THE CONSCIOUSNESS OF AN AMERICAN EXPATRIATE
By John Schroder - September 15, 2005
About the author: John Schroder lives in the Dominican Republic and is associated with Ascot Advisory Services.
Over the years, many people have asked me: Why did you expatriate? What were your own reasons? Critics of course will sarcastically ask - Were you a failure in your previous country, and that is why you left? Or, similarly, critics may pass the comment that an expatriate is some sort of malcontent or a selfish tax-dodger.
Regardless if you are intrigued or just a bit curious as to why someone may elect to relocate to another country, there are some commonalities among most people that do decide to leave and expatriate.
Which is to say, after speaking to many of these individuals over time, many offered up similar stories or in the least, similar conclusions despite a variety of social or other kinds of backgrounds. However, I cannot of course speak for them all, and in truth each has, his or her, own reasons. But, what I can do is offer my own experiences and thought process that had lead me to my own decision.
To start off, it should be made clear that we are talking about middle class and professional people that have decided to migrate someplace else. Included in this group also are what I like to call the self-made man or woman (which in and of itself does not mean they are so-called professionals or have university degrees necessarily). In other words, education alone is not the common thread. But they do have something in common in terms of income levels AND the fact that they are independent spirited or entrepreneurial minded. In addition, it is a case of discussing people, like myself, that were living in a so-called wealthy and modern democracy and for some reason, felt like something was going wrong, or shall we say, headed in the wrong direction. So, to be more precise, the conversation surrounds individual citizens from the US, Canada, Europe, Australia, and so on that WERE (and maybe some still are) living in these respective places - who are a group of people that now want OUT. The poor people from around the world, the so-called third world and emerging market nations of course want in. So, it is a case of Trading Places. These people from the third world countries cannot fathom nor understand why anyone would want to leave the so-called wonderful wealthy country and the expatriates just shake their heads when they hear these folks in the other so-called poorer nations who say their dream is to live in America or Europe, or where ever else. The difference is that those leaving the wealthy nations have some cash and some skills. Those that are coming in to replace the expatriates leaving the wealthier nations often enough have little of either one. This is not meant to be a cruel or elitist sort of comment, but it is the truth. The question is not why are the poor people still trying to chase the so-called dream of living in a modern and wealthy country, BUT rather why are the citizens of the modern and wealthy country skipping town? Are these people crazy? Are they selfish? Are they simply concerned about the future?
Well, let me start off by giving a brief background review with regards to myself. Perhaps your own background is similar, or in the least, you can relate to some of the things I felt and started to realize over time. I started to work in the financial services industry, on Wall Street in New York City to be exact, when I was a fairly young man. I was thrown into and worked directly in the heart of capitalism you might say. I worked for a number of banks and securities brokerage firms (many are household names you will surely know), always trying to move up the ladder as my career progressed. In other words, changing jobs for higher salary and a better ranking position each time where possible. I was there for the stock market crash, excuse me - market correction, of 1987. I was there when people such as Michael Milken, Jack Welch, and many other titans of capitalism were both household names and national heroes, and I was there long after as well. You can say that politically speaking, I was a Barry Goldwater Republican, living in the comfortable ranks of the middle class, at least so I was told in terms of where I was classified by my income, according to the US government tax authorities. I had what many would consider to be an above average income, and I suppose many would have said that I had nothing to complain about. I could afford to travel and do a number of things many other people could not. I had my foot on the ladder of the so-called Middle Class American Dream I suppose. So, why should I be truly bothered if I had a lifestyle other people would want or in the least if I had it better than many others? To be sure, many people had it better than me, but then again, I had it better than a large number of other people also - so why complain?
