

For the very rich, citizenship is a problem to be solved. - markkat
http://hubski.com/pub?id=3032

======
Adaptive
Worth noting that several dual-citizenship friends have, over the last couple
years, renounced US citizenship for tax reasons in each case. Very little
appealing about being a US citizen for the very rich.

What this article fails to note is that the last thing the very wealthy want
is a new form of citizenship or new country. Being a citizen of any given
country becomes more like selecting the clubs you belong to based on the
value-added services they provide. Starting a new club is a headache. There
are plenty of reasonable ones out there.

And for the most part these clubs are already run by the super rich. The rest
of the citizenry is just mowing the lawns as far as they are concerned.

~~~
markkat
>There are plenty of reasonable ones out there.

That may be true. I have a good middle class friend that move from the US to
Norway for higher taxes but great social programs. If you can handle the
winter, not a bad deal. He loves it. Interesting that the citizenship decision
might be moving closer to something like the job search.

~~~
Adaptive
Funny, my wife, friends and I were making a short-list of some reasonable US
alternatives last night (we've both lived much of our lives outside the US
though are in it now) and all our top picks were cold, northern, and
civilized. Norway was on it.

~~~
mahyarm
Singapore? It's civilized, jungle hot and crowded.

~~~
Adaptive
Based in HK for a long time, spent lots of time working in SG as well and have
family there now. We've talked about going back there too.

I like what they've done to push cultural development (something HK _never_
did effectively or seriously). Still a bit too fascist disney, but since we
have kids it's pretty fam friendly.

I'd say it's on our list for a short term stay, a couple years maybe. Penang
too, which is a slower pace, differnt vibe.

------
glenngillen
It's not entirely true that citizenship determines where you pay most of your
taxes, in fact it might only be true of the US. It's certainly not been the
case for any other country I've lived in. Most have a residency test, if
you're in the country cumulatively for 186 days you pay tax there. If you've
had tax taken out of your salary in a country where you are not a tax resident
and the country has a double tax treaty with whoever you are meant to be
paying tax to then you can use it as a credit against any tax liabilities you
may have there.

The UK is a bit of an exception, in that foreigners in the UK can declare
themselves "non-domiciled" and not declare any foreign income they did not
bring into the country. A bit of a loophole if you're foreign, wealthy, and
can afford to leave most of your money offshore. Probably explains why there
are so many celebrities and billionaires living in London.

~~~
BerislavLopac
Hm, I'm wondering, what if you travel around and you never spend more than 186
days in any single country? Assuming you visit only the countries that use
that same approach, does it mean that you never pay any taxes? Doesn't sound
plausible to me...

~~~
dualogy
What's not plausible about this? People are doing it. It's not even much of a
"loophole" since ultimately, 90% of people prefer to settle down for residency
somewhere rather than keep travelling for years. The tax man always goes after
the average 90% of people first. But yeah, depending on your citizenship you
can do this, known as PT: "permanent traveller", perpetual tourist, previous
tax-payer etc...

Be sure to know the rules of the countries you visit and more importantly
those of your citizenship country. If you're German, you cannot do this less-
than-180-days-per-year operation if you hold "tangible economic interests in
the country" such as: being employed there, having property interest there, or
other assets such as company shares in or from within the country etc.

So again, not a workable "loophole" for the majority of people but a decent
state of affairs for the vast minority of Tim Ferris-style indy web-biz
travellers with no significant "financial" assets or interests inside the
country of citizenship.

------
benwerd
I don't see this as something just for the very rich. Citizenship is less of a
big deal for Americans because they're so geographically isolated, but
elsewhere, people cross national borders very often indeed. (Compare it to how
often you cross state lines.)

Wealth has very little to do with it globally, at least beyond a certain
value. It's to do with mobility of assets, of yourself, and of the people and
things you care about.

I'm actually pretty convinced that borders and nations as we know them are
another example of a bottleneck that is ripe for innovation by a new model -
think of AirBNB or GetAround as tiny little proofs of concept for a much
bigger possibility.

------
Vivtek
I think if the rich seceded from the other nations, they'd find they'd need
national defense pretty damned quickly. Economies of scale would probably make
the seceded "nations" look a whole lot like all the other nations in short
order.

~~~
prostoalex
It's a tough choice choosing between variety of PMCs (
<http://en.wikipedia.org/wiki/Private_military_company>) like Xe
(<http://en.wikipedia.org/wiki/Xe_Services>) or paying up to join an alliance
(<http://www.nato.int/cps/en/natolive/index.htm>).

~~~
Vivtek
Either way, you _have_ to spend the money. If you have to spend the money, you
have to collect taxes. If you have to collect taxes, what are you gaining by
sitting on a big float in the Pacific instead of living in London or Manhattan
where the operas are?

~~~
prostoalex
I don't think it's ever about 0% taxes. It's about making governments compete
for customers who have a choice of where to spend their tax dollars, and would
prefer more bang for the buck.

