The High Road to Freedom

Many years ago, FA Hayek wrote a fascinating book entitled, "The Road to Serfdom" - in which he outlined the end result of socialist thinking (very prophetic).

That road is so well-worn now, that no one would need to ask "how to get there?"!

What is needed more urgently though, is a road to "freedom" - and, in essence, that is the primary goal of this ezine, to get you thinking about taking that particular journey.

Of course such a goal is not without competing or alternative "roads" - although they are not mutually exclusive.

Like the old Scottish song goes, "Well, I'll tak the high road and you'll tak the low road, and I'll be in Scotland afore ye..." (or something like that!)

What I want to outline here is what I believe to be the essential basics of achieving "real" personal freedom. And I'm the first to admit that such a strategy has costs, which not everyone is prepared to accept. This is one of the reasons there are various strategies to choose from - based on people's differing needs.

In a previous article I wrote, I talked about four different roads to freedom, and defined them as:

1. Untaxing - redefining one's legal tax status/tax protester
2. Disappearing - hiding one's tracks and going "underground"
3. Structuring - utilising various legal structures/shelters
4. PT - becoming a non-resident for taxpaying purposes

I also gave my preference for PT, becoming a Perpetual Traveller. And in this article I want to expand on that option - and explain why it is becoming not only more necessary - but also much easier to achieve.

The problem with the first option is I believe it's not really viable - as it depends on various interpretations of law, which in the end can be manipulated by the state. Options 2 and 3 are only "part" solutions. Sure, they will give you more freedom than you have now, and that may be all you want at this stage. But you will also be exposed to various risks. So if you want to escape the clutches of Big Brother and his henchmen to the greatest degree possible, then you have no option but to physically escape the land of your tax-slavery. In other words, cut the ties that bind you.

To many people this appears radical - and it is! It's also a remarkably simple strategy in that instead of constantly fearing "exposure" or arrest, or worrying about constant law changes that will affect your existing plans - you can live your life in peace. Something well worth the "price" of expatriating I believe.

When the PT idea was first put down on paper - by Harry Schultz and WG Hill - as a strategy worth following, the world was quite a bit different from what it is now. It was pre-911; pre-Patriot Act; pre-war on terror. In other words, the original PT strategy was conceived in a world far less burdensome than it is now.

However, there is one other BIG difference. We now have the internet. So while Big Brother has grown in power, so has our own power grown - to outwit and outmanoeuvre BB.

In fact, I would go as far as saying that because of the internet many of the obstacles to achieving a PT lifestyle have been overcome. So much so, that this option is a REAL possibility for anyone with enough desire for freedom.

Moreover, the expansion of state power has given this option a renewed sense of urgency.

What exactly is meant by PT? Well, try Perpetual Traveller; Prior Taxpayer; Possibility Thinker; Prepared Thoroughly; Post Tyranny; Permanent Tourist; or Privacy Tactician. Never have two letters contained such a wealth of options!

You can also think of it as becoming an international citizen, or a "cyber-gypsy". However you conceive it, it has just a few basic ingredients - which you can mix together into your own personal "recipe".

So what are they?

It's really a case of "globalising" yourself, and placing various parts of your life in different places.

For example: you should ideally have more than one passport - giving you more flexibility as to where you can legally reside. You should maintain your business base in a different place. You should set up your financial affairs in yet another place. You should also have a place of "residence" with little or no tax obligations - while your actual place of living (from day to day) is yet another place.

In other words you spread yourself around a bit!

With the internet it is easy to set up an offshore bank account, or an offshore business entity. And it's easy to research second citizenship options - not to mention suitable places to call "home".

All of these things have become a lot easier to achieve. You no longer have to visit some offshore bank to open an account (your briefcase stuffed with cash!). Starting an offshore corporation can be almost as easy as forming one at "home". These obstacles have largely disappeared.

And the previously biggest obstacle, how to work internationally, is now not so big - thanks to the internet.

Certainly, the most frequent question I've been asked on this subject is, "how do I work - if I'm not staying in one place? What do I do? How can I carry on my career?" All perfectly legitimate questions.

Now, I'll be straight up. This "PT" thing is NOT for everyone. But it is within the grasp of more and more people - as they find themselves capable of working in "portable" occupations.

