What the Media Won’t Tell You About Taxes Abroad

I’ve been writing about investment and global diversification for a long time now.

And the “story” that a lot of writers in this space tell is not the whole story…

There’s a certain “narrative” that shapes how people like me (writers) present the big issues… but it’s flawed.

In short: There’s a disconnect between what the media wants to talk about and what ordinary people need to know. 

You see, there’s a global industry built around what it calls “investment migration.”

The target market is ultra-high net worth individuals, or UHNWIs.

The assumption is that such people are primarily motivated by (a) the desire to avoid taxation, and/or (b) evade the travel obstacles associated with the passports of their countries of birth.

Consider the second issue.

It’s true that most people who get citizenship by investment (CBI) have no interest in becoming a citizen of another country. They just want a second passport.

But because most people—and some powerful governments, like the US and the European Union—are uncomfortable with that, the investment migration industry bends over backward to try to justify CBI as a “human right.”

The obsession with trying to protect the revenue streams from helping UHNWIs from dodgy countries get into Europe shapes the narrative of the whole industry…

But most ordinary people who come to this arena don’t want a second passport just to get visa-free travel to Europe (if you have a US or Canadian passport, you already have visa-free travel to the EU).

If they seek a second citizenship, it’s because they want to create options for themselves.

Sometimes it’s pull factors, like the desire to live in some place cheap, beautiful, and peaceful.

Or it’s push factors, like concerns that the US is becoming both ungovernable and unaffordable…

Most often, both.

Such people don’t just want a passport. They want a second home, a Plan B, a new life.

Then there’s the tax issue.

The investment migration industry is obsessed with the idea that everyone’s goal is to avoid as much tax as possible. “Taxation is theft,” as the saying goes.

And, look, I dislike paying taxes as much as anyone.

But I’ve spent my entire adult life studying public affairs in one way or another…

When it comes to taxes, my conclusion is that if you live in the right country, you’ll get what you pay for, and then some. You just need to run the numbers.

The truth is that when you consider overall cost of living, and what you get for your taxes—even if you end up paying a higher tax rate abroad, you can still save a bunch compared to life back home…

Over the last several weeks I’ve been consulting with members of my Global Citizen service who took advantage of my offer to meet one on one to discuss their interests and future plans for global diversification.

And sure enough—most think about the tax implications of moving abroad.

Then I tell them, “Run the numbers.”

Let’s say you’re going to move to Portugal. The country has higher marginal tax rates than the US for every income level. A couple in a 20% bracket in the US might end up owing Portugal 30%.

Let’s assume just for the moment that you will actually end up paying more in taxes than you do back home…

Look what you get for that extra 10%.

The cost of housing in a beach town just south of Lisbon is 63% less than it would be in most major American cities. Food—invariably fresher and healthier than in the US—is 52% less. Dining out is between 55% and 70% less. Your cellphone bill will be 70% lower. Broadband internet will be 40% less. If you decide to pay for private medical care rather than go to a public clinic or hospital, medical care will cost you 33% less.

On top of that, you’ll enjoy quality public services, and a country that ranks as the seventh most peaceful and safest in the world.

When it comes to taxes, just like everything else in life, you have to consider “bang for your buck.”

I’ve designed my Global Citizen service for real people in the real world.

If you come to me asking about foreign taxes… I’ll certainly help you get the best deal you possibly can.

But I’m also gonna run the numbers with you… and give you the whole story.