Italy calls it la dolce visa.
If you are interested in moving to Italy and you would be bringing a ton of money with you, then the Italian government has an offer that might be appealing to some very high-income expatriates: a maximum flat tax of 100,000 euros per year, irrespective of income, so long as that income is not earned by working a job in Italy. Earn 1 million euros? Pay 100,000. Earn 100 million euros? Pay 100,000. Italy here is making a bid for the sort of affluent taxpayer who might be interested in Switzerland’s “forfait” system, in which noncitizens residing in Switzerland have the option of using their annual housing expenditures rather than their income as their basis of taxation — an attractive option for thrifty billionaires.
So, depending on your taste, either Lake Como or Lake Lugano is calling. Be sure to try the lobster salad at Principe Leopoldo.
Other European countries have enacted similar policies or are considering them, and the reason for this development has a name: Jeremy Corbyn, the Jew-hating Leninist autocrat who is, incredibly enough, positioned to become the next prime minister of the United Kingdom should a Labour government come to power. Simon Clark tells the story in the Wall Street Journal under the headline “Give Us Your Rich, Europe Tells the U.K.” Italy intelligently has chosen to make the same offer to Italian expatriates who might be looking to return home from the United Kingdom or from other jurisdictions in which the leaders have not yet internalized the lesson of the golden goose. WSJ: ‘“I don’t think anyone will stay one week if Corbyn wins,’ an Italian finance executive who lives and works in London said in an interview. He declined to be identified.” He is right to be afraid — these are vindictive times.
Jeremy Corbyn has a kindred spirit in the United States currently running for the Democratic presidential nomination — two of them, in fact: Senator Bernie Sanders, an antediluvian Brooklyn red who literally honeymooned in the old Soviet Union as dissidents were being shipped off to the gulags, and Senator Elizabeth Warren, the counterfeit Cherokee princess who holds forth on “accountability” from her comfortable sinecure at Harvard Law, which once put her forward as the first “woman of color” on its faculty. The wretched old socialist from Vermont is making a good scrappy show of it — and I sincerely wish Senator Sanders the very best of health after his recent cardiac episodes — and, the times being what they are, apparently anybody can be elected president of these wobbly United States. But Warren — in spite of being a plastic banana of titanic phoniness, an ass of exceptional asininity, an intellectual mediocrity, and a terrible campaigner on top of it all — seems the more likely threat. Sanders, who cannot resist that old Soviet liquidate-the-kulaks-as-a-class rhetoric, insists that “billionaires should not exist.” Warren has a ghastly imbecilic plan for that.
The class-warfare dreams of the American Left do not have a great deal to do with their professed desire to build a Scandinavian-style welfare state here. The U.S. tax system already is much more progressive than is typical of Europe, including the Scandinavian countries, and by some measures is the most progressive in the developed world. The northern-European welfare states do not differ markedly from the United States in how they tax the wealthy; they differ in that they also tax the middle classes heavily, which the United States does not. There is in fact much about the Swedish tax regime that a billionaire might prefer: There is no inheritance tax, no gift tax, very little property tax (it is capped at about $800 a year), relatively low and straightforwardly administered business taxes, etc. Because Sweden is well-governed, it treats its tax regime as a question of revenue rather than a question of so-called social justice, which is why the inheritance and gift taxes so beloved among American class warriors were scrapped: They generated practically no revenue (about 0.2 percent of total tax income), they were difficult to administer, and they created all sorts of perverse incentives that were not in Sweden’s long-term social interest. And so it is no more: That is how intelligently administered countries do things.
But not the United States.
The basic tax situation is similar in the United States, with inheritance taxes producing barely measurable federal revenue, about one-half of 1 percent of the total. They are of very little concern to most families, but they are of intense concern to a few families with lots of property, often in the form of a business. These families will sometimes take extraordinary steps to avoid paying the tax, though many of those near the threshold for paying the estate tax stay under by relying on the simpler alternative of maxing out their allowance of tax-free gifts to children, children’s spouses, grandchildren, etc., every year for the last several decades of their lives. That won’t do much for the hectomillionaire and billionaire set, but they have options, too.
The most extreme of those is renouncing U.S. citizenship in favor of securing legal domicile in some more wealth-friendly jurisdiction. There was a boomlet of that during the Obama years, reaching a record in 2016. But it is a very small number: 5,411 in 2016, down to the numerically ironic 1,099 in 2018. Some of those former U.S. citizens renounce for reasons that have at least something to do with tax, but these decisions usually are complex and involve many factors. Tina Turner, who has been a resident of Switzerland for decades, “relinquished” her U.S. citizenship (which under U.S. law is slightly different from “renouncing” it) a few years after becoming a Swiss national. Facebook cofounder Eduardo Saverin renounced his U.S. citizenship in favor of Singapore just before the firm went public. Filmmaker John Huston died an Irishman. A common pattern is that of actor Jet Li and businessman Ted Arison, each having been born abroad (China and Israel, respectively), become a naturalized U.S. citizen, and then renouncing that citizenship later in life (Li is a citizen of Singapore, while Arison returned to Israel). Uncle Stupid imposes an “exit tax” on those who are leaving, in essence collecting whatever capital-gains tax would be due on the renouncer’s assets if they had been sold the day before renouncing. There is also a fee of $2,350, because somebody has to pay the parasites to audit your portfolio, and it’s going to be you.
But this is not good enough for Elizabeth Warren, who proposes to build a financial Berlin Wall to keep the rich guys in. That’s a little bit funny: Billionaires are awful, evil, wicked, and should not exist — but God help them if they try to grant Bernie Sanders his dearest wish and skedaddle.
We’ve seen this before.
Rich people are not stupid people.
Why would they WAIT until after a newly-voted-in President Warren installed such policies?
They would have all of November and December of 2019 plus all of the time between this policy being proposed, and passed (IF it got passed) until the day it legally takes effect to GET OUT.
And, that’s what they would do.
Even people whose businesses look like they might take off and make them rich will be hedging their plans so as to make the bulk of their cash outside the USA.
@Nan G: There are alot of ex NY in FL, reason, Taxation.
Inheritance tax is nothing more than an excuse to tax. It is conceived by those who have never worked for anything and have survived off of taxpayer largess their entire lives. It is little wonder so many Democrats support and regard it as just.
Wahoo Wigwam Warren would never see her beloved punitive measures enacted. Her Democrats would get wealthy being lobbied to oppose her stupidity and, of course, Republicans would oppose it on principle.