Should Peter Thiel Leave The United States?

In a recent episode of The Joe Rogan Experience, Joe Rogan and Peter Thiel had an interesting conversation about the state of the U.S. economy. Thiel, the co-founder of PayPal and a renowned venture capitalist assessed America’s financial future with no filter.  

Among other issues the U.S. faces, Thiel broke down how unsustainable the public debt is and called Social Security an “intergenerational Ponzi scheme.” As the discussion unfolded, Thiel also explained why it is hard for people in certain industries, such as tech companies, to just leave their states and move to zero-tax states like Tennessee and Florida. 

In fact, as much as he recognizes that he’s “trapped in L.A.” and can’t decide whether to “leave the State or the country,” he claims that elsewhere it’s so much worse. Now, this raises a question for Americans concerned about their financial future: Is it really worse outside the U.S., or should you leave the country altogether to find greener pastures? 

If you plan on leaving your country or at least getting a second passport or residency to mitigate risks, download your free copy of ‘Plan-B Residencies and Instant Citizenships.’

In this article, we’ll explore the reasons why leaving the U.S. might not just be a viable option but a necessary step for those looking to secure their wealth, improve their quality of life, and even gain greater global mobility.

Social security was sold as a pension system where workers contribute during their careers and later receive benefits, but in reality, the current workforce funds the social assistance benefits of others - Credit: The Joe Rogan Experience

THE STATE OF THE U.S. ECONOMY: THIEL'S PERSPECTIVE

The U.S. has recently broken debt records, reaching the $35 trillion USD threshold, putting its economy at risk. If you owe more than you earn, you are effectively broke, and you can hardly get any loans or financing to cover your debt. However, the United States has been raising the debt ceiling so much that it seems that these rules don’t apply to them. Then, Rogan wanted to ask Thiel what he would do if he were the president:

A LIBERTARIAN SOLUTION?

Shockingly, he claimed that his approach would be more libertarian-leaning, suggesting that the size of the government should decrease while the age on Social Security should increase. While Thiel prefers Trump in the upcoming election, the reality is that the Trump administration will almost certainly not go anywhere near far enough to implement these changes. Although probably effective, Thiel argued that these measures would be insanely unpopular. At the end of the day, he framed Social Security as a sort of pension (not a welfare) system, where workers contributed throughout their working years and ended up getting a pension; the reality is that the current workforce funds the Social Security benefits of people living off welfare. 

STAYING IN THE STATES

Thiel is aware that the system is, in one way or another, broken, and sometimes, he thinks whether he has to leave the state (California) or the country. Even so, he still believes that everywhere else is much worse than the States—though he jokingly mentioned the idea of moving to Costa Rica or New Zealand (he’s got a New Zealand passport). If at all, he would consider living either in Nashville or Miami due to their lack of state income tax. The question is, is it enough to move to a zero-tax state?

WHY MOVING TO ANOTHER STATE MIGHT NOT BE ENOUGH

While the idea of relocating to a zero-tax state may initially seem appealing, the United States faces broader economic and social challenges. Moving to places like Nashville and Miami might come with financial benefits, but it is not a complete shield against the systemic issues that the whole country has:

FEDERAL TAXES AND NATIONAL DEBT

Even in a zero-tax state, residents are still subject to federal income taxes of up to 37%. This alone represents a significant portion of one’s income, but that’s not everything. The state may also levy other taxes. As the U.S. debt climbs up, the likelihood of higher taxes in the near future becomes more real. If the federal government decides to raise taxes again, living in a zero-tax state does not grant immunity. The federal tax system is progressive, so many high-income earners may still pay higher rates in the future. 

ECONOMIC AND SOCIAL INSTABILITY

The increasing debt, skyrocketing inflation and economic downturns have created an uncertain environment. Another factor to consider is the devaluation of the US dollar, which may lose its status as the world reserve currency. The rise of the BRICS could be a threat not only to U.S. hegemony but also to the Western world as a whole. Additionally, certain programs, such as pensions and welfare, cannot work as expected because Social Security is running out of money. This will likely mean more future tax hikes to fund pensions and related state-run services. 

