Episode Transcript
[00:00:04] Is home worth 15% April 25, 2026 Mayor Zoran Mandani and Governor Kathy Hochul recently proposed a new pied a terre tax on luxury secondary properties in New York City worth more than 5 million.
[00:00:20] Predictably, people are rattled. The conversation is already moving in the usual circuits Gstad, Monaco and Palm Beach.
[00:00:27] On the Bill Maher Show, George Will even said, I think every 20 years or so we need a conspicuous, confined experiment with socialism so we can crack it open again.
[00:00:37] Speaking of warm places people move to in order to avoid tax, Somerset Maughan once wrote that the Riviera was a sunny place for shady people when we lived in Monaco, Maugham used to quote him whenever yet another tasteless nouveau arrived.
[00:00:51] Style and legality aside, people move for taxes. They talk about it at dinners in hushed tones, yet speak loudly about government overspending. To clarify, if you're American, moving to Monaco doesn't solve your problem. The United States taxes its citizens on worldwide income. No matter where you live, there's no avoiding that federal tax, unlike the Europeans and Brits, who can truly avoid 100% tax by living in places like Monaco, Bermuda, Bahamas or Dubai. I know such European tax exiles who are constantly on the move.
[00:01:23] They seem unhappy to me.
[00:01:25] Last year I wrote a letter to a friend titled the Trappings of Mobility When Freedom Becomes Flight. I mentioned a Swiss lawyer who told me about his saddest client, someone who isn't officially domiciled anywhere. He lives a transient life, never staying in one country long enough to trigger residency requirements. The lawyer said this client was wealthy in assets but impoverished in community and belonging to.
[00:01:51] The only taxes Americans can avoid are the ones levied by local and state governments. To actually escape federal tax, you'd have to resign your citizenship. And before you walk out, the IRS would present you with an exit tax, a bill calculated as if you sold every asset you own on that exact day.
[00:02:09] I've been tempted, but who would I be without that passport right now? I like being Swiss and American.
[00:02:16] This means the grand tax escape most wealthy Americans are actually talking about is New York to Florida. Spend 183 days south of the Mason Dixon Line, change your driver's license. Join a golf club in Palm beach. Save yourself a New York state and city tax, which can run close to 15% combined.
[00:02:35] It's not Monaco, it's Boca. So what does 15% actually buy if you decide to stay? Not having to deal with a New York City audit. New York tax officials are pretty good at figuring out where your center of Life really is. They trace phone calls and where you spend your money. I heard they even find out where your dog sleeps.
[00:02:54] Another important benefit of staying put. You get to hang out with your friends who knew you before money became so important to you. You stay connected to your clubs and to your meetings if you're in recovery, if you practice a martial art, you stay in the dojo where your sensei knows you well.
[00:03:11] You stay connected to the neighborhood where your kids grew up.
[00:03:14] You get to stick with your doctor who has kept you alive until now.
[00:03:19] You support the city that shaped you. You can also feel like you're at the center of something.
[00:03:24] It's not stuff you can put a true value on. It's not a line item on your budget.
[00:03:30] Letting 15% dictate your life is like letting the dog's tail wag the dog.
[00:03:34] That's the opposite of stewardship and the ruggedness that was needed to create this country.
[00:03:39] William Penn's original conditions for granting land to colonists was that all tracts of land must be settled within three years of purchase or they could be offered to another buyer. You couldn't just buy the land. You had to physically be there. You had to build something.
[00:03:56] This is part of the original American contract. You had to be rooted to have rights. The colonists didn't just live on the land, they built something on it. They cleared it and farmed it. The obligation to pay came from the act of building and of being rooted, of having skin in the game.
[00:04:11] Hernando De Soto said that assets only create value when they're embedded in a living system.
[00:04:16] Wealth stored in tax haven, whether Dubai, the Bahamas or an empty Manhattan penthouse is dead capital. It's just expensive storage.
[00:04:26] Don't get me wrong, a 15% tax rate is real money.
[00:04:30] I'm not dismissing it for someone with significant income. It can be life changing savings over a decade. Legal tax strategy is responsible. There's nothing wrong with a thoughtful change of domicile incorporating factors like family, weather, safety and health. And if taxes start to cut into capital, then it is no longer the tail wagging the dog.
[00:04:50] The question is what your reason for wanting to move if it doesn't encompass the idea of stewardship.
[00:04:56] And within that ruggedness, moving is doomed to bring emptiness and suffering. We can't optimize away the work. That's what hollows people out. What are you going to do with the wealth that you save?
[00:05:09] The move to Florida can be an act of stewardship. It can also be an act of fear dressed up as financial planning.
[00:05:16] Only you know which one it is.
[00:05:22] If this episode landed for you, share it with someone who might need to hear it. And if you haven't already, subscribe so you don't miss what's coming. But here's the real thing. I want you to know if you're carrying something you can't talk about, if you have every resource except someone who actually understands what wealth costs. I work one on one with people like you navigating exactly that. You can reach me. Diana Oeh rli.com. thanks for listening.
