Around the world, rich people often do relocate personally for tax purposes. One of the reasons we don’t often see rich people in the United States do this is that we have incredibly low taxes compared to the rest of the world. And that’s just nominal tax rates; in practice the super-rich pay almost nothing, which makes it even weirder how rabidly anti-tax they are.
There is quite a bit of business relocation that happens because companies are lured to different locales through tax abatements.
One of the reasons we don’t often see rich people in the United States do this is that we have incredibly low taxes compared to the rest of the world
The much, much bigger reason we don’t see that in the US is that the US is the only country in the world that can, and does, tax citizens living abroad. Anyone trying to avoid US taxes would have to renounce US citizenship
The US only taxes the difference between the country’s tax amount and the US tax amount, at least. Someone living in Sweden may not have to pay anything while someone in Thailand may owe most of their taxes to the US. It still is wild that they demand tax money from citizens all over the world though.
Huh, TIL. Didn’t realize the US had an exit tax. Sounds like it forces a sale of US based assets when you renounce citizenship, then you have to pay taxes on that
On the people side, the ones who would do it are already doing it: for example rich people who go live in Monaco 6 months a year to have residence there. The one’s who aren’t doing it and simply bitch and moan about it seldom tend to start doing it because they prefer the lifestyle of being were they are rather than the “live in your yacht of the coast of Monaco”.
As for businesses, they only ever do it when they can still keep operating with the same advantages in their original markets whilst paying all taxes elsewhere that is cheaper. In regimes were taxation isn’t actually based on “place of sale” but instead on HQ location, the move their HQs to reduce the tax they pay but they don’t actually move their businesses. Such moves indicate that tax legislation is actually not taxing the doing business (i.e. their actual selling) but something else and thus need fixing.
It’s incredibly rare for a business to actually stop selling altogether in a country merely for tax reasons - instead what you see is them trying to use accounting loopholes to move their tax residence elsewhere.
500 sqft condos in Monaco sell for $4-7M. Sports celebrities live there to evade taxes, then fly the flag of the country they evaded taxes. Some of them even get knighted after evading hundreds of millions of pounds in taxes. Cough[Lewis Hamilton]cough.
Around the world, rich people often do relocate personally for tax purposes. One of the reasons we don’t often see rich people in the United States do this is that we have incredibly low taxes compared to the rest of the world. And that’s just nominal tax rates; in practice the super-rich pay almost nothing, which makes it even weirder how rabidly anti-tax they are.
There is quite a bit of business relocation that happens because companies are lured to different locales through tax abatements.
The much, much bigger reason we don’t see that in the US is that the US is the only country in the world that can, and does, tax citizens living abroad. Anyone trying to avoid US taxes would have to renounce US citizenship
The US only taxes the difference between the country’s tax amount and the US tax amount, at least. Someone living in Sweden may not have to pay anything while someone in Thailand may owe most of their taxes to the US. It still is wild that they demand tax money from citizens all over the world though.
That is true, although I doubt many rich people care where the tax money goes. They just care about the amount they get taxed
… and would then pay a hefty exit tax.
I’m not convinced on the “only country that can” part though.
Huh, TIL. Didn’t realize the US had an exit tax. Sounds like it forces a sale of US based assets when you renounce citizenship, then you have to pay taxes on that
On the people side, the ones who would do it are already doing it: for example rich people who go live in Monaco 6 months a year to have residence there. The one’s who aren’t doing it and simply bitch and moan about it seldom tend to start doing it because they prefer the lifestyle of being were they are rather than the “live in your yacht of the coast of Monaco”.
As for businesses, they only ever do it when they can still keep operating with the same advantages in their original markets whilst paying all taxes elsewhere that is cheaper. In regimes were taxation isn’t actually based on “place of sale” but instead on HQ location, the move their HQs to reduce the tax they pay but they don’t actually move their businesses. Such moves indicate that tax legislation is actually not taxing the doing business (i.e. their actual selling) but something else and thus need fixing.
It’s incredibly rare for a business to actually stop selling altogether in a country merely for tax reasons - instead what you see is them trying to use accounting loopholes to move their tax residence elsewhere.
500 sqft condos in Monaco sell for $4-7M. Sports celebrities live there to evade taxes, then fly the flag of the country they evaded taxes. Some of them even get knighted after evading hundreds of millions of pounds in taxes. Cough[Lewis Hamilton]cough.