I've been thinking about the long-term tax impact of the fiscal response of western govts to the credit crunch. Since most western govts have very large fiscal deficits to help fight the recession, I'm concerned that they'll be looking for new sources of tax revenue in the coming years. I expect that, based on the demographics of voters, govts will be looking to the younger generations to shoulder the burden of higher taxes.
I've been thinking about ways to avoid the negative impacts of higher taxes. Obviously there's not much I can do about higher income taxes other than move out of Canada. Consumption taxes don't affect me that much because my family and I live a very frugal lifestyle. But I would be severely affected by changes to investment taxes. I'm afraid that changes to capital gains taxes, RRSP limits and dividend tax rates will have significant impacts on my retirement planning (I'm 31 now with a plan to be FI by 55, which I'm still on track for).
To hedge the impacts of higher taxes in Canada and other developed countries, I've been thinking about how I can legally move money offshore to developing countries to invest in businesses or other assets that will provide an income in the local currency. That way I can create a self sustaining cashflow outside of Canada that will further diverisfy my tax liabilities.
I understand that there are many pitfalls to investing in developing countries - ownership rights, corruption, long-distance mgmt, changing laws, different taxation issues, etc. I also understand that the Canadian govt wants a piece of offshore investments. I'd like to start a discussion of these issues and see what ideas you all can come up with for keeping the taxman's hands out of my investments.
I've been thinking about ways to avoid the negative impacts of higher taxes. Obviously there's not much I can do about higher income taxes other than move out of Canada. Consumption taxes don't affect me that much because my family and I live a very frugal lifestyle. But I would be severely affected by changes to investment taxes. I'm afraid that changes to capital gains taxes, RRSP limits and dividend tax rates will have significant impacts on my retirement planning (I'm 31 now with a plan to be FI by 55, which I'm still on track for).
To hedge the impacts of higher taxes in Canada and other developed countries, I've been thinking about how I can legally move money offshore to developing countries to invest in businesses or other assets that will provide an income in the local currency. That way I can create a self sustaining cashflow outside of Canada that will further diverisfy my tax liabilities.
I understand that there are many pitfalls to investing in developing countries - ownership rights, corruption, long-distance mgmt, changing laws, different taxation issues, etc. I also understand that the Canadian govt wants a piece of offshore investments. I'd like to start a discussion of these issues and see what ideas you all can come up with for keeping the taxman's hands out of my investments.