I no longer get terribly surprised at what expats experience, but I was surprised by the headlines coming out of the Cayman Islands recently. Many people want to move to the Caymans because, among other things, there is no income tax for expats. So if you're not an American, you can live in the Caymans and pay absolutely no income tax whatsoever. If you are an American, you can avoid income taxes on the first $92,900 (as of this writing) of your income, though once you cross that threshold, you're immediately taxed on the difference at your full rate.
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This and the strict banking secrecy laws have served to turn this tiny island into the sixth largest financial center in the world. but the British government (who owns the Caymans) has directed this territory to find new sources of revenue because without taxes on expats, they're suffering a budget deficit.
|Waterfront, George Town, Grand Cayman|
Photo by Fevi Yu
I've been accused many times of not wanting to pay my fair share of taxes due to my objections to the insane US tax laws for expats, but that's mainly ignorance on the part of the accuser. I pay lots of taxes and I don't object to them. In this case, it appears that expats are objecting to paying any income tax, even one as low as 10%. Part of the controversy appears to be that the income tax is only for expats and is therefore discriminatory. Others argue that fees and other taxes are high enough to make an income tax a burden. Regardless of the truth, it tends to make expats as a whole look greedy and doesn't help our situation.