One by one, countries in the Western world are unfolding their post-Covid recovery plans, and they don’t look pretty. In most cases, corporations and high-earning individuals are expected to pick up the bill for reckless government spending in the corona era. So, too, is the case for the United States, where newly elected president Biden eyes the first major tax hike since 1993. But what will this mean to you?
Pandemic-relief cost too much
Stimulus checks for virtual all Americans, whether they were employed or not, are only part of the problem. Pandemic-relief for companies, health and safety measures, and the logistics of a nationwide vaccination program have all contributed to the ever-growing federal debt.
In plans that are yet to be unveiled, the Biden administration will tackle what the Democrats argue are inequities in the tax system. This is in line with Biden’s 2020 campaign promises and will, most likely, include repealing part of Trump’s 2017 tax law that benefited corporations and wealthy individuals.
Punishment for high productivity
So what exactly will change in the tax legislation under Biden’s tenure? Well, remember that these are only rumors. It’s likely, however, that the new administration will try to do the following:
- Raising income tax for individuals making over $400,000 annually.
- Raising corporate tax from 21% to 28%.
- Reducing tax benefits for pass-through businesses, such as partnerships or limited-liability companies.
- Raising capital gains tax for individuals earning over $1 million per year.
As White House economist Heather Boushey said in a Bloomberg TV interview: “For folks at the top who’ve been able to benefit from this economy and haven’t been this hard hit, there’s room there to think about how we can raise revenue.”
In other words, those who work hard to inject money into this economy, to deliver value, and to employ fellow Americans, will be punished for their productivity. We’ll leave it up to you to decide whether that’s fair or not.
Go where your money is treated best
Business coaches, motivators, and successful entrepreneurs all agree on one thing: money is energy. It’s like a mirror that reflects the way you think about it and treat it. Take good care of your money, and it will flow to you abundantly. Squander your money, and you will live a meaningless life full of wasted opportunities.
One of the things that puts the breaks on this money flow, is living in a country with high taxes and high costs of living. You know which country we’re talking about, gringo.
And, reversely, something that will immediately increase the amount of take-home income is moving to a cheaper, low-tax place. A place where your productivity is rewarded instead of punished.
A country where your money is treated a lot better than back home.
In some (but not all) cases, this means renouncing your USA citizenship. We, of No More Tax, are happy to educate you about the possibilities and obstacles. Get in touch for a personal and discreet consult with one of our world-class tax advisors.