Action America

"Who is John Galt?"
And where are America's rich going?

John Gaver
June 4, 2012

John Gaver In Ayn Rand's seminal novel, "Atlas Shrugged," America's most successful people were seeking shelter from a system that punished success, in a valley called, "Galt's Gulch." The USA should be so lucky today. At least Galt's Gulch was still in the United States.

Successful Americans of today, who are being punished for their hard work and success, don't have a Galt's Gulch, as a base from which to rebuild America's greatness and from which to restore our freedoms. Instead, they're leaving the USA in record numbers and due to increasingly punitive US laws, aimed at punishing those who dare to leave, most are taking all or most of their wealth with them.

Today, yet another article has appeared in the major media, that points to a significant exodus of wealth from the USA. It now appears likely that a number of influential people in government and the media must have read the recently released book, "The Rich Don't Pay Tax! …Or Do They?"

I make that assumption because, while this exodus of wealth has been going on for some years, it has only been in the last few weeks, since the release of this book that highlights this flight of wealth, that the media has begun to actually report on the very serious issues that are exposed in that book. If they haven't been reading it, then it's certainly a very unlikely coincidence that, after more than a decade of ignoring this exodus, they are all choosing now, to suddenly decide to report on these issues.

Last week, it was Panama's "Executive Order 343," designed to attract wealthy and/or talented US expatriates (expats). Two days later, it was a report about Ireland's two new programs, designed to attract wealthy and/or talented US expats, the "Immigrant Investor Programme" and the "Start-up Entrepreneur Programme."

Today, it's CNN who is reporting that the "U.S. sees a decline in millionaires", while the rest of the world is seeing an increase in millionaires. According to CNN, "Millionaire households in the United States decreased by 129,000 in 2011", while "Globally, that figure grew by 175,000."

Of course, while CNN acts like this is news, it's really something that has been going on for more than a decade. In fact, I first started writing about it in 1994. But at that time ActionAmerica was nothing more than a sub-folder on another site that I owned. The only thing that has changed is that the exodus rate has increased significantly, since Obama became president and of course, "The Rich Don't Pay Tax! …Or Do They?" was published.

In 2001, I began a study of the Forbes 400 Wealthiest Americans Lists and the Forbes World's Billionaires Lists. In that study, I determined that from 1999 to 2002, the number of US billionaires dropped by over 13%, with a 7% drop in average net worth, while the number of billionaires worldwide increased by over 80%. The last time that I updated that study was in November 2005. At that time, the new numbers showed that since 1999, the growth in the number of US billionaires was only slightly more than could be explained by inflation, while the the number of billionaires worldwide was growing at a pace six times greater (22% vs. 132%). Furthermore, the total net worth of those US billionaires grew only 5% (not even keeping up with inflation), since 1999, while the total net worth of the worldwide billionaires grew by 76%.

Now I know that those lists don't pretend to be really accurate. But it's because they have used the same methodology for years, to build those lists, that any error in those lists should propagate rather equally, from year to year. So if the list is missing 10% of the billionaires one year, then it should be missing close to the same 10% the next year.

There are only two explanations for such wide margins from year to year. 1) America's rich are getting poorer, while the world's rich are getting richer or 2) America's rich are leaving. Somehow, I just can't see our rich getting poorer, while the rest of the world thrives. So that means that they must be leaving.

But it wasn't just me who was saying this. The Merrill Lynch/Cap Gemini Ernst & Young "2003 World Wealth Report" addressed this issue. The headline of the press release for that report announced "...Number of U.S. Wealthy Individuals Drops — Goes Against Global Trend". Notice that they pointed out that this "Goes Against Global Trend." This backs up our findings from the Forbes data. According to that report, there were 100,000 fewer millionaires in the US at the end of 2003, than at the end of 2002, during a time when worldwide wealth was growing.

That was in 2003! I wasn't surprised that the major media ignored me. After all, ActionAmerica was still in it's infancy. But they also ignored Merrill Lynch/Cap Gemini Ernst & Young. It's like they didn't want the word to get out. But the word IS getting out now.

Thanks to "The Rich Don't Pay Tax! …Or Do They?" more and more people are becoming aware of this massive exodus of America's most prolific taxpayers and most profuse job creators. They're also learning why this could lead to a tremendous economic crisis, if it continues. More importantly, they're learning how easily this can be averted.

America's producers and job creators are "Going Galt." But today, Galt's Gulch has names like Ireland, Panama, Belize, Singapore, and Chile, to name but a few. And unlike the rich, in Atlas Shrugged, once offshore, these 21st century millionaires are much less likely to return, to be saviours of our economy, unless we give them reason to return, which means that we must first stop punishing success.

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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