Stateless and fancy-free

“As most people continue to batten down the financial hatches, an elite group of the world’s ‘stateless super-rich’ is blossoming, and transcending geographical boundaries to purchase properties in major cities across the globe,” reported Tanya Powley and Lucy Warwick-Ching in April at the Financial Times. They lead “nomadic, season-driven lives [with] no strong ties to specific countries.” [Emphasis added.]

At AlterNet, Sam Pizzigatti, who linked to the FT article, explains that this practice creates

… havoc in the hotspots where the stateless super rich most often gather. Their gathering, a veritable gentrification on steroids, tends to supersize prices for all sorts of local products and services — and price out local residents. The massive mansions and apartments of the stateless super rich also exacerbate local housing shortages — and constitute as assault on any healthy sense of urban community. 

Equally troubling is their effect on their states of origin, such as the United States. Pizzigatti points out:

The number of Americans who’ve formally renounced their U.S. citizenship has jumped by over seven-fold, from 235 in 2008 to 1,780 last year. The spark for this surge in statelessness? Since 2008, U.S. tax officials have been endeavoring to clamp down more firmly on overseas tax evasion.

Between globe-trotting and globalization, U.S. super-rich and corporations see themselves as less and less grounded in the United States. Rank and file conservatives and Tea Partiers don’t get this. They believe that making a killing is not only our right as Americans — it’s in the Constitution somewhere, isn’t it? — but essential to what it means to be an American replete with the Protestant Ethic.

They don’t understand, nor did our founders anticipate, that the more flush individuals and corporations become, the less reliant they are on the United States for their continued wealth. Parking their funds offshore, their idea of patriotic duty is to leave no stone unturned in their quest to keep their money as tax-free as possible.

Much of whatever money the super-rich and corporations still spend in America is on lobbying toward that end. The well-being of a public with whom they have little interaction and the state of America’s infrastructure, services, and programs is of little concern to them. In the end, the super-rich and corporations are all too often the least patriotic of Americans.

Cross-posted from the Foreign Policy in Focus blog Focal Points.

Categories: Economy, World

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3 replies »

  1. I read that FT article when it came out. We see a fair amount of this in London, particularly in the tony areas of places like Mayfair and Knightsbridge. There are streets where virtually no one actually lives–the houses are occupied for a couple of weeks a year, and the rest of the time just empty while the owners hang out in Dubai or St Tropez or wherever. These days it’s mainly Russian money, but could just as easily be Saudi or Chinese. One thing I’ve noticed about this is that whenever there’s some sort of economic or political crisis anywhere in the world, cash somehow miraculously finds its way into London real estate.

    The tax thing for US citizens is a bit more complicated, mainly by the fact that the US is virtually the only nation in the world that requires its citizens to file with the IRS annually, even if they have never lived or worked in the US. We know people here in London who were born to US parents here, so have US as well as UK citizenship, but who have never lived or worked in the US, and never earned any US income–but still have to file annually. Since you get a credit for taxes paid here, and the tax rates, of course, are higher here, you don’t actually end up paying US tax–but you still have to file. Some of these people have given up their US citizenship, which is sort of meaningless to them in the first place because they have lived here all their lives, simply to avoid the hassle of the annual IRS filing.

  2. Welcome to Santa Fe, a town with hundreds of multi-million dollar homes which are only occupied during “opera season.”

    It was hard to blame the locals when they sold out – one guy was offered 2 million for a half-acre wood cutting lot.