Briefly, how you "earn a living" as a PT falls into a few different categories:

1. You can work casually - finding whatever work is available wherever you happen to be.

2. You can do the sort of work that is portable by nature - like consulting or import/export, computer programming etc.

3. You can have sufficient investments that you can live off the income produced and therefore not have to work. Or you be an active investor earning your living - and doing it from anywhere.

4. You can create internet-based income, allowing you to live and work literally anywhere you can plug in a laptop computer!

It's this last possibility that has now become a real option for any motivated individual. There are literally hundreds of ways to start earning money on the 'net - and create for yourself a "business in a suitcase".

The rapid developments in communications, internet access, financial transactions etc., have all made it much easier to literally pack up your case and go.

And what's the point of this strategy?

To become free of any particular jurisdiction - legally! Yes, this is a completely legal option. Unlike becoming a tax protester, or building complex offshore structures, or running and hiding, becoming a PT provides you with virtually tax-free status - without having to deal with Big Brother on his terms.

If you stay in a country less time than is stated by law for you to become a "taxpayer by residency", then you are in fact simply a tourist. The local bureaucrats have no interest in tourists (as long as you keep your nose clean), as you are not one of their tax-targets. In fact, as a tourist you are much more likely to be treated well.

So, the strategy is that you never stay longer in a country than the allowed period - which in many cases is 6 months. What this means is you can remain for say 180 days in one place, then move on to another. You can arrange your life around two or three favourite destinations. And if you feel the need to stay longer, well, there are even ways around that!

By becoming literally a "citizen of the world", you remain hostage to no particular country.

As a "tourist" you are looked upon favourably by the countries you visit - and why not? After all, you are spending your overseas' earned money there. You are probably also paying sales taxes of various sorts. So you are an "asset" as far as your temporary host country is concerned. You will have upgraded yourself from tax-slave status to "welcome guest" status. Way to go!

So what do you need?

Mostly, you need ATTITUDE. This is the vital ingredient - the willingness to toss aside the old and embrace the new. The determination not to be bound to your country of birth - out of some misguided "patriotism" - but to see yourself as truly a citizen of the world.

The tools are there. The strategies are known. The option is freely available. The choice is yours.

However, this strategy only applies to those people whose home country doesn't tax them when they leave and live somewhere else. And unfortunately, this doesn't include US citizens - who are still required to file tax returns (and pay taxes), no matter where in the world they reside. (Although US persons can apply for a tax exemption on overseas earnings while living overseas - up to a specified maximum amount.)

You see, the US taxes people on the basis of both residency AND citizenship - something which 99% of the rest of the world does NOT do.

For the US citizen, there is only ONE way to permanently get Uncle Sam off your back - and that's to expatriate, to rescind your US citizenship and turn in your passport. Now, this may seem like a drastic action, but more and more Americans are doing it - or seriously considering it.

You need to become a citizen of a country that doesn't tax you when you leave it. And for Americans, the ideal country is just next door - Canada.

Canada is high on the "most-favoured" list of countries to emigrate to for many different nationals - and it has a lot to offer. But for the expatriating American, what it offers is the chance to get a "first world" citizenship - which can then be used to go and live elsewhere, without having to "report back" to Canada.

In other words, Canada does not tax the world-wide income of its non-resident citizens.

Who would qualify for Canadian permanent residency? Canada operates a points system (like Australia and New Zealand - two other options), which takes into account such things as language, education, occupation etc. You can also apply under ancestry provisions. Finally, you may also be able to apply under the "special class" of investors, entrepreneurs and self-employed - where you will be required to invest a certain amount of money.

If this is a strategy that appeals, then it is necessary to get proper legal advice - as you would not want to fall into the category of "expatriating for tax avoidance purposes". For under current law, any US citizen suspected of giving up their US citizenship for the purpose of avoiding US taxes, can still be taxed on US-sourced income for up to 10 years after leaving the country!

Ah, the advantages of living in the land of the free!

Sure, this is a drastic strategy and certainly not for everyone. However, there are an increasing number of Americans who are seriously looking for an "out". And this two-step process of expatriating, taking up another citizenship, and then being free to live anywhere in the world - without your new home country's tax tentacles following you - certainly has its appeal.

For everyone else, the PT option is less painful - and more easily achievable. But like I said, you need to really WANT more practical freedom before you're likely to move out of your "comfort zone" into the wide, wide world of PT. Yes, you need a Personal Transformation!

Yours in freedom

David MacGregor