Well, I have discovered that expatriates are not born but rather they are created over time. Which is to say, it is not the case that someone wakes up one morning from a bad nights sleep and says - I think that I will expatriate tomorrow. It does not work that way. It is a gestation process that develops over time. It is a culmination of events and experiences that at one point in time leads one to ask oneself if you are perhaps a bit odd or if there is something wrong with you - at least at first. After all, the vast majority of people seem to trudge along, accepting the sound bites and rhetoric given by politicians without further thought. Meaning, many might say or think - Yes, I am unhappy about my taxes or whatever, but it could be worse. I could be living in one of those terrible countries we hear about all the time on the national news. So, sure they gripe about taxes or about this or that, but when you touch the subject of maybe seeking out something better or different - the reply is: Are you crazy? What could be better than America? Where do you want to go - Bangladesh? Do you realize that everyone from everywhere else wants to come to America? Do you realize that everyone in the rest of the world is jealous of the American way of life?
The American way of life - What does that mean really? Well, I discovered some truths for myself, and I did not like what I found. Which is to say, my first initial gripes were about taxes to be sure. During the years of the Republican touted tax cuts (which I was enthusiastic about, like the dope that I was) of the 1980s, I slowly discovered the more I made, the less money I had. How was it possible that the government supposedly cut taxes, but me, a middle class taxpayer ended up with less? Then through some reading and investigation, I had come to realize corporate income taxes were cut, but that the middle class were left to pick up the slack.
According to AmericanProgress.Org Corporate tax receipts dropped from an average of 4.8 percent of GDP during the 1950s to 1.3 percent of GDP in FY2003. As corporate tax receipts decreased, payroll taxes, the most regressive of all taxes, increased dramatically. Specifically, payroll taxes increased from 1.6 percent of GDP in FY1950 to 6.8 percent of GDP in FY2002, surpassing both corporate income taxes and excise taxes in their contribution to total federal receipts. This rise in payroll taxes represented a 30 percent increase in the contribution of payroll taxes to overall federal revenues. At the same time, individual income taxes also increased in the past half century as both a percentage of GDP and in their relative contribution to total federal tax receipts. Individual income taxes rose from 5.8 percent of GDP in FY1950 to 8.3 percent of GDP in FY2002. The regressive nature of the Bush tax cuts has made this increase much more of a burden on middle and low-income taxpayers.
But, even better, clearer and more surprising, is the tax timeline chart put together by the Citizens for Tax Justice, highlighting US tax rates over the last 100 years. If you look at the chart, one can see that during the period of 1950 to 1964 and from 1970 to 1980, tax rates were actually dramatically much, much higher than they are today in 2005. So, why was there not a rash of Americans leaving or expatriating during these periods? If historically speaking, US taxes are statistically lower today (2005) than before, why is it that more and more middle-class people are leaving? It is really the taxes, or is it something else?
In addition, how it is possible that corporations get to influence the political process, but average middle class people are given the short end? Well, a gentleman by the name of William Greider published a book in 1992 (Touchstone Books - Simon & Schuster) titled Who Will Tell The People: The Betrayal of American Democracy - that outlines the problem. According to Greider, the average American citizen has disconnected himself or herself from the political process. In turn, the US corporations have stepped in to fill the void. That is to say, corporations have now become the major funding sources of political activism, campaigns and of individual politicians as well. But aside from that (as business has always sought out government to swing their way on issues throughout political history), corporate lobbies, law firms and other spheres of influence working on behalf of industry have become a permanent fixture in Washington. This is something fairly new and really came into being or was started in the decades following 1970. In other words, a new industry has cropped up directly for the purpose of political influence peddling, and is one that is both heavily funded plus one that is very difficult for individual citizens to counter.
In any event, despite all of the rhetoric and information reported as news (and facts) the truth is that US politicians seem to have forgotten for whom they are supposed to be working for. Industry and corporations have become the new clients of elected politicians. I know this sounds like a very liberal comment, politically speaking. In addition, I must tell you that I considered myself to be very conservative in my thoughts and political outlook previously, and on many issues, still am. But, I slowly but surely started to realize what the agenda was or would seem to be. In addition, while a staunch supporter of the free market and capitalistic economic system, it did bother me to think that government was disinterested in the rights, desires and concerns of the average individual citizen. I suppose one might say, the idea that the individual citizen no longer had a voice in the political process, and that attributes such as fairness, integrity, and ethics have completely gone out the window. So, while I still believe in LESS government, lower taxes and LESS regulation or interference in our lives, whatever laws or regulations are put into place, I also do believe they need to be (and are supposed to be) fair and equitable across the board. If the taxes of corporations are lowered, then the taxes of everyone should be lower as well - by the exact same amount. It is not fair that one group or one social class gets the cream while the rest get the sour milk. It is not supposed to work that way, or at least this is what I believe or thought America was supposed to be all about.
