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The Tax Haven Escape

Supposing you won the National Lottery or the Football Pools and you became very rich, would you choose to live in a high-tax country, or would you choose to escape? Your choice may be influenced by the fact that if you live in the UK, you're not allowed to pass on your wealth to your children if you die, as the UK government has imposed a 40% tax on death. Also, living in high-tax countries such as the UK and the USA, almost every aspect of life is taxed, in one way or another. Income is taxed, and so is spending (vat, purchase-tax), and there are various sneak taxes on things you wouldn't expect. However, if you could afford to ESCAPE, then you could be free of these things, couldn't you?

The thing is, nine out of ten cats said they preferred to eat their entire dinner rather than have 40% of it taken away and thrown to the dogs.

It therefore seems somewhat disingenuous that politicians are going on about tax havens in speeches using the same sort of codswallop as they use versus drugs and terrorism. It's a bit like the way Soviet Communists denounced the decadent capitalists and went on about how the communist equalist system was far better and would bring about a glorious society. (History notes the collapse of Communism).

One of the reasons people are so gullible as to fall for their rulers' political pontificating about tax havens is that the folk in the target audience are victims of the credit crunch, people who consider themselves hard-up and feel a terrible envy towards anyone who is rich. Also see The Gap between Rich and Poor, and another piece of flim-flam: Zero Tolerance. Also bearing in mind the deceivers have a tactic of disinformation to muddle up the difference between tax avoidance and tax evasion, as an attempt to make rich people appear to be criminals.

Nevertheless, you would like to be rich, wouldn't you?. Plus, if you became rich, you would want to live somewhere better, somewhere that had no tax (or almost no tax), somewhere that didn't have overbearing laws and oppressive government control of everything, and somewhere that you weren't under surveillance, maybe somewhere that had warmer weather, with palm trees and beaches, with clean air, no compulsion to toil, and where you could keep your money yourself, possibly in a bank account in a reliable bank that works for its customers not the governments and tax collectors of the grimy oppressive place you left behind.

This is essentially the nature of Tax Havens, the idea that you can escape from the tyranny and oppression of the high-tax country which you are apparently stuck in. Plus, as well as it being a matter of personal freedom, it's also got a "free and fair competition" aspect. With the world's economies teetering on the edge of collapse, a desperate last-ditch attempt is being made by the high-tax countries to try to justify their own uncompetitiveness. Meanwhile in the wider world, more efficient countries exist. These are the tax havens.

When you are choosing which country to live in, you should consider that there's more to it than tax. Personal freedom is important, and also it's good to make sure the culture is something you can get along with.

If you haven't yet managed to become rich, there are some pages about how to solve that. How to Get Rich, How to set up and run your own business, etc.

One of the key features to the modern world, as opposed to the retro world that existed a while ago, is that there is The Internet, which defeats the parochial garden-fence borders of countries and makes the world more global, more international, and it means that you can set up your own business stall alongside the data super-highway and start to attract global business, rather than being stuck having to set up your stall on the backstreet of the numbered quadrant of the something-or-other ghetto of the smalltime conurbation which Big Brother has dictated you shall live in, under those public spy-cameras which are "for your own protection".

Though it may seem a minor issue, it is being underplayed. You need to ESCAPE and to up-sticks and move out of the country and move to a tax haven, in order to get the benefit of the tax efficient solution. Tax havens aren't about having some underhand system of getting around the rules. Instead, you escape, and then the rules don't apply to you.

It's no good jealous politicians saying things like "We will crack down on the super-rich and stop investment in tax havens". Quite the contrary; we the rich people will LEAVE and stop investment in the poverty-stricken countries which have been so badly run by politicians. Even moderately well-off people like me are leaving. The exodus is hastened by bad political management.

Also, make sure you really escape, and don't leave any doubt. Bankrupt tax-heavy countries have been known to "move the goalposts" and to change the rules so as to ensnare people who had kept by the letter of the law on previous tax rules. Beware of courts making arbitrary decisions which lead the country into being morally bankrupt as well as economically.

Escaping from a country is a vote with your feet, a vote of no confidence in the country, so don't let them say you're still there. We are abandoning the sinking ship... squeak...splosh!

Also see My Emigration and Setting up Offshore Bank Accounts