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Old November 12th, 2009 #30
Alex Linder
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[from lrc blog]

Free Switzerland
Posted by Lew Rockwell on November 12, 2009 08:50 AM

Writes Heidi:

I must say, Switzerland is still more free (and better off) than most countries not because of direct democracy, but because of highly local democracy. The truth is, democracy only works within populations of under, say, 50,000 people, and only then if one is free to “vote with one’s feet” and move away to another town if one doesn’t like how things are going. High (true) literacy rates also tend to help a lot. Anyway, it also doesn’t hurt that about 75% of Swiss urban households and maybe 90% in the countryside are armed, often to the teeth. Meanwhile murder rates here are so low, statistics aren’t even kept.

There are flaws. Most Swiss are very unhappy with how things have gone downhill over the last 30 years or so and most of that is likely owing to more sway having been given to the federal government in Zurich. Switzerland is a small country and under much, ever growing pressure from places like Washington, London, and Paris because it is so dependent upon foreign trade and exchange. I can say, the Geneva of my youth was much more free than the Geneva of today. Nonetheless, having lived for long stretches in California, Texas, France, and the Middle East (and spent meaningful time in two dozen other countries throughout the world), speaking for myself, I think Switzerland is still by far and away one of the best places in the world to live. Some of my American friends call it “the world’s biggest gated community,” which cracks me up!

Did you know that the US is one of the only countries in the world that demands the payment of domestic taxes from expatriates, even if they renounce their citizenship? What’s worse, Washington has grown so desperate for hard cash lately, they’ve spun up regulations and begun enforcement actions which have, one way or another, made felons of maybe half the American business people who live outside the US. I know people who are afraid to go back, for fear of being arrested for (new) tax crimes. It’s so bad, Swiss banks have been closing the accounts of Americans because they don’t want to deal with the IRS.

Re: Free Switzerland
Posted by David Kramer on November 12, 2009 10:48 AM

I would like to make a small correction concerning something that an LRC reader wrote to Lew. The reader wrote:

“Did you know that the US is one of the only countries in the world that demands the payment of domestic taxes from expatriates, even if they renounce their citizenship?”

If a U.S. citizen who has a net worth of more than $600,000 (it may be higher now) gives up his U.S. citizenship for tax purposes, the United States government can now continue to demand taxes from the person for the first 10 years of his expatriation. This doesn’t mean that the U.S. government necessarily will do this—just that it is now within its legal rights to do this. It will, however, immediately tax them on the value of their assets at the time of their expatriation. (It can now also bar anyone who has expatriated from the United States for tax purposes from ever entering the United States again. To my knowledge, this has yet to be actually enforced on anyone.)

I also understand that the only two other countries in the past 100 years who enacted this sort of expatriation tax were Nazi Germany and the Soviet Union.



re: Free Switzerland
Posted by Thomas DiLorenzo on November 12, 2009 10:52 AM

An acquaintance of mine from Switzerland recently told me that he is in the top 1% of income earners there, and has a total tax burden of about 15%, almost all of which is local tax. Of course, he is not burdened with paying for a militaristic empire that claims to rule over the entire planet.


Canadian Shania Twain in Switzerland
Posted by David Kramer on November 12, 2009 11:54 AM

Apropos Tom’s blog about his acquaintance’s low tax rate in Switzerland, I would like to point out that most people are under the misconception that Switzerland is a tax haven vis--vis having no income taxes. On the contrary, Switzerland has income taxes—but if you are very wealthy and want to expatriate there you can negotiate with the canon you live in as to what your tax rate will be. That’s why so many rich people move there. Here is an excerpt from an interview that Canadian singer/songwriter Shania Twain did with the insufferable Larry King in which she discusses why she lives in Canada. (Keep in mind that Canada, unlike the United States, does not charge its citizens income tax on any money they earn while they live outside of Canada. As an example, a Canadian citizen living in tax-free Monaco would owe zero income taxes to Canada if he made his living as a doctor in Monaco.)