I had stated earlier that I figured out what the American way of life really meant or had become, and that it concerned me. This means in part that preferential tax rates and special interest politics are really a symptom and not the disease. I suppose that one could say I started to take note of the symptoms first, and there are many of them. One in particular that comes to mind is inflation and the debasement of the money supply, and how that could occur in a democracy for the people, by the people, and so on. Touching upon this theme, it is interesting to note that most Americans do NOT know that the US Central Bank, also formally known as the Federal Reserve, is a private corporation owned by other private banks and some well placed individuals. Most people also do not know that the stock of the Federal Reserve is also privately owned by some foreign interests as well (make note that with regard to the Federal Reserve: The transactions for or with a foreign central bank, government of a foreign country, or non private international financing organization are not publicly disclosed not made available for review or audit). Most Americans do think that it is a government institution, but it is not. So what - as long as it works, you might ask? Perhaps, but who is the Federal Reserve really working for and who do they answer to? It is not the government and it is surely not the American public.
There are a number of articles and information put out in the public domain that contradict what I just said, but remember equally important is how something is stated (and often what is not) more so than anything else. Here are both sides of these arguments: www.federalreserve.gov
So, what does all this have to do with why I feel something is wrong or why I feel that I had been slipping back economically? Well, I started to wonder myself. If US corporate and individual taxes were really lower TODAY than what they were in the periods 1950 to 1964 and from 1970 to 1980 - how come I feel like I have less financially? In other words, how it is possible that I make more money in salary per year than my parents or grandparents (perhaps ten times as much if not more) yet what my parents were able to do or buy seemed to be much more than myself at the moment? Why is that it now takes two incomes to afford the same kind of lifestyle one could achieve with just one family income fifty years ago? We are told that the so-called official rate of inflation is very low and has been for a very long time, the economic scenario that existed at the time of the former Carter administration aside. So, if taxes really are lower today and if it is true that the net average rate of inflation over time has been about 4 percent (or somewhere in that neighborhood), then what the heck am I doing wrong? THEY tell me everything is fine, the economy is wonderful, inflation is low, America is the greatest, etc., etc. - then why do I NOT feel like it is?
On the subject of inflation specifically, what is reported and what is reality, is a very interesting topic indeed. The Inflation Report by Michael Hodges points out the following changes in prices:
One US Dollar in 1950 will buy only 13 cents worth of goods today, 87% less than before - Inflation in my adult years (according Mr. Hodges) increased average prices 1,000% or more:
Example 1: a postage stamp in the 1950s cost 3 cents; today's cost is 37 cents - 1,233% inflation;
Example 2: a gallon of full-service gasoline cost 18 cents before; today it is $2.28 for self-service - 1,267 % inflation;
Example 3: a new house in 1959 averaged $14,900; today it's $282,300 - 1,795% inflation (+1,510% if quality-adjusted);
Example 4: a dental crown used to cost $40; today it's $740 - 1,750% inflation;
Example 5: an ice cream cone used to cost 5 cents; today its $2.50 - 4,900% inflation;
Example 6: monthly Medicare insurance premiums paid by seniors was $5.30 in 1970; its now $78.20 - 1,475% inflation;
Example: several generations ago a person worked 1.4 months per year to pay for government; he now works 5 months. And in the past, one wage-earner families lived well and built savings with minimal debt, many paying off their home and college-educating children without loans. How about today? Few citizens know that a few years ago government changed how they measure and report inflation, as if that would stop it - - but families know better when they pay their bills for food, medical costs, energy, property taxes, insurance and try to buy a house. Is inflation a threat to society?
