Panama makes it even easier for Americans to expatriate to Panama!
May 26, 2012
As if to put a giant exclamation mark over my new book, "The Rich Don't Pay Tax! …Or Do They?" Panama has just made it even easier than ever, for US expats to live AND work in Panama.
I just learned that on May 16, 2012, Panama, following a trend that has been going on for some time, made it even easier and more attractive for American expats to move to Panama. This new law means that American expats and certain others may not only live in, but work in Panama. According to the Official Gazette (roughly the Panamanian equivalent of our Federal Register) Executive Order 343 of 16 May 2012, creates a sub-category of Permanent Residents comprised of "foreign nationals from specific countries that maintain friendly, professional, economic, and investment relationships with the Republic of Panama." Of course, the USA is on that list of prefered immigrant nations.
What Panama is doing is creating a huge magnet for foreigners with either skill or money, to move to Panama and work or start a business, at a time when the US government is making it increasingly punitive on those same people to stay in the USA.
Don't be fooled. Laws like Schumer's Ex-Patriot Act only serve to drive more wealth out of the USA, not keep it here. In fact, the tax and spend crowd in Washington, DC has been using similarly punitive laws for decades, to try and "force" successful Americans to stay in the USA, where the government can continue to punish them for the perceived crime of having worked hard and achieved a measure of success. I've documented a number of these failed attempts, going all the way back to 1996, in "The Rich Don't Pay Tax! …Or Do They?"
In every case, the laws meant to punish wealthy expats for leaving actually created the incentive for more to leave. Those laws usually attempt to make it more costly for the wealthy to leave. But what the wealthy see is a trend by government to box them in and make sure that they can't be too successful. They see each successive law aimed at controlling them, as yet another brick in an economic Berlin Wall that will soon be completed. So with each such law, more of America'a most successful people decide to pay the price now and leave, while they still can, rather than wait till the cost to leave will be even higher.
When I write about this flight of America's most effusive job creators and most prolific taxpayers, people write and ask me where these successful people are going. Well in fact, there is no single place that they're going. There is no "Galt's Gulch," as there was in "Atlas Shrugged." Every person has is own idea of what is the best work and investment environment for him. But I'm sure that with Executive Order 343, Panama is looking a lot more attractive to many prospective expats.
Panama is already one of the preferred relocation countries for US expats. In the photo below, every yellow arrow indicates a skyscraper under construction in 2010. As I recall, the one on the right is Trump Tower (now open).
Panama City Skyline 2010 © John Gaver
This isn't the Panama of Noriega. It's a booming, emerging nation that offers lots of opportunity for investors and professionals, alike. It offers the kind of privacy that we have not seen in the USA since the War on Drugs went rogue. The only thing that Panama doesn't have, is enough skilled workers and well-heeled investors to keep this economic engine running at full steam. Executive Order 343 is obviously meant to solve that problem.
In the mean time, people like Schumer and Casey are trying to pass yet another law meant to force successful Americans to stay here.
But here's the really ridiculous part of what they're trying to do. The two cornerstones of their Ex-Patriot Act are ALREADY PART OF US LAW!
You read that right. The Ex-Patriot Act is supposed to:
- Impose a heavy tax on Amerians who choose to formally renounce their US Citizenship, but only if they're wealthy and;
- Exclude any American expat from ever returning to the USA, but again, only if he was wealthy at the time of expatriation.
So let's take them by the numbers.
- The 1996 Illegal Immigration Reform and Immigrant Responsibility Act states, in Title III, sec 352, "Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is excludable." As I stated above, it's already part of US law.
- The 2008 Heroes Earnings Assistance and Relief Tax Act states, in Title III, sec 301. REVISION OF TAX RULES ON EXPATRIATION., "All property of a covered expatriate shall be treated as sold on the day before the expatriation date for its fair market value." This is a mark to market Exit Tax. But it only applies to the wealty. Again, it's already a part of US law.
It seems that Schumer forgot what laws he already voted for or, more likely, never read them.
So what this means is that the only thing that the Ex-Patriot Act would do, is to draw more attention of successful Americans, to how oppressive our government is becoming toward those who have been successful.
As word of Panama's Executive Order 343 reaches these successful people, it could well be the deciding factor for many of those who have delayed leaving.
Read "The Rich Don't Pay Tax! …Or Do They?"
in Paperback, Kindle or Nook format.
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: