Taxed out: America’s high-net-worth individuals
An increasing number of America’s high-net-worth individuals are not just considering ‘interstate’ tax migration, they are thinking about ‘international’ tax migration.
Since millionaire golf-pro Phil Mickelson made his feelings public on higher taxes recently, much has been written and said about wealthy Americans considering fleeing from high tax states, such as California and New York, and relocating to low-tax states, such as Texas and Florida.
But our financial advisers have reported another significant dimension. A growing number of our wealthiest clients are seeking advice on moving their funds and themselves not only across state lines, but across national borders as fears grow over the direction of US tax policy.
Since the beginning of January 2013, there has been a 48 per cent month-on-month increase in the number of people with assets of more than $1,000,000 enquiring about permanently relocating outside the US in order to safeguard their funds.
Whilst tax hike proponents try to dismiss any notion of a tax migration phenomenon, history proves just the opposite. It’s clear: when high-net-worth individuals are taxed to perceived excessive levels, they simply move to lower tax jurisdictions – because they have the resources to do so.
It’s a phenomenon highlighted recently by the move to Singapore of Eduardo Saverin, the billionaire co-founder of Facebook, and socialite and songwriter Denise Rich renouncing her US citizenship in favour of an Austrian one and moving to London.
It’s a global trend, demonstrated by Gérard Depardieu giving up his French passport in favour of Russian nationality, and France’s richest man, luxury goods magnate Bernard Arnault, having transferred his multi-billion euro fortune to Belgium in response to Hollande’s [the French President] threat of a millionaire’s tax.
Nigel Green deVere Group
Blog written on 4th of February