Wednesday, April 14, 2010

Time to Debate the Income Tax?

Bill Murchison of the Dallas Morning News correctly asserts that it is time for America to have a legitimate discussion regarding the current income tax scheme. The current income tax is becoming a “soak-the-rich” scheme that will have diminishing returns. As the government continually coerces the same demographic to give up their income at increasing rates, these people will look for new, creative ways to reduce their tax liability or worse, and by that I mean expatriation. There is a heightened interest among America’s wealthiest individuals to give up their US citizenship in order to reduce their tax burden. Here are some examples of US Expats who told Uncle Sam to pound sand (courtesy of the Escape

Michael Dingman, chairman of Abex, and a Ford Motor director. Dingman is now a citizen of the Bahamas and lives there.

Billionaire John (Ippy) Dorrance III, an heir to the Campbell Soup fortune. Dorrance is now a citizen of Ireland and lives there as well as in the Bahamas and Devil's Tower, Wyo.

J. Mark Mobius, one of the most successful emerging market investment managers. Born a U.S. citizen, Mobius has the German citizenship of his ancestors and lives in Hong Kong and Singapore.

Kenneth Dart, an heir to Dart Container and his family's $1 billion fortune. He is a citizen of Belize and works in the Cayman Islands.

Ted Arison, founder of Carnival Cruise Lines. He kept Israeli citizenship and now lives there.

While this list is limited to the ultra-rich, the interest in expatriation is on the rise. According to a 2009 article posted on, specialty law firms are seeing a rise in clients who are inquiring about expatriation, especially from Americans who live and work abroad. In response to this interest, the United States Congress amended tax laws to stick it to expats one last time before they escape by creating an exit tax payable 90 days after exiting the United States.

When the powers that be create a better mouse trap, they create a smarter mouse. People are not going to sit by idly while the government steals more to accomplish less. Do not be surprised if more of America’s wealthiest individuals decide that they’ve had enough and go off to warmer climates and less taxes.

1 comment:

  1. you might see JoePa for POTUS in the group--not that I'm rich, but....