No country for rich men

From Manhattan to Monaco, the world's wealthiest people are disconnecting into a class of stateless transients.

By MSN Money Partner May 14, 2012 5:04PM

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.

 

Sam Pizzigati edits Too Much, the online weekly on excess and inequality published by the Institute for Policy Studies and distributed via OtherWords.

27Comments
May 14, 2012 10:52PM
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This article is ludicrous.  How can less than 5,000 people, globally, "suck the neighborhood vitality out of great urban centers"?  
May 16, 2012 2:32AM
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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.
May 16, 2012 3:23PM
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Your forget sammy,,,,that your left wing buddy George Soros,,,,made all his money in the US and has a residence in Monaco....guess what no Taxes...but he wants us to pay more....he got what he wanted out of this country and travels around the world ....visits the US only to complain about it and write checks to his left wing interest groups that he funds....and then runs off to the worlds best places to live and the best tax havens.....switzerland and monaco
May 15, 2012 6:29PM
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They must pay some taxes...property tax, income tax in the country they earn an income, and sales tax when they buy items.  The real shitzers are the charities that only have to spend 10% of the charities income on charity.  The charities that deduct those tickets to operas, ballets, and orchestras for the directors of the charities. 
May 14, 2012 6:36PM
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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.







May 15, 2012 4:44PM
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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. 

May 15, 2012 9:49AM
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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.

May 16, 2012 12:03PM
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Dear Sam Pizzigati; quit your socialist whining. All you do is complain about what the rich do and how much money they have. 
May 24, 2012 3:36PM
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Get rid of all income tax, which is counterproductive to begin with, and only have sales tax but don't tax necessities.  Done.  The rich will pay more because they spend more.  The poor will pay less because they spend less, and food, water, and rent isn't taxed.  Heck, even the "illegals" will "pay their fair share" under that system.

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.

May 16, 2012 7:40AM
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To "Johnq(socialist)citien,
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?

May 15, 2012 4:14PM
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They owe. Whose armed forces do you think protect these people? How about police,fireman,etc. They can't get everything for nothing. Suck the money out of a country and leave. I'm proud.
May 30, 2012 3:42PM
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We tax our corporations far more than any other government.....Than like Idiots we wonder why the leave.

Hello

May 20, 2012 6:03PM
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Maybe these tax evading billionaires should buy some of the Greek islands and declare them sovereign countries. This would help the Greeks with their financial situation, and these billionaires could declare themselves kings of their own little countries. 
May 30, 2012 3:50PM
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Just think, If you took all of the 6.25 trillion in assets held by these people it would not even pay off half of the US debt. But lets play Robin Hood and rob the rich and give it to a wasteful government and to people who want to sit on their **** waiting for a hand out. Just like Greece, Italy, France, Spain, England and all the other socialist countries. After you have run out of other peoples money the only elete are the generals and central political party members.
May 30, 2012 6:49PM
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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.

May 30, 2012 3:46PM
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I'm glad there are many rich people here in America.....Otherwise I'd feel like I live in Mexico.
May 16, 2012 10:30AM
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to william{fascist}stuart.i got the free trade speech first hand from our ceo.he started by thanking us for being part of the companies most profitable year ever.then went on to say nafta was signed yesterday so hes why your going to lose your jobs.the bottom line is  mexican labor works for a dollar an hour with no protections.when you allow free trade you open the flood gates and american jobs leave in droves.we cant compete with dollar an hour labor.the jobs will never come back.the rich care only for money.they have no alligence to country or their neighbor and deserve none from us.to get me to love the rich sir you would have to get them to care about being an american more then they love money.i dont ever see that happening
May 31, 2012 7:43AM
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Governments will never get it.....when you SPEND too much, and attempt to get the rich to subsidize your ADDICTION, you lose taxpayers! So the ROOT cause of government's problem is to address the REAL issue.......CUTS / CAPS / and BALANCES!!!!!!!! Get it?
May 24, 2012 1:48PM
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Hey Buddy, can you spare a dime.? I just love what capitalism does to everyone.
May 17, 2012 3:14PM
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Let's get this class warfare thing right:  It has always been the ultrawealthy against the rest of us--and always will be.  Teddy Roosevelt got it, why can't the rest of you rightwingnuts.  Check the facts, check history.  Can you read?  It's nothing to do with Marxism: It's everything to do with honesty, virtue, fairness and responsibility.  Why did the Roman Empire collapse?  (The ultrawealthy got too much power, over-reached, treated everyone else like dirt, got lazy, ran up the debt in foreign escapades, etc.)
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