Obama's proposal to crack down on U.S. tax evaders who turn to offshore accounts is getting a lot of attention, much of it, as expected, negative.
But we here in the United States aren't the only ones who are unhappy with our tax burdens and seek relief elsewhere.
All the highly exorbitantly paid Formula 1 drivers live in European tax haven countries, such as Monaco or Switzerland.
The lure of Alpine chalets and low taxes also has enticed British and French singers to move there, at least briefly.
On the business side, the Rolling Stones and U2 definitely took tax taxes into consideration when hiring money managers.
And most recently, British star Michael Caine has made it clear that he thinks things are actually better, tax-wise, in the U.S. "The government has taken tax up to 50 percent, and if it goes to 51, I will be back in America," the Academy Award winner told The Telegraph.
The value of taxes: But what Sir Michael didn't address was what that higher UK tax rate gets him and his fellow citizens. According to a recent study by Mercer, the human resources subsidiary of Marsh & McLennan Companies, high tax rates are not necessarily drawbacks.
In fact, they can contribute to amenities that make living in highly-taxed locales very appealing.
The study compared the quality of life in 215 cities
worldwide. It was designed to help global governments and companies address issues involved in international personnel assignments.
Qualify of life: In evaluating a place's qualify of life, the study took into consideration such
factors as political stability, available banking services, health and
sanitation, schools and education, housing and climate. New York was the base with a score of 100 and cities were scored against it accordingly.
Taxes weren't listed by Mercer as one of the factors evaluated in the study,
but cities in notoriously high-tax European countries dominate the top
of the ranking.
Vienna was deemed the city with the best quality of life, achieving the highest rating of 108.6.
The top North American city is Vancouver, B.C., which tied for fourth with Auckland, New Zealand. In fact, the top five cities in the Americas are in Canada. In addition to Vancouver, Toronto came in 15th, Ottaw 16th, Montreal 22nd and Calgary 26th.
The highest ranking U.S. locale on the 50-city list was Honolulu (duh!) coming in 28th. San Francisco was on its heels at 29th. Boston came in at 36th,
Portland at 42nd, Washington, D.C. and Chicago tied at 44th, New York City at 49th and Seattle squeaked under the wire, coming in 50th.
Infrastructure issues: Mercer also ranked cities with the best infrastructure, based on electricity supply, water
availability, telephone and mail services, public transport provision,
traffic congestion and the range of international flights from local
airports.
Singapore was the top city in this category.
FYI, Sir Michael, London tied for 8th when it comes to infrastructure and was 38th in overall quality of living.
And where do you definitely not want to live? Baghdad, with a score of 14.4.
Quality costs: What's the common denominator in all the preferred locales, at least those here in the U.S.? It costs a lot, not just in taxes, but in day-to-day expenses to enjoy living there.
I will agree, though, that Washington, D.C., for all the bad press it gets — due in large part as home of our nation's tax architects — is a pretty cool place to live.
The city's history, both past and currently being made, not to mention the free access to some great federally supported museums is fantastic. And despite the penchant of late to build monuments all over the impressive Mall, there's a decent amount of open space.
Of course, housing costs still are high there. And it definitely has its share of taxes.
But Mercer European spokesman Slagin Parakatil says that tax rates usually don't affect a company's decision when it comes to sending personnel abroad. "I don’t think tax would be an issue," he told The Guardian. "If you need to send
someone, you will definitely send someone, no matter whether the tax
regime is high or not."
Some tax relief for U.S. expats: Although under the U.S. tax system, the worldwide income of any citizen or resident
alien is subject to tax, if you are sent abroad by your employer, you do get a tiny bit of tax relief.
You can exclude at least some of your foreign income from U.S. taxes, and you might be able to get some relief in connection with your housing costs.
Get the details in Taxpayers abroad can limit U.S. taxes.
