From: tcmay@netcom.com (Timothy C. May)
Date: Fri, 15 Jul 94 11:17:40 PDT
To: frissell@panix.com (Duncan Frissell)
Subject: Leaving the Country
In-Reply-To: <199407151701.AA09132@panix.com>
Message-ID: <199407151750.KAA21412@netcom6.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain


I'll respond briefly here to the points both Sandy S. and Duncan F.
make. Cypherpunks who are interested exclusively in RSA keylengths or
in PGP Shells will not find this interesting. In my view, discussion
of tax policies and the implications of crypto has a role on this
list.

Those who don't think so should hit "delete" now.

> At 08:19 AM 7/15/94 -0700, Sandy Sandfort wrote:
> 
> >Over the period I've been on this list, I've seen the  optimism of 
> >various Cypherpunks wax and wane.  Normally, I greatly respect Tim's 
> >opinions.  Today, though, I think Tim is reflecting an emotional response 
> >more than a factual one.

Sandy, in his original post, went on to speculate that I am just
ignorant of the methods used. I disagree. I've talked to legal folks,
have strategized with friends who are also "persons of money" (to
coin a euphemism) and there appear to be few options for me to avoid
huge tax bites except via taking some pretty severe steps, like
leaving the U.S. and not returning.

I don't dispute that no schemes exist, I just claim that they're
difficult to set up (not surprisingly, in my opinion) and that in my
situation, with assets largely in the form of stock and real estate,
there are no easy ways to convert them into tax-protected forms
while remaining in the U.S. and while not being hit with a 35-45% tax
bite. (Which I find unacceptable, for various reasons.)

I have--don't forward this to the IRS!--toyed with the idea of simply
moving to a tax haven. A problem is that the tax folks in the U.S.
have a nifty idea that expatriates (ex-patriots?!) should still file
U.S. tax returns for 10 years after departure. Enforcement may be
tough right now, but I foresee advances in networks and border
checkpoints leading to situations in which tax-haven residents are
held at entries into the U.S. on charges of tax evasion.

If this belief of mine is accurate, then leaving the U.S. could be a
one-way ticket out. Maybe I'll go this route, ultimately, but it's
certainly not an easy step to take...and not one I'm planning to take
anytime soon, and not without a hell of a lot more thinking.

(My friends in similar situations are investigating options. None look
easy to take. Sure, Justin Dart can take his marbles and move to
Belize, but his needs are different from mine. He doesn't need
Computer Literacy Bookshop, Fry's Electronics, and a network of Bay
Area friends, for example. And so on.)


Duncan Frissell goes on to write:

> Maybe Tim needs to leave the People's Republic of Kalifornia and go into
> "internal exile" in one of the United States which is less invasive.

Well, Kalifornia is not the main issue. It's max tax rate is 11%,
compared to 39-41% (as I recall) for the Feds. So my _main_ concern is
not Kalif.

(I recall Duncan resides in New Jersey. An odd choice, I would think,
given their tax rate and other peculiar laws. But I digress.)

But I agree that the time may be coming for me to leave Kalifornia.
I'd give some reasons, but many of you kind-hearted people would
denounce me as racist, so I won't. (Suffice it to say I'm not a
racist, I just believe every person and every business should be free
to choose its customers and suppliers as it sees fit....Kalifornia is
choosing to inject itself into nearly all business dealings under the
guise of "fairness" and "antidiscrimination." I also see the social
welfare system straining, with inner cities becoming cesspools of
welfare and with unskilled immigrants being dropped directly onto the
welfare rolls...a reason Kalifornia is deeply in debt and why
businesses are seeking to expand elsewhere.)

As a step short of leaving the U.S. (partly because I think that while
the U.S. gets the Net attention for its Gorewellian plans, other
countries are following suit or have already done so), I've been to
Nevada to scout out property (no state income tax, lower real estate
prices, fairly mild climate, little welfare) and plan to check out the
coastal regions of Florida (also no state income tax).


The Cypherpunks connection (if you've read this far, no one was
forcing you to, so you must have found it interesting, eh?) is that I
might even be involved someday in a true Caribbean node for a Net
connection.

(But don't expect me to move to the Turks and Caicos tomorrow!)

--Tim May


-- 
..........................................................................
Timothy C. May         | Crypto Anarchy: encryption, digital money,  
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
408-688-5409           | knowledge, reputations, information markets, 
W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^859433 | Public Key: PGP and MailSafe available.
"National borders are just speed bumps on the information superhighway."