Reduce your tax burden

November 18, 2014 

Sovereign Valley Farm, Chile

When the two young petty thieves, Rinconete and Cortadillo, came to Seville they were quickly censured for stealing.

To their surprise, it wasn’t for the theft itself, but instead because they were not registered with the local thieves’ guild.

In this upside-down world imagined by Miguel Cervantes, theft was not a crime, but a craft—performed in the name of God and justice.

And like any other craftsmen of the day, the thieves had formed a guild. There they provided training and support to their members, while maintaining an exclusive right to engage in the trade.

This past month, a real-life guild of thieves was formed. With 51 governments pledging their support to each other for the protection of their ignoble craft of theft. And another 30 pledging to join by 2018.

From day one, governments have been pilfering their citizens’ assets through taxation, claiming a monopoly on thievery.

From the largest institution to the pettiest pickpocket, anyone else who tries to engage in theft is severely punished, as governments work to protect their exclusive right to steal.

Frighteningly, they do this all out in the open, believing that they actually have a moral right to commit theft.

You can see this delusion in the US government’s claims that last year they “lost out” on $337 billion from people avoiding taxes. As if they have some moral claim to the money they’d failed to pilfer.

Nonetheless, they use this claim to justify actively hunting down and penalizing anyone who takes action to avoid being stolen from.

The ones that are doing this are the bankrupt countries, and the deeper they slide into debt, the more desperate they become.

Which is why these broke governments are now joining forces, pledging to to collect and share information amongst themselves about citizens’ bank accounts, taxes, assets and income outside local tax jurisdictions.

Basically—I’ll help you steal from your citizens if you help me steal from mine.

Both the punishment and the likelihood of getting caught for tax evasion are growing. Don’t even bother trying.

However that doesn’t mean that you have no choice but to sit there and let your self be stolen from.

While there are still ways of legally reducing your tax burden from within a country, your best option is to move and diversify.

Diversification is key, because if you have all your eggs in one bankrupt basket, you are really taking on extraordinary risk.

Moving some assets abroad can legitimately reduce some of this risk. And an even greater strategy is considering moving yourself.

Citizens of most countries have the benefit of divorcing themselves from the tax system simply by moving abroad.

It’s a bit more onerous for US citizens. But for Americans living abroad, it’s still possible to earn roughly $100,000 without paying income tax.

In fact, between the Foreign Earned Income Exclusion, Foreign Housing Exclusion, SEP IRA contributions, and more, an American couple can sock away roughly $300,000 per year while paying almost zero income tax.

And if you become a resident of Puerto Rico (which any American can do), it’s possibly to completely eliminate US federal income tax on any amount of money.

By doing so, not only are you taking yourself out of the reach of this gang of thieves, but you are also casting a vote with your feet.

More important than the ballot box, this is a vote that actually counts. And one you have complete control over.

(Don’t worry-- if you can’t move, there are still plenty of options to reduce your tax burden and take back your freedom. More on this in upcoming letters.)

PS. If you're looking for opportunities, you might be interested in this.

Until tomorrow, 

Simon Black 

Founder, SovereignMan.com