On the Cost of Living in a Country with a High Tax Burden and the Immorality of Paying Taxes

Following our previous article, where we informed you about the advantages you can experience as a Perpetual Traveler, today we intend to shift our focus to another significant aspect: the ethical and philosophical standpoint. Additionally, we aim to provide you with a transparent illustration of the cost you are incurring to sustain your current lifestyle.

Living Stateless, achieving freedom from the chains that States want to place on us is the objective of our blog. However, the route we propose here at Denationalize.me to obtain that freedom is not violent revolution, nor is it ignoring States or disposing of your nationality.

Contrarily, we recommend familiarizing oneself with the “adversary” and utilizing their traits to achieve maximum freedom. This may appear contradictory initially, hence we would like to provide an explanation.

But let us start from the beginning.

For us, at Denationalize.me, to stop paying taxes is not simply a question of taste or profits, but also a moral issue as you can read about in our critique of the State.

Thinking without borders is the essence of living denationalized. It involves distancing ourselves from paternalistic and authoritarian figures and assuming greater control over our own lives. Freedom and independence are crucial when it comes to this matter.

Denationalize.me is not a goal, but a process. Living denationalized means becoming aware of and taking responsibility of our own actions and living life according to our beliefs. Denationalize.me is in this sense synonymous with “being ownerless”.

As we explained in another article on our blog entitled ‘A life without the State: the Tax Free Today paradox’, we believe that living Stateless does not mean living without rights, but putting one’s own rights above the (local) obligations that States impose upon us. It requires choosing which of the many States in the world best match up with your way of living and seeing the world (this is something we discussed long ago in our article about Flag Theory).

Ending one’s existence under the control of the government is a challenging endeavor that necessitates alterations in our lifestyle and perspective. However, if Denationalize.me has accomplished this feat, so can you, just like Adrián who has a total of four offspring.

Bear in mind that each quarter there are hundreds of people in every kind of situation who leave their personal tax hell and with our help, change their residence.

I understand that you have mapped out your entire life and it seems like there is no room for alteration. This might be because your significant other does not wish to make changes or because you have responsibilities towards your children and aging parents. Nevertheless, always keep in mind that it is up to you to live your own life.

This does not imply disregarding others or refraining from making concessions. However, it does imply being the one to determine your desires and choices in life, without pondering over societal expectations or the prescribed path to happiness.

I want you to know that both staying and leaving your current home are entirely respectable decisions, and I think it is only fair that everyone is free to choose what they do and should do so while bearing in mind those around them.

However, I would encourage you to really make sure that it is what you want, before you start to convince yourself that there is no other way, because the fact that there is no other option is simply never the case.

Decide how you want to live, do not let yourself be defeated by the everyday, by inertia, by the fear of change. Decide, because if you don’t, life will decide for you and unfortunately regardless of who makes the decision, it will be you who must bear the consequences.

Some people are surprised to find that people leave their country in search of a better life, with no desire to continue supporting a system of bullshit, deceit and modern slavery in which we live.

The opposite surprises us: that there are so few people who try to escape from all this.

The sole reasoning that can be identified for this is that individuals are merely neglecting the calculations, lacking knowledge of the past, lacking understanding of human behavior, and being subject to the Law of Inertia combined with fear and opposition to change. Additionally, we are unable to overcome the powerful Stockholm Syndrome that many of us experience towards our native countries.

You live in a country with your own people, fair enough, but you work at least 40 hours a week, you are bitter about what is going on around you, you barely see your children who are more than likely being looked after by someone else because you hardly have any time to be with them.

The State, which coincidentally is funded by your money, is constantly evolving and tends to occupy and regulate all aspects of our lives. It is this State and this government, which is considered legitimate simply because its citizens vote for it once every four years, that treats you like a supposed criminal, controls everything you do, educates your children (evidently they do not trust you to) and changes the supposed social contract without any consideration, taking away more and more of what you once had with each year that passes and selling you a supposed security that, as we have seen during the Coronavirus crisis, was not even close to being real.

Are you aware that it is possible to retain all the positive aspects of your present life while eliminating all the negative ones?

Take Jorge for instance, a member of the Denationalize.me team. He has set off and left Spain with his wife and two (very) young daughters for Costa Rica. By doing this, in the blink of an eye he has left behind taxes, the requirement to wear a mask in public spaces, stress etc.

He resided in a normal apartment in Spain, and he enrolled his daughter in a public school that did not meet his expectations, but he did not wish to incur double expenses by paying for a private school in addition to the mandatory taxes for the public school. Similarly, he opted for the public healthcare system for cost reasons, despite his dissatisfaction with it.

Currently, in Costa Rica, within a mere seven days, he has successfully located a private educational institution for his daughters situated amidst a natural environment, complete with a farm, swimming pool, and other desirable amenities. This aligns perfectly with the educational vision he had harbored for his children. Additionally, he owns a residence adorned with both a swimming pool and a Jacuzzi, as well as a vehicle for transportation. The climate remains pleasant throughout the year and the people are approachable and congenial. Furthermore, he has discovered that he can lead a highly comfortable lifestyle at a comparatively lower cost than what he used to incur in Spain, all while enjoying the gratification of not having to surrender a significant portion of his income to the government.

He was able to arrive in Costa Rica without even doing a COVID test, without quarantines or complicated procedures and soon found that they roll out the red carpet for tourists over there. The only entry requirements are to have a current insurance policy that covers COVID and to fill out a form with all your health details.