So there you have it. Prices for many things we buy as consumers in America, including real estate, have increased exponentially over time, and in many cases more than one thousand percent. Has your salary gone up one thousand percent? If not, then now you know that you are not crazy. You DO have less, and it is not entirely taxes to blame, but rather the devaluation of the national currency - the US Dollar, that is the real culprit. And I believe it will get worse before it gets better, if at all. Today, in the year 2005, American consumers have racked up unbelievable amounts of personal debt. Why? In my opinion to try and keep up with the so-called American Dream and American Lifestyle that in reality, they can no longer afford. What amounts to a sort of national psychological denial if you like. And perhaps even worse, the government has racked up record deficits and debt as well. But the best is yet to come, as millions of people get ready to tap into the promised social security retirement benefits that the government cannot really afford either. In other words, we are told there is or was a surplus of funds put aside in this social welfare system, but where is the money?
That too has been loaned to the Federal Government and spent, with a giant IOU waiting to be paid off by the American taxpayer. So where is THAT money going to come from? If it is politically unpalatable to raise taxes, the only other option is to print more money - which means even further devaluation of the value of money or inflation, which are two terms for the same result (prices are more expensive and your money is worth less).
On the subject of morality and ethics - how is it possible that our courts and system of justice seem to offer benefits and protection to the criminals at the expense of the decent and law abiding? How is it possible someone can sue a restaurant because the coffee is too hot - and win a judgment in the process? How is possible someone can sue another individual with the reason of psychological stress resulting from a very minor car accident - and get the time of day from the courts? You think that I am making this up? I wish I were. It did not happen to me, but rather to someone I knew. A lawsuit regarding a very minor fender bender (and not much of it at that) because the supposed stress of the accident caused the woman driving to withdraw from sexual relations because of the trauma. These kinds of things go on every day in America, and no one seems to be outraged. Or, if they are, there certainly is no correction, no steering the moral ship in another direction. It continues, and gets only worse, more corrupt, and more debased with passing time.
Economics, inflation, and government stewardship of tax revenues (or lack thereof) of course is only part of the equation. As I mentioned, a moral and ethical crisis exists as well, in the courts and in the government role as advocate and moral barometer for the society. For many people, they will tell you that the answer is to stay and fight for reform. I do not believe there is much hope in this idea. The problem is too large, and the desire nonexistent among those in power, and among those that control political power, which are primarily private industry. After all, the goal of private industry is profit motive in a capitalistic society, and the goal when influencing politics is towards this end as well. I am in agreement with the free market and capitalistic system, and very much despise many forms of socialism, so please do not think this comment is coming out of left field, politically speaking.
However, the problem arises when the Guardian Shepard (government politicians) who is supposed to be guarding the hen house on behalf of the powerless chickens becomes corrupted by the very same Fox (corporations) the Shepard is meant to watch. Stated another way, a systemic brake down or corruption in the role of government and democracy. How do I know this to be true? Well, how is it possible that US corporations have steadily obtained lower tax rates and favoritism with regards to the tax code, yet net taxes for the middle class have increased? Is it just a bit too coincidental that new US military bases are propping up around the world in places where major firms, oil and oil services companies in particular, have new drilling or delivery interests? Are some of the former soviet bloc nations that have oil and natural gas reserves really a threat to US security? Or is it that the taxpayer is footing the security bill for Chevron? I have come up with my own answers to these questions, as you might imagine. In addition, these are not comments from the liberal left or a tree-hugging environmentalist either. These are comments from someone who would have bled red, white and blue many years ago or someone that considered themselves a staunch conservative as well. Did I go the other way? Did I switch over to the Democrats? Not at all - and I am in fact an equally disgusted and disenchanted with both. In addition, if you take a look at whom (Democrats or Republicans) signed the most executive orders taking away civil liberties and private property rights over time - that answer may surprise you very much as well (hint, it was not the party that has an elephant as its symbol).
So, the question is - what do you do? Some would say that the answer is to change the system from within. How do you do that? How can you do that? How do you turn the ship around or is it too late? Well, my thinking is that the only answer for long-term survival is expatriation. I see no other choice for the middle class, and their own survival.
