. No matter where our business is based or what nationality we were, we would have customers all over the world. We have Australian customers; we don’t pay Australian taxes. It reminds of this question I got in my newsletter from Lief Simon, an international real estate investor whose emails I receive:

QUESTION: “In my opinion, paying taxes is the price we pay for living in a free society. Who do you think should pay for bridges, highways, firefighters, police, schools, postal service, etc.? Somebody other than yourself, right? Those who benefit greatly from our way of life should certainly be paying their fair share, tax-wise. I do not agree with your philosophy of moving assets offshore to avoid taxes."


ANSWER: I think you're missing the point. The United States is the only developed country in the world that taxes its citizens (and permanent residents...Green Card-holders) on their worldwide income even if they live outside the country. The point is that, as you suggest, those using services should be the ones paying for those services. U.S. citizens living overseas aren't using U.S. services (except maybe now and then as tourists when they come and go). Why should they pay for them?

Another clarification is called for. Moving assets offshore has nothing to do with avoiding taxes. Again, the United States taxes Americans on worldwide income no matter where we live, so putting assets into another jurisdiction has nothing to do with our related U.S. tax obligation. It has to do with protecting those assets, from a frivolous law suit, for example.

Note also that schools are usually paid for by property or other local taxes. The postal service is a semi-autonomous entity that is going bankrupt and that should be allowed to do so. Highways and bridges could be paid for by those who use them directly, through tolls. And if the United States would stop wasting the lion's share of its resources policing the world and "fighting a war on drugs," then they could afford to continue to pay out "entitlements" to non-productive members of society without having to tax the productive ones out of existence.


Click here if you want to subscribe to the Offshore Living Newsletter:


Although Ayn Rand called libertarianism too close to anarchy for her to support, she has nevertheless become a representative of the movement. Most permanent travelers that I’m aware of are libertarian. The way I think of libertarian is this: A Republican wants the government to stay out of economics but legislate moral matters. A Democrat wants the government to step in economically but stay out of people’s moral choices. A libertarian wants the government to mind its own business in economics and social/moral matters, that individuals and freedom trump government. I consider myself to be libertarian.

No comments:

Powered by Blogger