Many readers are already well aware that the US government is essentially unique (and not in a good way) in how it treats its citizens living and working in foreign countries. No other country in the developed world imposes and effectively enforces as many burdens on its citizen abroad (and those that would do business with them) as does the US government.
Whether it is filing and paying taxes to both a foreign government and the US government, the reporting of foreign financial assets (FBAR and Form 8938), or saddling foreign financial institutions with extra compliance costs for dealing with US citizens (FATCA), among others, the root cause of these burdens is a system of citizenship-based taxation (CBT).
The US is the only developed country in the world that enforces CBT.
The rest of the developed world uses residence-based taxation (RBT), which means filing and paying taxes only in the country in which you reside (as opposed to the country of which you are a citizen).
It is critical for Americans considering internationalization to understand the difference between CBT and RBT. This two and half minute video (below) does a good job of spelling it out.
Dealing with the burdens associated with CBT is an unfortunate fact of life for Americans.
It is not likely to change in the foreseeable future. In fact, I would bet that the burdens will actually increase as the US government becomes more financially desperate. Which is a significant incentive to act sooner than later… or before it is too late altogether.
However unpleasant this reality is, it does not negate the need to internationalize.
Quite the contrary.
As spending on welfare/warfare related programs continues to rise, it is clear that the US government will sink deeper into fiscal and moral bankruptcy, with political risk increasing in tandem.
It is far better to deal with the burdens associated with internationalization than to leave your savings, your income, and yourself in range of a desperate government’s wrecking ball.
Taken together, being compliant with all the requirements can feel like navigating a confusing hedge maze with draconian consequences.
Doug Casey’s International Man and our publication, Going Global, are your trusted resources for navigating that maze to develop and implement your internationalization game plan.
It is your insurance policy against an out-of-control government and, as history has shown, can literally be a life saver when things go south.
We live in a time of great uncertainty. Any number of black swan events (economic or otherwise) are not just plausible but likely; the feeling that we are on the precipice of a new, large, and global war; and the likelihood that the US will become a full-blown police state after the next large attack are all good reasons to have such an insurance policy.
Being internationalized gives you the peace of mind of knowing that you have options at your disposal if you should ever need them.