A reader prompted me to blog action recently by posing this question to us:
I’m an engineering student, have read Atlas Shrugged, and agree with the majority of Rand’s principles. My question is, why did you elect to shrug rather than moving to a lower-taxing country?
You pose an interesting question – one that we struggle with intermittently as we occasionally reconsider our decision to, thus far, shrug inside the geopolitical entity currently known as the United States.
First allow us to address the specific question as to why we did not move to a lower tax country. Part of “Shrugging” for us includes working significantly less (but at a good hourly rate) and thus reducing our taxable income. We have taken further steps to minimize taxable income by incorporating and utilizing whatever legal options for reducing taxation we find practical. That said, we certainly do eye lower-tax and less regulated countries with jealousy and do contemplate if we could move our incomes to one of these countries and enjoy a much higher standard of living.
There are many other things we take into account when contemplating expatriating.
Inexperience. We are inexperienced travelers. Although our travel experience in North America is extensive, we’ve rarely ventured outside of the continental United States. This is both a barrier to travel itself and a barrier to formulating concrete opinions of countries we study.
Costs. We have a large family and while we could leave our offspring with relatives while we globe-hop, we generally involve our children in every aspect of our lives. Flying or sailing with six people is expensive. Beyond the financial costs, we’re not particular fond of exposing our children to being traumatized, radiated, or groped by government employees.
Freedom. It’s not all about money. There are some freedoms that the United States are still number one in. Of particular importance to us are the right to self-defense and the right to keep and bear arms. Over the past couple of decades, almost all states have liberalized laws in this area. We’re way beyond almost any other country. We both carry firearms and our oldest two have built their own AR-15s and join us at the range. Would we be willing to give that up for lower taxes?
Familiarity. We grew up here. We know the culture, the people, the customs, the laws, the religions, the geography, the roads, the job markets, and the gotchas. While there would be fun and excitement involved with the learning experience in moving to another country, we think there’s an edge in familiarity if the global economy was to experience another major and potentially catastrophic downturn.
Variety. The 50 states have an amazing variety to offer anyone willing to vote with their feet. By deliberate and educated decision, we live in a sparsely-populated rural mountainous area in a fairly libertarian state. We enjoy no traffic, no serious crime, no pollution, very little local government, and good distances between neighbors. Would you give that up and live in the towering urban sprawl of Singapore just to enjoy the admittedly much more laissez-faire economy?
Family. Our family all lives in the United States. Admittedly, not near us, but the barriers to travel are still very low compared to asking them to spend a couple of days on a plane to visit us in New Zealand. Family is important to us and this is an important factor.
Language. Between us we speak un peu de Français et Español solo un poquito. While there are many places in the world we could go and never learn another language, this is an intimidating factor to many possible countries. We’d feel an obligation to dive into the local language and culture, and the time involved is something to consider.
I’m not sure any one of the items we’ve enumerated above would thwart us from expatriating, but the combination has thus far prevented us from doing much more than surfing some foreign real estate sites.
If you’ve done more research than us and have an ideal location picked out, please comment and let us know.