This Would Make For A Great Movie Plot
F.H. disagrees with my assessment of the chances that China’s decision to tax its nonresident citizens on their worldwide income as the United States does will lead to every country taxing citizens no matter where they live. In short, I say it won’t happen.
He writes:
“This is the future, and the complexity will shrink like snow under the sun. The very next step is going to be a ‘world’ social security number that will be mandatory to open a bank account. Then, and it’s currently running, the automatic exchange of tax and banking information. You just have to match this with that and send the bill, wherever the guy lives.
“The countries that persist on not taxing their citizens, Bahamas, Belize, etc., will comply or be invaded.”
Maybe I’m naïve, but I find it hard to see how the scenario that F.H. lays out evolves without a bigger military play than simply invading Belize. This country doesn’t have a standing army, by the way. The U.K., its former colonizer, is required to protect it. So now we’ve got some global military unit engaging in combat with the U.K. over Belize’s tax structure.
OK… crazier things have already happened…
But who runs the imagined “world social security number” program? Who collects the taxes? Who distributes them? Most important, who gets the distributions?
Certainly an apocalyptic scenario in which the United States and China, desperate for tax revenues, engage in the systematic hostile takeovers of countries and their tax bases to continue to feed their government industrial complexes is entertaining. Should we cast Liam Neeson or Brad Pitt as the hero of this movie?
The 1% New-World Order
With reports out this week that the top 1% of the global population holds more than 50% of the total global wealth, I’d like to propose an alternative storyline. How about if the 1% get together to decide that the world’s governments are too incompetent to be allowed to continue? The world’s wealthy then fund a joint private army that rivals anything the United States, China, or Russia could pull together. Then they eliminate government altogether everywhere and set up economic fiefdoms. I like Harrison Ford for this flick if we can get him.
Speculation and paranoia are rife in the offshore world. Without them, how would all the scammers hawk their wares?
The rest of us have to live in the here and now, which is why I advocate a straightforward strategy. Diversify your life offshore. It’s the only sensible thing any of us can do.
You can’t worry about doom-and-gloom scenarios or fantastical predictions built around things like global social security numbers. Bet all your popcorn on that scenario, and you’re likely to find yourself sitting alone on a suitcase of gold coins in a remote region of Borneo.
Protect your assets under current rule of law. Set up a trust if you have sufficient assets to warrant it. Spread your investments around both by asset class and location (that is, in different countries). Open bank accounts in different countries, too, to increase your chances to have access to at least some of your funds should one bank or banking system shut down. Hold some gold where you’re physically located as a last resort for feeding your family. Better still, buy some land where you can produce your own food.
Bottom line, though, you need to keep things in perspective. You need a plan to keep and protect what is yours, but you also need to enjoy your life.
If you buy into F.H.’s apocalyptic scenario, you could take yourself off the world’s radar altogether, I guess. Harder to do this all the time but still possible. You could run away to try to avoid the impending doom, whatever form it takes. But where would that leave you? Alone with your box of gold in some Bornean jungle…
I’ll continue to take my diversified chances. Alone in Borneo, eventually you’d run out of your meds.
Lief Simon
Mailbag
“I’m curious about the interest in Colombia. About 20 years ago, a friend of mine and her family purchased a farm in Cali, Colombia. They were there for four years when the government took the farm away from them, and they had no recourse but to return to the U.S. empty-handed. Can investors feel more secure these days? I see your emails and shake my head and say ‘No way!'”K.C.Without knowing the circumstances, it’s hard to speak to something that happened 20 years ago, but we’re comfortable and confident with our investments in Colombia today.
This country is a very different place today than it was two decades ago. That’s why I’ve planned a conference in Medellin in May. You want to be looking at what Colombia has to offer; I’m putting together a team of experts, expats, and investors to help you do that as efficiently as possible.
All countries come with risks, including the United States. Take a look at these links: