A brief search over the Internet will expose you to different points of view. In terms of taxation, you will discover different concepts and ideas. The fact that taxation is theft is often among them – an idea that is constantly brought up as often as possible.
Sometimes, it comes with a question mark. Other times, it comes with an exclamation mark. One thing is for sure, though – this concept draws more and more attention, especially in a world where you can travel, move and do business abroad in order to reduce tax.
So, is taxation theft?
From some points of view, it is. From other points of view, it is not. At the same time, it also depends on what type of society you live in. It is definitely theft in a corrupt third-world country, but it is needed in a civilized country.
Taxes are often seen as the price we need to pay for civilization. But at the same time, if you look at your government, it looks like work is never done. There is always room for more. There is always something else to do – new political fights, people brought up, people pushed back, and so on.
Take the USA, for example. At some point, it was the only developed country out there without a governmental healthcare scheme. Obamacare kicked in, but those against the system moved their focus on different issues that needed work on.
Over the course of history, cultural pressure has become the norm. Everything that feels fair is likely to be illegal. Think about large corporation owners who fail to pay more tax for their employees to get free healthcare. Then, think about people who avoid or lower tax legally – they are also portrayed as criminals.
On the other hand, you have the average individual who goes to work, earns money, and provides for their family. They try a business, fail, try again, and so on. They save money and make plans for everything. All these categories of people float around the concept of tax.
The concept of taxation
Everyone is somehow a victim in today’s civilized society. Whether you try out a business or you have some goals, failing will be someone else’s fault. It is never your fault. It is the government’s fault or perhaps because of the high tax you need to pay.
What does it mean? No matter what you do, there is someone to blame. Now, try to picture society without high taxes. Some claim that there is no such thing as a civilized society without them. They represent the price associated with modern civilization.
Now, if you look at what is happening in the USA, more and more citizens give up their passports and citizenship for all sorts of reasons. The trend began a few years ago and reached record levels. Reasons are varied, but many of them were pushed back because of the local tax system.
Basically, people are often seen as tax evaders or criminals for having bank accounts in different countries. Americans will have to pay tax twice – in the new country of residence and the USA, even if they live and work somewhere else.
Those who gave up citizenship found the solution to a problem that had nothing to do with them. Some call them traitors. The government sees them as thousands of potential entrepreneurs deciding to move away in order to find something rational.
In western society, paying no tax is considered a crime or treason. But then, is this really the price we need to pay for a civilized world? People claiming this have probably failed to travel too far and see how some countries thrive without charging excessive taxes.
A victim’s mindset explained
No one agrees with tax – no doubt. But then, take a look at the people around you – maybe take a look at yourself too. Some of the people you hang out with are successful. You are probably just as good – earning a nice yearly income and being above the average individual.
You always complain about taxation, but then, what do you do about it? The truth is there is so much more you could do for yourself if you actually put the work in. It is all about leaving the comfort zone – nothing illegal, like tax evasion.
From ancient times to today’s society, this is probably the best time in history to make money and come up with a life based on freedom. Too many people are busy claiming that taxation is theft instead of designing new ways to reduce taxes.
Sure, some may say that hundreds or thousands of years ago, life was way easier without such taxes. Indeed, it may have been easier, but access to information, technology, and everything we know today is what makes the difference.
The truth is you are the only person in the world responsible for what you do with your life. You have everything you need to sculpt it accordingly – just like an artist, based on your vision and preferences. How many people do that? Exactly…
Whether it comes to starting a business abroad, moving your operations to another country, or getting another citizenship, the concept is fairly simple to understand. You now have a legal system to avoid tax – or at least reduce it to a minimum.
On the other hand, if you choose to sit in your parents’ basement and game all day or complain about discussion boards that taxation is theft, it is a choice you make. You can proactively change this situation for yourself (not for the actual country), but you choose to complain instead.
Sure, no one likes taxation, and we could all do with lower taxes – maybe none at all. We feel like we are being robbed – that money on your payslip that you never get to see. But at the same time, you also need roads, street lighting, police patrolling around, a medical system, and so on.
How about taking advantage of all these, but without paying a fortune? The world today needs more individuals producing – more doers, basically. That does not necessarily mean tax money because many of today’s doers choose to do things in different jurisdictions to reduce tax.
What they actually do is finding ways to solve problems – legally. Anyone can do it in today’s society.
Compare today’s society with the life half a century ago. Think about your grandparents. They went through one or two world wars. They faced loss and tragedy. They were separated when countries split, and they struggled with poverty.
Today, you can buy a smartphone and make hundreds of thousands a year. You can move to some haven country like Cyprus or Thailand and pay incredibly low taxes – go anywhere you want, do whatever you want, and make money.
Taxation is theft from other points of view, but you can avoid it. It sounds harsh, but a lot of people claim it simply fail to put in the work. On the other hand, a successful offshore entrepreneur has spent years moving here and there, assessing different countries, failing and succeeding in order to avoid tax.
Why do you have to be pragmatic? Simple – you cannot change the system. But you can avoid it. You need to find the practical solution to this issue, rather than sit down and whine about it. This is the only way forward.
Going where life treats you better
So, taxation is theft from some points of view, but what do you do about it? The idea is fairly simple – unless you live in North Korea, chances are you can travel pretty much anywhere in the world. Sure, getting to some countries is harder than others, but overall, it can be done.
The problem is that most people try to change the system, rather than their own circumstances. Forget about seeing things domestically – instead, let your mind go free. Maybe you could forget about Florida and move to Arizona instead. Taxes are lower, but there are still some taxes you need to deal with.
Take this idea a bit further then. How about the Cayman Islands? How about some islands in the Bahamas? Most people see these places as holiday spots. They fail to consider the fact that they offer little to no taxation whatsoever.
To most people, saving money is about small changes. You stop eating out – once a week, rather than three times a week. You change your accountant, or you quit some memberships. But then, nothing compares to going abroad.
When life revolves around taxation
Most people are focused on making money – we all want more from life. We all have goals and business plans in mind. But then, no one really thinks about reducing expenses too – as part of making money, of course. Taxation is one of the harshest things out there, and the good news is you can reduce it.
Thinking that taxation is theft makes sense, but you need to do something about it.
Reducing your expenses by reducing taxation will save you money and improve your quality of life.
You always look for inspiration – what happens to all those six and seven-figure entrepreneurs? Take a look at their moves. Some of them have simply stepped up out there and changed their circumstances in order to reduce taxation.
You will notice that many of them have taken up residence in different countries. Some of them have also started businesses in countries that do not make too much sense – it is all about taxation. For instance, there are entrepreneurs out there taking residence in Bulgaria and Romania.
Meanwhile, their business operations expand across the whole Europe. Some of them may even register their businesses in places like Malta or Cyprus. Exactly! It takes time, practice and research to be able to operate over so many countries, but imagine the savings.
Why pay 40% when you can pay 10%?
You can take it even further – establish a few bases in different countries, avoid becoming a tax resident in any of them and keep traveling around like a tourist. It makes perfect sense to consider the idea of having no tax residency at all – this is only a myth.
No matter where you live, you will always have to pay taxes in one country or another. Even if you travel and change your location weekly, there has to be a country where you will pay tax – unless you are stateless, of course. But then, you would not be able to travel freely.
Going offshore is about diversifying assets, reducing risk, and making money. But the list goes further than that. You can explore a new culture, feel like on holiday all the time, feel comfortable, and more importantly, become a global citizen working towards wealth.
Obtaining residency or citizenship in a second country will give you a different place to go to – a backup plan or perhaps a safety net. Imagine laws changing at home or perhaps an economic problem – in any of these cases, at least you are not stuck.
You could invest in foreign real estate, for example. But then, you will get higher yields. You can also come up with an offshore trust or a business. An offshore bank account may also protect you against litigation in your home country.
All in all, each situation is unique. Every individual out there has different circumstances. Plus, different countries have different laws and regulations. No matter where you go or what you do, there is always a solution to get treated better.
The moral profile of tax
Now, whether you establish a business abroad, move abroad or get a second citizenship, there will always be some extra voices. Some people will disagree with this concept. Basically, it is legal – you are not avoiding tax, but some say it is not moral.
Reducing the tax burden is seen as unethical. Take a look at some of the richest people in the world reducing tax by moving around or establishing businesses abroad – there is nothing wrong with that. They are hated on for their brilliant ideas, but at the end of the day, no one is bothered.