GOVERNMENT OVERREACH AND EROSION OF FREEDOMS

While some states offer more relaxed regulations and greater personal freedom, federal laws still apply all around the country. As the federal government continues to expand its reach, individuals in all states may find their freedoms increasingly curtailed, whether through new regulations, restrictions on movement, or draconian surveillance measures. These days, we’re already experiencing capital controls, and domestic unrest keeps increasing, which will probably provoke the establishment of a police state. 

REASONS TO CONSIDER LEAVING THE U.S. ALTOGETHER 

Many wealthy Americans are leaving the U.S. in droves and working on a new passport, given the political instability and the systemic problems the country is facing. They realize that the U.S. is not the safe haven it used to be, with rising taxes, increasing government encroachment and a declining quality of life. It’s just normal to seek better opportunities in places that offer financial advantages and a more stable way of life. 

ECONOMIC FREEDOM AND LOWER TAXES ABROAD

If you seek economic freedom, the U.S. doesn’t even make it in the top 10—mostly because of irresponsible government spending and budget deficits. Since this implies higher taxes down the road, freedom-minded Americans are looking into nations with more favourable tax regimes. Take Caribbean countries like St. Kitts and Nevis and Antigua and Barbuda, which have no income tax at all. There are other countries with territorial taxation, like Panama and Paraguay, where income generated outside their borders is tax-free. Establishing residency in jurisdictions like these may help minimize taxes and protect wealth more effectively. 

QUALITY OF LIFE AND POLITICAL STABILITY

Apart from taxes, it is also important to determine the lifestyle you want to live and how much it will cost. In some popular expat destinations like Colombia and Mexico, healthcare is way cheaper than in the U.S., and daily expenses tend to be more affordable as your dollar goes further. Moving abroad may also help with escaping the growing political polarization and social unrest that’s been going on. Plus, in countries with stable governments and less political discord, it is easier to enjoy a more peaceful and predictable life. 

ACCESS TO GLOBAL MARKETS AND OPPORTUNITIES

Looking beyond the confines of the U.S. will open doors for unique business opportunities. Emerging markets in Asia and Latin America offer high growth potential and are becoming increasingly attractive to savvy investors. For a fraction of the cost you would pay in the U.S., you can lock in large beachfront houses in places like Brazil, Uruguay, or Panama. In some cases, you may also qualify for a second residency after purchasing a property worth a certain amount (in Panama, investing $300,000 USD in real estate grants permanent residency).

SECOND CITIZENSHIP AND INCREASED MOBILITY

Obtaining a second passport or residency is getting political insurance, giving you an exit strategy if things get more out of control in the States. This ensures you have a safe and stable place to live if you need to leave the country quickly due to political unrest or economic collapse. Imagine that things get out of hand in the U.S., but you already have a Maltese passport to freely travel across the Schengen area and beyond, while many need to go through lengthy visa processes. That’s the beauty of second passports.

Although leaving the U.S. is undoubtedly a deeply personal decision, it can lead to a higher quality of life, increased global mobility, and even lower taxes

CONCLUSION

It’s interesting to hear wealthy Americans like Thiel talk about the idea of leaving the country. Back in the day, it was almost unthinkable as many considered the United States the land of opportunity, the freest country in the world, and a great place to live and do business. However, the unsustainable national debt, a potentially collapsing Social Security system, and increasing government overreach are making many Americans question whether staying in the U.S. is the best bet. Moving to a zero-tax state might offer some relief, but that would not address the overall issues that the entire country faces. 

While it’s true that leaving the U.S. is a very personal decision, making the move might translate into a higher quality of life, greater global mobility, and even lower taxes. The saying goes, “Don’t put your eggs in one basket,” yet many Americans do not diversify beyond the confines of the States. My American clients are aware of their country’s systemic issues, and even if they still don’t plan to leave the U.S. right away, they understand that it’s time to diversify across jurisdictions—sometimes getting a second passport or residency in return.