Hello everyone,
I would like some insight and advice on the following issue:
I currently live in a country that has wealth tax and plan to FIRE in the next 5/6 years.
What are your thoughts on having to support that significant tax burden while being FIRE?
For context I am attaching a screen shot of the current tax brackets for wealth tax.
That is on top of the capital gain tax associated with selling shares on a yearly basis to cover living expenses, and of course shares sold every year to cover the payment of wealth tax.
The options are:
-stay put and sorry for the expression but “bend over” and accept the tax which totally feels like a punishment for having worked, sacrificed, saved and invested
-leave to another country which entails uprooting the family with a child that will be around 10 at the time and finding a place where my partner will have to start her health business back from scratch after 15 years of being established in the town where she currently practices.
We love our place, our ocean view home, our safe town, our child’s school, our proximity to our families, our lifestyle which is by no means expensive where we live… except for that tax! Everything is pretty much perfect… except for that punishment.
Tough decision that has been keeping me up at night for the past several months.
To read the chart: say you have a 5 000 000 net worth; you would pay 31 000, that covers up to 3 200 000 and 1.7% on the difference so (5 000 000 - 3 200 000)x0.017=30 600
So in total for 5M NW the wealth tax is 31 000 + 30 600=61 600
There is a fiscal shield that says you can’t be taxed at more than 65% of your income but you also can’t reduce wealth tax by more than 80%.
I am not going to get into complicated calculations, but it is possible to somewhat reduce the tax, playing with your income but with with higher NW (10M+) it get very complicated and you can effectively be taxed at over 65% on your capital gain cumulating capital gain tax and wealth tax.
In the end it is a very vicious punitive system.
Thoughts, ideas?
Thank you!
