Are Wealthy Americans Leaving the Country?

I thought I would share my process for gathering viewpoint and facts.  Perhaps others would offer to put articles together in the future, but if nothing else, a look into how I brainstorm a publication:

The high-middle and high-earners in America  pay for the majority of social programs implemented by Congress.

With states facing nearly $100 billion in combined budget deficits this year, we’re seeing more governors than ever proposing the Barack Obama solution to balancing the budget: Soak the rich.

American Senators and Representatives should be thrilled, but instead disparage them for making the money that those Congressmen desperately need to tax.  What happens if they leave?

Perusing democraticUnderground.com, one would find the following comment:

“LEAVE. Take your money and go. America will survive without you… So rather than ruin our country for the other 90% whom you despise. Go away. Take all of your precious money and go elsewhere. Even if it means depression we will be better off in the long run without your manipulation..”

Liberals would love to see anyone with capitalist or free-market ideals leave, but seriously, would they really?  Sure, the populist view is to hate the wealthy – go Robin Hood and such.

Last September, Bob Bauman reported that, “Indeed, the growing trend of Americans voluntarily ending their status as U.S. citizens — the only legal way by which they can escape U.S. taxes and government controls — has reached a new peak and shows no signs of abating.”  Heck, even the radical left site, DailyKOS.com reported that the Bush family bought thousands of acres in Paraguay.  Although Obama doesn’t see what he’s causing, apparently his predecessor and his family did.

How serious are these ex-patriots:

Interestingly, although such a move offshore means departing Americans may have to pay an exit tax that the Democrat Congress and George Bush imposed in 2008, lawyers say this is a price people have become more willing to pay this year, now that recession and decreased asset values has reduced the size of this onerous and unfair tax.

So why do the non-wealthy care?  The top 1% of all earners pay 40 percent of all taxes. Examine the recent health care bill that relies heavily on the wealthy to fund the measure.  If there are not enough wealthy people, the rest of will be left to foot the bill.  A cost the rest cannot afford.

Continuing to hate top-earners for working hard and taking risks is counter-productive.  At some point, the government has to realize that not everyone can work for unions for middle-class wages unless the government is willing to tax middle-class wages at much higher rates.  It is well-known that our legislative branch would never admit such a truth.   Why should they, it would cost them their precious seats.

Wealth Bulletin quotes Jay Krause, a partner at private-client specialist law firm Withers who says he’s seen a rise in those interested in expatriation lately

We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts. -wsj.com

Those who disapprove of tax competition complain that lower state taxes only create a zero-sum competition where states “race to the bottom” and cut services to the poor as taxes fall to zero. They say that tax cutting inevitably means lower quality schools and police protection as lower tax rates mean starvation of public services.

The Live Free or Die State has no income or sales tax, yet it has high-quality schools and excellent public services. Students in New Hampshire public schools achieve the fourth-highest test scores in the nation — even though the state spends about $1,000 a year less per resident on state and local government than the average state and, incredibly, $5,000 less per person than New York. And on the other side of the ledger, California in 2007 had the highest-paid classroom teachers in the nation, and yet the Golden State had the second-lowest test scores.

Christian Kälin, a partner at residence and citizenship planning consultancy Henley Partners, said his firm has had a big rise in such inquiries.
He said: “Tax reasons might be the biggest reason why US citizens will want to drop their passports..” – clubconspiracy.com

Jay Krause, a partner at private-client specialist law firm Withers, said: “The number of inquiries from US citizens wanting to expatriate from their citizenship has increased rapidly in the last year.” – wealth-bulletin.com

To become a resident of Costa Rico for instance only requires proving an income of $50,000 USD per year.  Put $1,000,0000 in the bank and cut a crappy 5% annual and you’re in.   That is nothing serious for a middle-upper earner in their mid-50’s.

*notes:

1. what would keep the wealthy here
2. what is the worth of upper-middle income ($200,000) to the American economy
3. Is the ObamEconomy more about bringing everyone to the same lower-middle class status?
4. How does Obamacare and the financial reform bill increase Americans worth/income?