I look at it as being similar to the situation of Rhett Butler from the famous motion picture, Gone With The Wind. If you remember the film, our friend Rhett first attempted to talk some sense into those that were quick to jump into a civil war. Rhett said, hold on a minute and think about this. The north has the men, money and most important, the industry to produce cannons and what ever else. The south is agrarian, and not suited to production of war materials. Never the less, the words of Rhett Butler went unheeded and war it was. But, Rhett of course did his part, acting as a ship captain in the southern states version of a merchant marine, bringing products from the south past the Yankee blockade to England, and the needed sales proceeds in gold from these items back home again to finance the southern war effort. But, Rhett did something else as well. Rhett Butler had his money safe and sound abroad, in England to be exact. He did not keep his assets in confederate paper money, which we all know become worthless quite quickly once the war was over. He did not keep his assets in gold in local southern banks, which were all eventually ransacked by the invading northern armies as well. No, Rhett has all his assets, gold, whatever safely tucked away abroad. So, if you remember the outcome of the film, our hero Rhett did indeed eventually return home a wealthy man, as the result of having his assets safely out of the line of fire, so to speak. On the other hand, he was also a patriot, serving his country even though he believed the war effort to be futile for the long haul.
I mention this story because I think this is probably the largest problem many Americans have. Which is to say, how to reconcile the thoughts about patriotism, self-preservation and the possible philosophical or emotional angst that can result between the two. If you leave to live in another country, for your own self-preservation and benefit (economically and otherwise), there are many who would call you a traitor, a tax dodger, and selfish malcontent or even just plain crazy. On the other hand, if you stay, you might end up broke or worse, placing the long-term welfare of your family and yourself in jeopardy. So, what do you do?
For me, the choice was obvious, especially after I had come to the conclusion the politicians have no interest in fixing the problems that surely will arrive. For yourself, you may still have some soul searching to do, and after all is said and done - you may even decide that expatriation is not the answer for you personally. But regardless, my advice is read, learn, investigate and best of all travel. See what is really going on in other countries and other places. Make up your own mind, for yourself, and discover if some of the things you are told are in fact true - or not.
SOME OTHER INFORMATION OF INTEREST:
During the last few years America has become by far the largest debtor nation of the world. And our politicians have made their contributions with boundless generosity! John Danforth, Republican senator from Missouri, was reported in the Arizona Republic of April 21, 1992 as follows: I have never seen more senators express discontent with their jobs. ... I think the major cause is that, deep down in our hearts, we have been accomplices to doing something terrible and unforgivable to this wonderful country. Deep down in our hearts, we know that we have bankrupted America and that we have given our children a legacy of bankruptcy. ... We have defrauded our country to get ourselves elected.
Thomas Jefferson understood the danger of putting the power to control the currency of a nation in the hands of a few individuals in the form of a monopolistic central bank. This is why he opposed Alexander Hamilton's scheme to establish the First Bank of the United States. Let me repeat what he said in 1791: If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied.
President Andrew Jackson also understood the danger. He refused to renew the charter (a grant of monopoly) of the Second Bank of the United States. In 1836 Jackson said to the bankers trying to persuade him to renew their charter (so they could continue their harmful monopoly): You are a den of vipers. I intend to rout you out and by the Eternal God I will rout you out. If the people only understood the rank injustice of our money and banking system, there would be a revolution before morning.
On December 22, 1913, the day before President Woodrow Wilson signed the Federal Reserve Act, Congressman Charles A. Lindberg Sr. (father of the famous aviator) said to the House: This Act establishes the most gigantic trust (monopoly) on earth. When the President signs this bill, the invisible government by the Monetary Power will be legalized. The people may not know it immediately, but the day of reckoning is only a few years removed. The trusts (monopolies) will soon realize that they have gone too far even for their own good. The people must make a declaration of independence to relieve them-selves from the Monetary Power. This they will be able to do by taking control of Congress. Wall Streeters could not cheat us if you Senators and Representatives did not make a humbug of Congress - The greatest crime of Congress is its currency system - The worst legislative crime of the ages is perpetrated by this banking bill. The caucus and the party bosses have again operated and prevented the people from getting the benefit of their own government.