Another country (Ireland) makes it more attractive for US Expats to move there!
May 28, 2012
It's happened again. Just two days ago, I wrote about how Panama had very recently created a new law, aimed at making their nation more attractive to wealthy or skilled US expats, while at the same time, the US Congress mulls over yet another punitive law that will certainly drive away more of America's most successful entrepreneurs and skilled professionals, even if it doesn't pass.
This time, it's Ireland that's rolling out the red carpet - two, actually - one for wealthy Americans and one for skilled Americans. The new Irish "Immigrant Investor Programme" is open to non-EEA nationals and their families who commit to an approved investment in Ireland and offers the investor the ability to acquire residency in Ireland. Similarly, the new "Start-up Entrepreneur Programme" provides for non-EEA nationals, who have an innovative business idea for a High Potential Start-up and funding of €75,000 to acquire residency in Ireland for the purposes of developing their business.
Both of these programs offer indefinite Irish residency, in 5-year tranches. As with other residency programs in Ireland, these residencies can open a path to Irish citizenship.
Like Panama's recent Executive Order 343, these Irish laws are clearly aimed at attracting a healthy share of the many wealthy or skilled US citizens that our government is increasingly driving out of the USA, with laws that punish success.
Remember that wealth is like water. It seeks the path of least resistance and it's extremely difficult to build a strong enough structure to keep it in. Furthermore, the more water (or wealth) you're dealing with, the stronger any such structure must be, if you are to successfully keep it in.
In my book, "The Rich Don't Pay Tax! …Or Do They?" I point out that if you want more of a thing, then you reward that thing and if you want less of a thing, then you punish that thing. Well repeatedly, over recent years, our government has passed onerous laws that increasingly punish success. So naturally, we can expect less success.
One of those laws required successful US expats to pay US income tax for 10 years after renouncing. Another made successful expats permanently excludable (meaning that they could be permanently denied re-entry into the USA for any reason. The Wall Street Journal called this law the "...and Don't Come Back" law.
Then there was the law that created what many of the tax and spend crowd in Congress mistakenly called, "The List of Shame." It required the names of every US citizen, who had renounced his citizenship in the last quarter, to be printed in the Federal Register. There was no governmental purpose to this law. It was just meant to embarrass potential expats into staying. But US expats didn't see it that way. In fact, in my conversations with US expats abroad, almost all see those lists as a badge of honor. To them, the names on those lists represent people who escaped and had the courage to tell the jailer where he was going.
But the worst of those laws was the 2008 "Heroes Earnings Assistance and Relief Tax Act," that imposes a mark to market tax on the worldwide estate of successful US expats, at the time of renunciation. It treats all of a successful expat's assets as though they had been sold the day before renunciation and is based on the estimated market value of the asset, the day before renunciation.
Now, Senators Charles Schumer and Bob Casey, along with other tax and spenders are proposing a bill aimed at further punishing those who have the audacity to make more than a meager amount of money and want to actually keep what they've earned. The Ex-Patriot Act would impose a hefty exit tax on successful expats and make them permanently excludable. Seems the legacy senators must not have read the bills that they voted for, since as pointed out above, those penalties are already part of US law.
That's right! They're pushing to pass a law that already exists!
It's precisely because those penalties are already a part of US law that the Ex-Patriot Act will likely not pass. But it will do a tremendous amount of damage to our economy anyway. You see, since Congress has spent last couple of decades passing more and more laws that are increasingly punitive toward those who have achieved any degree of success, just the talk of this bill will generate concern among a lot of successful people. Many of those who have considered renouncing, but who never could bring themselves to actually take that step, may realize that whether this bill passes or not, Congress isn't about to stop. Each time another "soak the rich" bill passes, more successful people reach the conclusion that it's just going to keep getting worse.
The attitude that's adopted by most prospective expats, who come to that realization, is to get out while they still can. Of course, as more leave, Congress will just panic further and try to pass even more punitive laws, in an effort to try to "force" the remaining successful people to stay. But after each successive attempt, whether it passes or not, more successful people will leave.
Wealth is like water. 1) It will always find the path of least resistance and 2) it requires a strong force and continuous maintenance to keep it in.
Panama and Ireland obviously realize these things and they're competing for a larger share of those successful and/or skilled US professionals, who are going offshore. While our government is busy building a statutory dam to keep America's most prolific taxpayers within the jurisdiction of the IRS, free nations like Panama and Ireland are working hard to turn their countries into the path of least resistance for America's disenchanted and abused entrepreneurs, tradespeople, and other producers.
What's wrong with this picture?...
Read "The Rich Don't Pay Tax! …Or Do They?"
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Learn who really pays what amount of tax, how this disparity is silently ravaging our economy and could sink it, and what you can do about it. Don't delay. Order your copy now, in Print, Kindle or Nook format.
Copyright 2013 John Gaver
All rights reserved
See related articles and supporting documents:
1986-2008 IRS Collections Data by Income Category
Obama agenda drives record expatriation
Tick - Tick - Tick / The Economy Bomb
Tax Freedom Day Builds Case for FairTax
US Tax Freedom Day Clock Web Widget
UK Tax Freedom Day Clock Web Widget
US Tax Freedom Day Clock
US Tax Freedom Day Clock Widget (for Mac)
UK Tax Freedom Day Clock Widget (for Mac)
The Privacy Factor
More Attacks on the Wealthy
US Taxpatriates List
2000 Statistical Yearbook of the Immigration & Naturalization Service (6.2mb PDF)
2003 World Wealth Report (Press Release)
American Citizens Residing Abroad (US Bureau of Consular Affairs)
Health Insurance Portability & Accountability Act of 1996 (26 USC 877(a)(1))
Immigration Reform and Immigrant Responsibility Act of 1996 (8 USC 1182(a)(10)(E))
Heroes Earnings Assistance & Relief Tax Act (Public Law 110-245) (8 USC 1182(a)(10)(E))
The Economic Impact of Replacing Federal Income Taxes
with a Sales Tax (CATO)
Fair Tax Act of 2011 (H.R. 25)
Americans for Fair Taxation
National Retail Sales Tax Alliance
See Expatriate sites: