A Tight Tax Leash Constrains Americans [5]
By Nick Giambruno, Editor, International Man
Many readers are already well aware that the US government is essentially unique - and not in a good way—in how it treats its citizens living and working in foreign countries. No other country in the developed world imposes and effectively enforces as many burdens on its citizens abroad (and those who would do business with them) as does the US government.
Whether it is filing and paying taxes to both a foreign government and the US government, the reporting of foreign financial assets (FBAR and Form 8938), or saddling foreign financial institutions with extra compliance costs for dealing with US citizens (FATCA), among others, the root cause of these burdens is a system of citizenship-based taxation (CBT).
The US is the only developed country in the world that enforces CBT.
The rest of the developed world uses residence-based taxation (RBT), which means filing and paying taxes only in the country in which you reside, as opposed to the country of which you are a citizen.
It is critical for Americans considering internationalization to understand the difference between CBT and RBT. This two-and-a-half-minute video does a good job of spelling it out.
Dealing with the burdens associated with CBT is an unfortunate fact of life for Americans.
It is not likely to change in the foreseeable future. In fact, I would bet that the burdens will actually increase as the US government becomes more financially desperate. That is a significant incentive to act sooner than later… or before it is too late altogether.
However unpleasant this reality is, it does not negate the need to internationalize.
Quite the contrary.
As spending on welfare/warfare related programs continues to rise, it is clear that US government will sink deeper into fiscal and moral bankruptcy, with political risk increasing in tandem.
It is far better to deal with the burdens associated with internationalization than to leave your savings, your income, and yourself in range of a desperate government's wrecking ball.
Taken together, being compliant with all the requirements can feel like navigating a confusing hedge maze with draconian consequences.
We live in a time of great uncertainty. Any number of black-swan events (economic or otherwise) are not just plausible but likely; the feeling that we are on the precipice of a new, large, and global war; and the likelihood that the US will become a full-blown police state after the next large attack are all good reasons to have an insurance policy.
Being internationalized gives you the peace of mind of knowing that you have options at your disposal if you should ever need them.
While Americans may need to internationalize more than citizens of other countries, everyone with assets to protect may benefit from moving some of them outside one's home country. Questions of "how" and "to where" are natural, as scams abound.
The comprehensive special report titled Going Global 2013 can help investors steer clear of them, as well as other mistakes a well-meaning person might fall into. The report addresses: what countries are best for you and your money (they are often not one and the same); the best ways for Americans to keep their hard-earned money from the IRS; stock markets and currencies around the world that are good investment bets; setting up an international trust; and much more.
With specific, actionable advice, Going Global 2013 can provide your money with "diplomatic immunity"... and your life with a fresh start. Get all the details and get started now. [6]