by Simon Black
According to a recent report from Bloomberg, more than 108,000 millionaires left their home countries last year in search of greener pastures.
Most emigrated from countries like China and Russia… no surprise there.
India also saw a large outflow of millionaires as tax authorities tightened their grip. And Turkey continues to see an exodus, in the wake of strong-man President Erdogan.
But Western countries like France and England also lost boat loads (or planes full) of millionaires. Excessive taxation is the most obvious reason.
For instance France taxes the net wealth of households worth more than €1.3 million. As a result there are fewer and fewer households worth more than €1.3 million every year. What a surprise!
And the United States was the second most popular destination for fleeing millionaires.
There are plenty of great reasons to move to the US: safety, a strong economy, certain personal freedoms. It still has a reputation worldwide as a good home for the wealthy.
But if these wealthy immigrants stick around the US for a few more years, they’ll find that the country is rapidly turning into what they left behind: a country that is deeply suspicious and resentful of wealthy people.
That is especially true of New York City, which is still a top destination for global millionaires.
NYC’s mayor, Comrade Bill de Blasio, came right out and told his “brothers and sisters” that the private wealth in New York City is in the ‘wrong hands’. He thinks your money should be in his hands.
Then, of course, the Queen Bolshevik herself, Comrade Alexandria Ocasio-Cortez, led the charge to chase away Amazon’s new headquarters.
Amazon would have brought billions of dollars and 25,000 jobs to the city. But the Bolsheviks had to torpedo that idea, because some rich people would have also benefited.
Then NYC demonized hedge fund manager Ken Griffin for spending $240 million on an apartment in Manhattan. The government introduced new taxes– in addition to property taxes– specifically targeting him, and others who invest tons of money to live in the city.
Not surprisingly, this all made Ken Griffin back off his plans to move his $29 billion hedge fund from Chicago to NYC.
These wealthy immigrants who fled Europe’s insane taxes might soon realize they’ve jumped out of the frying pan and into the fire…
Sure, New York City is not as Communist as China. Come to think of it, perhaps that should be Comrade de Blasio’s new slogan– “New York: Not as communist as China…”
And yet, nearly all of the 2020 Presidential candidates are crawling over each other to out-Bolshevik one another.
Despite the fact that Sweden abandoned it’s wealth tax when it didn’t work, and France eviscerated it’s wealthy population, Elizabeth Warren proposes the same plan.
Bernie Sanders does his part by proposing shockingly high estate taxes, much like the inheritance taxes many of these wealthy immigrants are leaving behind.
We’ve heard calls for 70% income taxes, nationalization of entire industries, and free EVERYTHING.
Again, this is precisely why many of these people left their home countries in the first place.
But that’s the funny thing about wealth: it’s incredibly mobile.
Centuries ago in the Middle Ages, wealth was tied to the land. If you were rich, it’s because you had huuuuge tracts of land, and legions of medieval serfs working for you.
That was all fine and good. But it was virtually impossible to pick up and move… and bring your welath with you. The King could always confiscate your lands. And you’d instantly become poor (or dead).
Today, wealth is portable. We can shift funds across the world with a mouse click, and spread our assets across multiple jurisdictions and territories with hardly any effort.
The world is a big place, and there are a lot of jurisdictions where wealth, talent, and productivity are still highly regarded.
Just a three hour flight from New York City, Puerto Rico rolls out the red carpet for people who want to contribute to the economy.
As we’ve discussed before, Puerto Rico offers a 4% corporate tax rate, along with ZERO dividend tax when you take the money out of your company and put it in your pocket.
If you live in the US (on the mainland, that is– since Puerto Rico is part of the US), you’ll pay 10x that amount in federal tax alone, not including state tax.
Regardless of whether or not this is a good option for you, the lesson remains: the ability to remain MOBILE and AGILE is a large part of any Plan B.
[A very important part of this is having a SECOND PASSPORT– which you could obtain in a number of ways: ancestry, residency, or even ‘economic citizenship’.]
Whether you are from China, Bangladesh, France or the USA, there may come a time you decide it’s time to hit the eject button and get out of Dodge.
This can happen suddenly. And it’s best to have a plan in place before you need it.
Think about it like you would an insurance policy: you don’t call the insurance company after your roof catches fire. You have it in place as soon as you buy your home… and sleep well knowing that you’re covered.
That’s all a Plan B really is. It’s a perfectly sensible thing to think about.