Puerto Rico To Become Epic Tax Haven For U.S. Citizens?: 'The Idea Is To Turn It Into An Alternative To Singapore'

Chris | InformationLiberation

Puerto Rico is working to become one of the most serious threats to the U.S.'s taxation empire in the entire world, all because U.S. citizens per an old taxation agreement become exempt from U.S. income taxes if they become residents of the territory. Under Puerto Rico's remarkable new tax regime, U.S. citizens who become residents of Puerto Rico can potentially find themselves paying zero capital gains taxes, zero dividend taxes, zero property taxes on their new corporate residence, and a minimal 4% flat business tax on income from their business, the only catch being you have to open your business in the commonwealth and not service Puerto Ricans.

The setup is perfect for hedge fund managers, as well as software businesses and internet entrepreneurs.

The Puerto Rican government, which has slowly been abandoning its socialists ways which led it to bankruptcy, is actively perusing free-market reforms and is reportedly seeking to become "an alternative to Singapore."

Singapore is one of the most free-market tax havens in the world, but citizens of the country are not allowed to have dual citizenship, if they're U.S. citizens living there they must pay U.S. income taxes in full, and if they choose to renounce their U.S. citizenship to live there full-time they get looted like Facebook's Eduardo Saverin by the U.S.'s draconian exit tax. Puerto Rico on the other hand is completely open to U.S. citizens, and actually can exempt them from U.S. income taxes if they become residents. That means there is no need for U.S. citizens looking to lower their tax bill to give up their U.S. citizenship in order to escape the U.S.'s previously inescapable global income tax, nor to avoid the U.S.'s exit tax.

If Facebook was founded in Puerto Rico under the new laws just enacted, they'd have been able to pay almost nothing in taxes rather than having to pay an effective tax rate of 89% as they were forced to in 2012. The implications are huge, that's why the U.S. government is reportedly already looking at "bullying" the nation into backtracking on their plans according to this propaganda piece run on CNN/Fortune, they list a plurality of ways the U.S. could bully the territory into compliance, from threatening to withhold 22$ billion a year in aid, to making the territory the 51st state thereby forcing it to adopt the U.S.'s tax code.

If Puerto Ricans know what's best for them, they should reject the U.S. empire's takeover attempt and go full-bore in the direction of free market capitalism, hitching yourself to a bankrupt empire in decline is not a recipe for success.

Regardless, governments tend to be slow to react, chances are Puerto Rico could become an epic tax haven in the years to come, so pack up your surfboard and get moving!

Here's an excellent interview on Bloomberg from Puerto Rican developer and Caribbean Property Group Cofounder, Barry Breeman discussing this epic development:

See: Remarkable New Puerto Rican Law Exempts U.S. Citizens From Multitude Of Taxes

P.S.: As I discussed in my previous article on this development, I've still yet to determine whether or not you have to pay "local" income taxes under this new setup in Puerto Rico, the local income taxes are as high as 33% on incomes above $60,000 (scheduled to fall to 30% in 2016), some reports imply you do not have to pay them, the government doesn't even mention them in their report though, yet they do mention you're exempt from "federal" income taxes, so that makes me very suspicious. Those paying 39.6% in federal income taxes (plus state taxes up to 13.3%) to the U.S. would benefit from this new tax regime regardless, for those on the margins paying lower rates it's not as clear.
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Chris runs the website InformationLiberation.com, you can read more of his writings here. Follow infolib on twitter here.

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I wonder how long it will be until the U.S. invades them in the name of democracy! Wow.. this is great. I might have to move... Has Phil Michaelson been made aware of this?

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Is Gold No Longer A Safe Haven? Not According To Capital Economics: "Gold Will Surge When Euro Crisis Escalates"

[...] ? The recent sharp falls in the dollar price of gold have led some to question its status as a refuge from problems elsewhere, especially now that the US currency is strengthening across the board. However, if (or when) there is a further escalation in the crisis in the euro-zone, gold prices are still likely to surge against the dollar too.

? The price of an ounce of gold has now fallen by more than $200 from the record nominal highs above $1,900 seen earlier in the month. Since Tuesday alone, gold is down more than $100. As the price of traditionally riskier assets such as equities and industrial commodities have also fallen sharply over this period, it is tempting to conclude that gold has become another casualty of the "risk-off" trade.

? Despite this, we continue to expect gold to rise above $2,000 this year and to at least $2,500 no later than 2013. The fundamentals that support gold's status as a safe haven have not of course changed in the last few days. Above all, its value does not depend on the creditworthiness of any government or financial institution, and that may yet prove very significant in the weeks and months ahead.

? What's more, with gold prices now at previously unprecedented levels, the absolute size of daily moves are likely to be larger -- both up and down. Despite the recent falls, the gold price is still nearly $100 higher than at the start of August.

? Finally, the recent fall in the dollar price of gold primarily reflects a return of a degree of confidence in the US currency, which may not be sustained. The price in euro terms, for example, has held up a little better, which is what matters more for European investors seeking protection from the crisis in the euro-zone. (See Chart 1.) Other things being equal, a stronger dollar does imply a lower gold price when measured in dollars. This is partly because of the simple pricing effect which applies to any commodity, whereby purchasers in other currencies can afford to pay a higher price in dollars when the dollar is weak. But gold is also seen as a close substitute for the dollar as a store of value, so if there are doubts about the prospects for the US currency, gold tends to benefit disproportionately.

? The reverse appears to have happened recently. Crucially, the markets have moved on from the dispute over the US debt ceiling and the loss of the AAA rating (with S&P). The Fed's reluctance to adopt further quantitative easing has also allowed the dollar to regain some of its own safe haven status.

? Nonetheless, in the event of a disorderly Greek default, and particularly if fears of a break-up of the euro-zone really take hold, gold is still likely to benefit more than any other currency even if the dollar proves to be the best of the rest. In part this is because the upside for gold is not constrained by broader economic and policy considerations, whereas the value of the dollar (and of other national currencies such as the yen and sterling) clearly is. Confidence in the dollar is also likely to be undermined again by the fall-out from fresh euro-zone shocks on the US economy and banks. Indeed, since the global crisis began there have been several periods when the dollar has generally been strengthening and yet the price of gold in dollar terms has risen further, such as the second quarter of 2010 when concerns about Greece took off. (See Chart 2.) Although gold prices are now much higher, there is no good reason to rule out a repeat out-performance if the crisis in the euro-zone takes an even more sinister turn.[...]

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