This is not necessarily a bad way to see things. However, it is short-sighted.
In fact, some of the richest people in the world are also among the most charitable business people out there. Try to see it this way. You pay less tax, so you keep your wealth. You have more control over where your money goes. This is also why some of the richest people out there also run charities or funds.
The overall idea is fairly simple to understand – go where you are treated best.
As a direct consequence, you will be able to do more of what you truly love and not less.
Taxation is theft – What next?
So, taxation is theft, then. Even if you do appreciate the roads, infrastructure, and services, the truth is sometimes, tax is too much. If you are unlucky enough to live in a country with a high level of corruption, most of the tax money goes down the drain.
No matter how you feel about taxation and theft, the world sometimes works in different ways. You will need to pay taxes either way. Some people are focused on fighting the system. Some others are about blaming those who dodge taxes. Choose whatever you want to dedicate your life to.
None of these ways is productive for your situation. There is always a better way. There are so many opportunities out there that reducing the tax burden is not even difficult. Sure, some procedures can be tricky and challenging, but overall, there are many ways to do it.
How to lighten the tax burden
Now, no matter what your beliefs are, the truth is taxation will always be a hot topic – whether it comes to offshore businesses, politics, work, or just a plain discussion with a few friends by the barbecue. Most people only whine, rather than do something about it.
Many high-tax countries tend to temporize people when it comes to business. This is why seeking countries with low tax rates or no tax at all is a popular option. More and more people move towards this trend because it is accessible and legal – why not?
So, what options do you have when it comes to taxation?
First, you can try to find countries with no income tax at all – or if it is, it must be super low.
Second, you can find countries in the territorial tax regime.
Of course, there are more considerations in the process. You need to pay attention to the banking requirements in another country, compliance requirements, or the overall reputation of new jurisdiction. All these things make the procedure much more complex.
Changing citizenship is a good idea when pushing for business growth, but you need to get used to a new environment – plus, the process takes a while. It is less likely to happen overnight. But then, many business players out there move towards tax havens – it is worth the money.
While some countries charge high taxes, some others keep them low. Then, there are also countries with no income tax at all. It sounds strange, as income tax is the main source of income in most countries. How do they manage?
Simple – there are many other sources of income that outweigh the income tax. Therefore, the income tax becomes irrelevant. For example, take Qatar and Oman – they make a fortune from the oil industry, so the income tax is irrelevant there. On the other hand, the Maldives outweigh most countries in tourism.
Top 3 countries with no income tax
Here are some interesting ideas.
Bahamas has a top-notch infrastructure and plenty of services. There is no corporate income tax. Plus, no tax is actually levied on the individual income. There is no income tax at all – it makes no difference how you make your money.
Residency is easy to obtain, too – you will most likely have to invest in real estate. Furthermore, whether you want to start a business there or you want to make an investment, there are plenty of free trade zone incentives.
Bermuda is a British Overseas Territory – a free income tax option for those interested in offshore opportunities. There is no corporate income tax, so corporations will appreciate saving a fortune. It makes no difference if you are a resident or not.
Despite being small and often overlooked, Bermuda has a great infrastructure. Its financial industry is well developed. If there is one problem with this territory, that is the fact that obtaining residence is quite expensive.
The Cayman Islands make loads of money from tourism. Therefore, there is no corporate or personal income tax. Whatever you make stays with you – simple as that. With these thoughts in mind, lots of multinational companies choose the Cayman Islands for their headquarters.
There is no such thing as a withholding tax either when it comes to interests, royalties, or dividends. Besides, you can forget about VAT tax. Direct taxes are not imposed on residents. Residency is not difficult, but you need a solid income on a yearly basis.
Here are a few other good options with little or no income tax at all:
- Saint Kitts and Nevis
ConclusionAs a short final conclusion, taxation is theft, but not always. It depends on where you live and what kind of numbers it brings in. You can whine about it, or you can try to do something about it. When working against it, the system is difficult to change, so you have to work your way around it.
The offshore industry is attractive for a wide variety of reasons, and the actual possibility to reduce taxes is one of them. More and more entrepreneurs turn to the offshore industry in order to reduce the tax burden – fortunately, while it takes time to do it by the book, it is totally worth it.