Americans are opting out any way they can, and the numbers across the board are proving it both in the political shifts as well as migration.
May 23, 2022
By: Bobby Casey, Managing Director GWP
Lately what would’ve been considered a moderate liberal is now considered a right wing extremist. Democrats in Virginia turned out in considerable number for now governor Glenn Youngkin. His platform? Listening to the parents’ concerns about masks and CRT in schools.
Say what you will about both, but enough parents were fed up with how their children were being treated through the pandemic and whatever broke that camel’s back, did so unceremoniously.
People are turning out in much greater numbers to vote. That is the cheapest thing anyone can do in rebuke of what they see.
Some people voted a little harder: with their feet. According to the Tax Foundation, these are the top ten out and inbound migration states in 2020:
-
Outbound: New Jersey, New York, Illinois, Connecticut, California, Kansas, North Dakota, Massachusetts, Ohio, Maryland
-
Inbound: Idaho, South Carolina, Oregon, South Dakota, Arizona, North Carolina, Tennessee, Alabama, Florida, Arkansas
But the dust was hardly settled, because 2021 showed a shift according to AEI:
-
Outbound: California, New York, Illinois, Massachusetts, New Jersey, Louisiana, Maryland, Hawaii, Minnesota, Michigan
-
Inbound: Florida, Texas, Arizona, North Carolina, South Carolina, Tennessee, Georgia, Idaho, Utah Nevada
In all likelihood, 2020 migration reflects people shifting for lower cost of living; while 2021 migration shows people moving for lower regulations and lower taxes.
This take a little more means, but its doable.
Then there are those leaving the country entirely. I did that a while ago. I go back to the US on occasion, but I don’t live there anymore. And whenever I get fed up, I leave again.
American expatriates, that is US citizens living abroad, are estimated to be between 3.2 million according the to United Nations and 10 million according to the US State Department. Here are some interesting stats on the expats:
-
47% have been living abroad in the same country for 12 years or more. While only 31% have been abroad for 6 years or less.
-
the vast majority of expatriates are active (64%), and around 18% are retired.
-
Age groups according to the Federal Voting Assistance Program: 18 – 24: 9%, 25 – 34: 21%, 35 – 44: 18%, 45 – 54: 17%, 55 – 64: 16%, 65 +: 20%
These are nomads with commitment issues. Still, whether they are abroad for a job, family, or other reasons, they aren’t in the US.
In a recent article published by Yahoo, the commitment issues are not only gaining momentum, but they are showing in the number of second citizenships being sought and bought by wealthy individuals.
The claim is that they are seeking a “Plan B” should anything start making its way toward the fan, so to speak. The article goes on to say the main impetus behind these golden visas or passports are: COVID-19, climate change, cryptocurrency, and conflict. Whether that is entirely true or genuine, I don’t know.
It is said that the vast majority of people who buy these visas aren’t actually moving. They just like having it just in case.
One of the major issues during the pandemic was that the US passport was already slipping in its ranking from #1 in 2015 to #7 if not lower for a bit in 2020. It wasn’t being accepted in many countries due to its vaccination policies. I don’t know if that falls under “COVID-19” but it was certainly reflective of the circumstances.
Well, if the passport you have won’t get out of the US to the country of your choosing, you need a passport that will.
Some of the post popular destinations are:
-
Caribbean island Dominica’s visa can be purchased for $100,000 for an individual or $200,000 for a family of four. Among the benefits, there is no income tax on non-resident citizens and all citizens are granted visa-free travel to the 26 European countries in the Schengen zone.
-
Montenegro is Europe’s cheapest citizenship program, which costs roughly €450,000, or the equivalent of $532,000. Montenegro is on the path to European Union membership and its citizens have visa-free access to Schengen-zone countries.
-
Portugal’s five-year residence permit — which allows visa-free travel to 26 countries in the European Union — is the most in-demand program among American investors. Portugal’s “golden visa” requires a minimum investment of slightly over $200,000 and an average stay of seven days a year in Portugal. When the permit expires, residents can then apply for full-time citizenship, which can take an additional three years.
This is all great for those who are looking for an “escape hatch” for those “just in case” events. More and more people are doing this and they don’t necessarily need to be uber rich. If you want the multi million dollar visas from Malta and Austria, sure, but a couple a hundred grand is a lot more doable for a lot more people.
The number of people who are committed to leaving the US full stop is going up, too. It’s no surprise that those with the most to lose are the ones seeking to renounce. This trend to leave the US started around the same time FATCA deputized every bank in the world to rat out its American account holders.
Go figure. Big shocker.
President Joe Biden’s threat to raise capital gains taxes to as high as 43.4%, and the idea of even taxing unrealized gains, has wealthy Americans saying “enough is enough”.
They might not be a large voting block, but they do have the means to afford a divorce with the United States: a loss they are in a better position to afford than the US.
Sadly, the process to renounce has been backlogged for some time, and the pandemic has only exacerbated that problem. In an article from Axios:
David Lesperance, an international tax lawyer based in Poland who specializes in helping people renounce U.S. citizenship, says that with coronavirus shutting down interviews for renunciation, the next lists will only contain relinquished green card holders, who can do it by mail.
“There are probably 20,000 or 30,000 people who want to do this, but they can’t get the appointment,” Lesperance said. “There’s not a peak demand — the system’s capacity has peaked.”
The general trend, whether it’s state to state or country to country, is more and more Americans are looking for a way out of crappy political and economic policies
Click here to schedule a consultation on how you can protect your assets from overreaching governments, or here to become a member of our Insider program where you are eligible for free consultations, deep discounts on corporate and trust services, plus a wealth of information on internationalizing your business, wealth and life.