~~~
Vivtek
Or, more realistically, less benefit for people they don't like.

~~~
prostoalex
Well, they're joining that virtual country by choice. People frequently enter
partnerships where they don't like the counter-party, but they realize the
partnership makes sense for both of them.

------
bluekeybox
The source of my power is that I belong to no country.

\-- The Count of Monte Cristo

------
glenra
For a citizen of a miserably poor and corrupt nation, their citizenship is
also a problem to be solved. The surest way to help the poorest of the poor is
not to send them food or money (that will likely be seized by their
oppressors) but to give them _a way out_ , some place they can go and live
safely. All the existing nations are essentially closed to poor immigrants; if
this works, it will be an escape valve for some fraction of the poor in poor
countries as well as the rich in rich ones.

~~~
hollerith
That is the problem Paul Romer is trying to solve with charter cities.

------
gexla
You can already buy a citizenship in a number of countries.

EDIT: Commonwealth of Dominica, Saint Kitts, Nevis and Austria are places that
I know of.

~~~
ajays
You can buy a US green card too. Just invest $1M somewhere, and you get a
green card. So in effect the money stays with you, thus you're not even
"buying" the card; just flashing the dough to get the card.

~~~
kristofferR
You actually only need to invest 500K if you're investing in certain qualified
investments or regional centers with high unemployment rates.

If you're lucky you might make a large portion of the money back or even earn
money on it.

------
ddw
> You do not use or need other characteristics of citizenship such as social
> services and national defense.

Yes, but they need our money to pay for their "libertarian dream." Anyone that
actually does this is detestable.

~~~
dualogy
They use "our" money for this, ie. yours? They robbed you? Or did you count on
their income, as your income?

------
joe_the_user
For a democratic nation, super-rich citizens who essentially flout the rule of
law is a problem to be solved.

If a democracy establishes workplace safety and minimum wage laws and a super-
rich citizen sets up an ocean-liner/sweat-shop just outside the borders of the
nation, what should we do?

Super-rich individuals often already can attain citizen status which puts them
further from any jurisdiction that will given them problems. That would only
exacerbate the problem.

------
ristretto
Actually, wealthy people are even better off with the current system where
they can hide their wealth in a number of competing low tax regimes in the
outskirts of the world. It would actually be funny to see this thing coming
true, and then turning to a prime terrorist target. Where would they build
their defense missiles, in the basement?

In any case, despite the ridiculousness of the idea, this shows that the
current sovereign-state compartmentalization of the earth is no longer the
best way to run it and we need worldwide cooperation to both fight tax evasion
and allow greater mobility of people and goods. Isolating the rich from the
masses is only a good idea in the sense that it ends in an explosive way, like
the french and bolshevik revolution.

~~~
markkat
Why not just have one extremely low tax regime? They can still keep their cash
where they like, but without the effort of evading taxation. Also, why do they
need to live at this place? If they had visa treaties, this citizenship could
be essentially digital. Or, if there was a locale, you could just have an
address there.

~~~
ristretto
What makes you think that "keeping their cash there" is beneficial to any
society? I am obviously getting political here, but money for its own sake
should not be a goal. Money should be invested or taxed.

~~~
markkat
>Money should be invested or taxed.

Agreed. But there is what should be done, and what is done. I don't think this
is anyway admirable, or of any benefit to society, (it's basically taking
wealth harvested within a system out of that system) but I do see that it
might be a possible solution for a perceived problem that exists for very
wealthy individuals.

~~~
bd_at_rivenhill
You're ignoring one particularly American problem, which is that Americans who
harvest wealth outside the system of their country of citizenship are still
required to pay taxes to it. I suspect that these sort of proposals would
probably go away if rich Americans who moved to Hong Kong or Singapore were
not expected to continue paying into Uncle Sam's coffers.

------
maeon3
You can use money to compensate a male or female to marry you and live with
you for say 10 years. I think this would work in most nations.

With enough money, you could purchase nations and then make your own laws to
your hearts content. Give me control of a nations money supply, and I care not
who makes laws.

If you have money, then anything is possible. Without money, nothing is
possible. That's why everyone is trying to get money. Money is life.

~~~
locopati
That's a pretty sad statement. Life is life.

------
donnaware
why not create a virtual nation on the internet, the overhead would be very
low.

~~~
markkat
I think that is actually the most likely possibility for this. Why do you need
land?

~~~
Vivtek
Try living in the Internet.

~~~
donnaware
Ray Kurzweil thinks that will be possible by 2045, crazy, but he has been
right before. Hope I am around to find out :)

~~~
Vivtek
I'm scared enough to put an application in the cloud - by 2045 I'm going to
feel comfortable putting _me_ there? 2545, maybe. I'll get back to you then.
Kurzweil's wrong on this one, and I say that as a convinced Singularitarian.