Of course, Jorge is not the only one in this situation. There are many more people who have taken their first step by travelling to Costa Rica or other countries.

But let us get back to you seeing as you are still in your home country. Do you know how much it is costing you to spend more than 183 days in your country of origin?

Not too far back, we enjoyed experimenting with different online calculators and swiftly calculated the numbers for you (if you desire the precise amount deducted from you, you will need to inspect your tax returns and company financial statement). We made these calculations assuming that you are not a parent and are employed by a company (it may differ if you are self-employed or a business proprietor). However, it should be noted that these calculations were done some time ago, and it is likely that the situation has deteriorated since then (taxes typically increase, not decrease).

If you live in Mexico and are paid, for example, a gross amount of 50 thousand pesos per month (just under USD 2,500), then your finances will be as follows:

You will earn 600 thousand pesos gross per year, of which 150 thousand will go towards social security and taxes (25%), i.e. you are left with a net amount of 450 thousand pesos.

25% may not seem a lot but bear in mind that in order to receive this money, your employer will have already paid a further 144 thousand pesos.

In other words, for you to have 450 thousand pesos leftover as a resident of Mexico (USD 22,000 per year), you must have been paid 894 thousand, so that you end up paying 40% of your money (social security and taxes), leaving you with a measly USD 2,500 per month.

If you live in Argentina and earn a gross amount of 200 thousand Argentine pesos a month (around USD 2,400), you will pay:

Each month you will pay 36,565 pesos in taxes and another 27,035 in social security, so that your net income is 136,400, i.e. you have paid approximately 32% of your salary to the State. Of course, there is still the hidden amount of social security paid by the employer which ranges from 24% to 26.4%. In other words, you have been paid 248,000 (almost USD 3,000), only to receive 136,400 (USD 1,648), i.e. 45% is left on the table with a net monthly salary of USD 1,650.

If you live in Spain and earn a gross amount of 2000 euros per month (around USD 2,400), the situation is as follows:

Your gross annual salary is 24 thousand euros, of which you are left with EUR 1,600 a month after paying taxes and social security contributions. In Spain, the employer pays approximately 30% more in social security, so essentially you have had to pay EUR 2,500 to end up with EUR 1,600 per month. In this case, for earning EUR 1,940, you are leaving EUR 3,035 on the table, i.e. 36%.

Naturally, there is always a possibility for things to worsen. There are countries where even more taxes are paid, examples that our homes countries love to use to justify changing their own systems and increasing taxes.

Regardless, it is important to remember that these only pertain to income taxes. Additionally, there is the wealth tax (if one possesses sufficient funds), property tax (for real estate owners), capital gains tax (for investors), official exchange rates (for example, if residing in Argentina and converting currency into USD), council taxes, waste disposal fees, administrative taxes, co-payments, and of course, indirect taxes on nearly every purchase (specifically the well-known VAT, which is 21% in Spain and Argentina and 16% in Mexico).

Of course, contrary to what many people think, in reality VAT affects more than just you as an individual, it affects companies too, since it is money that your customer is willing to pay for what you are selling, even though the money does not go to you. The worst thing about the indirect tax that was invented (and has not stopped increasing since), is that you always have to pay it, even if you make a loss!

However, let’s redirect our attention to ourselves. As stated previously, it is not solely the 40% tax that must be paid in order to receive your monthly income of USD 2,000. Instead, this amount decreases to approximately 1,600 to 1,800 after factoring in VAT. Moreover, if you decide to invest your savings, the burden of possible losses falls solely on you. Additionally, even if your investment is profitable, the government will still be positioned to levy taxes on your earnings (15% in Argentina, 10-25% in Mexico, and 19-23% in Spain).

And now, I repeat, you can keep everything that is good about your home country and rid yourself of all that is bad!

You can go to Cyprus, Malta, Portugal, Andorra, Panama, Costa Rica, Dominican Republic, Uruguay, Thailand, Bali (Indonesia) and many other countries that we discuss in our Denationalize.me Emigration Encyclopaedia.

But the big question, what about your children, partner or even elderly parents?

By utilizing the funds you will conserve on taxation, you have the opportunity to acquire a yacht, a portable educational institution, or any essential item they might require. Most importantly, you will have the ability to dedicate more time with them as you will only need to work half the usual hours or even less while earning an equivalent income.

With regard to your parents, you can buy them tickets to travel to come and see you and your children wherever you may be. For other relatives and friends, even without being a tax resident, you are still allowed to spend up to 5 months in your country of origin.

Naturally, ceasing to be a tax resident in your country of origin does not mean that you cannot be there at all. In fact, in the majority of cases, you would be able to continue to spend up to 5 months there every year!

How you do you go about doing all this?

You can get our video course on Flag Theory or we can help you directly plan your departure so that everything works out. If you like, we would be more than happy to help you with this via one of our consultations.

Do you still need more reasons be sure and take the step?

Take a look at these articles: we have been busy writing about the different taxes that exist and also about how the money is spent, all of which illustrated using Germany as an example. If you have still not managed to convince your family or partner that you need to be free from the chains of the State, perhaps this pleasant reading can help 🙂

I hope that the email and the articles we have linked today can help you to understand why paying taxes is NOT morally acceptable and will encourage you to start making changes.

Because your life is yours!