The United States already sports an exceedingly rich people-friendly tax structure. But America’s rich have far more friendly tax models in mind. Like Singapore.
Why do the mega rich in the United States feel so put upon? Their incomes are rising, after all, and the taxes they pay have never been lower since the 1920s.
In fact, even if lawmakers in Congress passed 100 percent of President Obama’s tax plan, America’s rich would still be paying taxes at less than half the top rate that America’s richest faced back in the 1950s.
America’s wealthiest, given this ever so friendly political lay of the land, ought to be kicking back and living care-free. But that’s not happening. This election cycle appears to have America’s super rich in a feverish frenzy. They’re pouring money into the 2012 elections at all-time record rates.
What’s behind this deluge of campaign cash? A few frenzied super-rich political donors have apparently gulped the Kool-Aid of America’s delusional right wing. President Obama, these crazed deep pockets almost seem to believe, has tumbrils waiting to cart them off to the guillotines once he wins a second term.
But most of our super rich remain eminently reality-based. They know full well that the rich in other major developed nations face political challenges far more unnerving than anything that confronts deep pockets in the United States.
In France, for instance, the lawmakers elected this past spring will be taking action this September to raise the tax rate on income over 1 million euros, the equivalent of $1.24 million, from 44 to 75 percent.
The tax plan President Obama has announced, by contrast, will only hike the top-bracket U.S. rate from 35 to 39.6 percent — and no one in Congress has anything remotely close to a majority for going beyond what the President is proposing.[pullquote]Many of America’s richest see no reason why they shouldn’t be able to live in a nation that treats the ‘successful’ with as much deference as Singapore.[/pullquote]
So why do America’s super rich feel compelled to plow so many billions into politics? They already live in the most rich people-friendly developed nation in the world. What else could they possibly want? Well, they could want Singapore.
To be more precise: Many of America’s richest see no reason why they shouldn’t be able to live in a nation that treats the “successful” and their fortunes with as much respectful deference that locales like Singapore so openly display.
And just how much deference does Singapore extend to its resident rich? Last week, in a vividly detailed new paper on Singapore’s tax system, three analysts from the Deloitte global financial consulting network described how extraordinarily rich people-friendly a modern economy can be.
In Singapore, the Deloitte analysts relate, residents pay no more than 20 percent of any income dollar over $250,000 in taxes. And many income dollars over $250,000 face no tax carve-out at all — since Singapore levies no tax on capital gains, the profits from buying and selling stocks and other assets.
Singapore also doesn’t bother taxing any income that its richest residents grab from abroad, even if these residents have that income remitted into Singapore. Residents instead only face taxes on their “Singapore-source income.”
The rich who reside in Singapore don’t even have “to report their foreign bank accounts or other foreign financial assets” to Singapore’s version of the IRS.[pullquote]In 2009, 58 Americans renounced their citizenship and set up residence in Singapore. In 2010, about 100.[/pullquote]
Nor do Singapore’s wealthy have to worry about their grand fortunes shrinking once they pass on to the hereafter. Singapore hasn’t had an estate tax on the books since early in 2008.
Some Americans seem to find this total tax package that Singapore offers absolutely irresistible. In 2009, the U.S. embassy in Singapore reports, 58 Americans renounced their citizenship and set up residence in Singapore. In 2010, that total apparently hit close to 100.
Singapore certainly has its charms, but most tax break-hungry Americans of means don’t seem particularly eager to take up residence for at least 183 days a year. Their alternate endgame: bring Singapore stateside. In places like Singapore, these Americans see a vision of what the United States could become.
A vision too far-fetched? Not at all. GOP White House hopeful Mitt Romney has already pronounced his support for dropping the federal tax rate on top-bracket income down to 28 percent, a point nearly halfway from the current 35 percent top rate in the United States to Singapore’s 20 percent.
And Romney’s newly announced running mate, House Budget Committee chairman Paul Ryan, has already proposed eliminating taxes on capital gains.
America’s rich have come a long way over the past half-century. Why couldn’t they go further, to full-fledged Singapore-style status? The more important question: Will we let them?