No country for rich men
From Manhattan to Monaco, the world's wealthiest people are disconnecting into a class of stateless transients.
By Sam Pizzigati, guest columnist
Back in 1863, a short story took the American reading public by storm. Edward Everett Hale's, "The Man without a Country" told the tale of a poor treasonous soul sentenced to spend the rest of his life endlessly sailing the world in perpetual exile, as a prisoner aboard Navy warships.
Today's awesomely affluent are just as transient -- by choice.
Take Facebook co-founder Eduardo Saverin. This billionaire renounced his U.S. citizenship in 2011, a move perfectly timed to potentially save him hundreds of millions in taxes when Facebook goes public.
Saverin has plenty of company. The number of Americans who formally renounced their U.S. citizenship soared to 1,780 last year from 235 in 2008.
The spark for this surge? U.S. tax officials have been clamping down on overseas tax evasion. This bit of unpleasantness has some wealthy Americans, such as the Brazilian-born Saverin, cutting their ties to dear old Uncle Sam. They simply pay a $450 paperwork fee and an "exit tax" on unrealized capital gains, if they hold assets worth over $2 million or have paid over $151,000 to the IRS in any recent year.
But the affluent who've formally renounced their citizenship comprise just a tiny share of what the Financial Times has labeled the "stateless super rich." These uber-wealthy folks shy from the notoriety of citizenship spurned. They just live their lives as if they have no nation to call their own.
The most famous member of this stateless-by-choice community may be Nicolas Berggruen, a 52 year-old "homeless billionaire" worth over $2.3 billion who has spent the last decade hopping the world from one five-star hotel to another.
But few of the stateless super rich settle for hotel suites. Most of the vagabonding wealthy own personal residences. Lots of them. Typically, the Financial Times reported last month, a stateless super-rich household will have one or two properties in their "country of principal residence," another in London, New York, or some other "global city," a "holiday home" in a warm climate, and maybe another pad somewhere snowy.
Among the super rich, this perpetual-motion existence has become almost de rigueur, notes Jeremy Davidson, a London realtor who handles properties that run at least £10 million, the equivalent of over $16 million.
"The more money you have," explains Davidson, "the more rootless you become because everything is possible."
That rootlessness is keeping the price of luxury real estate soaring. So far this year, in Manhattan alone, four luxury co-op apartments have sold for over $30 million each, notes Crain's New York Business.
Just how many potential stateless super rich are currently roaming the world? Late last year, the Singapore-based Wealth-X consulting firm put the overall global number of people worth at least $500 million at about 4,650. These super rich together hold an estimated $6.25 trillion in assets.
That's more than enough, note urban planners, to create havoc in the hotspots where the stateless super rich most often gather. Their gentrification on steroids supersizes prices for local products and services -- and prices out local residents in the process.
The massive mansions and apartments belonging to these homeless billionaires can also exacerbate local housing shortages and constitute an assault on any healthy sense of urban community. The super rich, as they flit about, leave their properties unoccupied most of the year. The resulting emptiness, notes Columbia University sociologist Saskia Sassen, sucks the neighborhood vitality out of great urban centers.
The super rich don't notice. Or care. They have no interest in putting down roots. During their brief seasonal sojourns, they live in isolation from the greater community around them. They venture out into local public life only long enough to corrupt it with trinkets for local pols who promise to keep tax rates toothless.
The stateless protagonist in the classic short story Edward Everett Hale penned nearly 150 years ago desperately yearns to rejoin the society he so treasonously spurned. Today's stateless super rich don't figure to display any similar yearning. They're having too grand a time. At our expense.
What does it cost you or me if a billionaire flies to London? What does it cost you or me if a billionaire visits his house in Monaco? What does it cost you or me if a billionaire goes to a Broadway show?
This class warfare stuff has been a stale debating tactic for generations. Why not just come out and say that you think individuals have no right to keep what they earn? Why not just admit that you want to control the lives of others? Why not just acknowledge your shortcomings and own up to the fact that you'll never be as innovative or productive as the millionaires and billionaires that you despise?
You people make me sick. Are there not enough examples of human suffering and the massive failures of collectivist-statist ideologies? Go peddle your nonsense somewhere else...like in the communist countries that you adore so much, where everyone is so happy and free, and enjoying such a high quality of life.
According to this article these very wealthy ex-patriot now spend their many millions in other countries, creating jobs there rather than in the nation where they made their fortunes, all for the sole purpose of avoiding confiscatory tax policy in the US. Who could have seen that coming?
Maybe our current administration could learn something from this, you think. Not likely, just look at California under Jerry Brown or tune into any Obama class warfare speech.
I personally favor placing any American who revokes his/her citizenship to avoid taxes, like the Facebook billionaire who made his billions in the good old USA, to be placed on the do-not-fly list and denied entry into the good old USA.
Supreme Court Justice Oliver Wendell Holmes, Civil War veteran, said taxes are the price of civilization. We don't need free loaders. The U.S. is a great country and provides great economic opportunity, but everyone must pay taxes.
Sam Pizzigati is a shameless Marxist-Bolshevik, 21st Century style.
Who the hell do you think you are that these wealthy people owe you anything? Freedom is for everyone to pursue. This includes people you envy like the super rich. A free market includes the effects of the super rich.
Your attacks and accusations are as empty and baseless as is your article. Class warfare is for Marxist-Bolshevisks, not free Americans.
Lasse-Fare, Mr. Pizzigati, Lasse-Fare.
If I had billions I'd travel all the time too. Why not? It's not like we actually "own" property in this country anyway and It'd be better than listening to the constant complaining and red herring arguments between the political left and right. I'd also pay as little tax as I possibly could and donate my proceeds to people that I agree with who are actually trying to change things for the better unlike 95% of our current crop of ne'er-do-well politicians, pundits, reactionaries and authors like the dolt who wrote this tripe.
Being able to leave your current situation and travel is a human right as fundamental as the others. Exit taxes or some ex post facto law like the one proposed recently that try to nail people for leaving the country is just another human rights violation.
The only reason a business man closes a factory in the US and moves it to some third world dump is the cost of running that business in the US has made that business non-competitive. What that means is that business would have closed eventually anyway because it no longer made a profit. Union contracts and rules are the root cause of some of this phenomena and government regulation only adds to the cost of manufacturing in this country. Some of this is beginning to change due to cheap natural gas allowing factories to begin to operate at a profit again. So tell me, when those factories return yo the US and hire US workers, will you love those rich guys then?
We tax our corporations far more than any other government.....Than like Idiots we wonder why the leave.
To John Q.
Capitalism works EVERY SINGLE TIME IT HAS BEEN TRIED. This economic system is responsible for highest standard of living the world has ever seen. ALL first world order countries are capitalist countries. Capitalism only workrks if a society accepts meritocricy and abandons the concept of equal economic outcomes.
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