Saturday, December 22, 2012

Doing Business in Mexico

The Economic Disaster 
in California

Scenario: You have a business in California and feel that your overhead is too high, your employee costs are too high (based on employee costs of living) and you'd like to join the exodus of high-earners who want to leave bankrupt California for greener pastures.

Recently Democratic Gov. Jerry Brown successfully pushed a large tax increase by suggesting that high-earners must shoulder the largest burden in bailing out the state, particularly its debt-ridden public school system. It will cost you far less to send your children to private schools in Mexico.

California Facts
  • Californians are the highest-taxed residents in the US.
  • High unemployment and government debt have already sent residents fleeing in large numbers – an estimated 225,000 annually for the past 10 years.
  • The California 2012 budget deficit is projected to hit $28 billion and they want residents to pay for it.
  • Ex-Californians over the past decade have already put roughly $5.67 billion into Nevada’s economy as well as $4.96 billion into Arizona and $4.07 billion in Texas, according to Manhattan Institute study titled “The Great California Exodus: A Closer Look.”
“With high taxes and heavy regulations, it’s just difficult to produce those widgets at a lower price than somebody in, say, Texas--or in Mexico.
Syndicated columnist Walter E. Williams wrote in The Orange County Register: “California politicians can fleece people in 2012, but there’s no guarantee they can do the same in 2013 and later years. People can leave.”
With Federal Income tax poised to rocket to 46% of high earner's salaries, California rate hikes range from 9.3 percent to 10.3 percent for families making $250,000 to 10.3 percent to 13.3 percent for families making at least $1 million annually. That's 60% of your income going to tax. In Mexico, the most you pay if you're at the highest bracket is 30%. Property tax in California is almost 1000% higher than it is in Mexico.

California-based Google is using an offshore address to avoid taxes on overseas income so “wouldn’t Google millionaires also avoid state taxes on themselves if they could?”

A Mexican Alternative

A maquiladora is the Mexican term for manufacturing operations in a free trade zone where factories assemble, process or manufacture and then ship finished products to the country of origin without paying Value Added Tax (VAT). There are over one million Mexicans working in over 3,000 maquiladora manufacturing or export assembly plants in northern Mexico, producing parts and products for the United States. Mexican labor is inexpensive and courtesy of NAFTA (the North American Free Trade Agreement), taxes and custom fees are almost nonexistent, which benefit the profits of corportations. Most of these maquiladora lie within a short drive of the U.S.-Mexico border.

You don't have to sit still for all of the Obama-generated big government taxes to pay for unrestrained US Federal borrowing and wasteful California State programs. By moving to Mexico, you simply make the decision to lower your overhead by as much as 70% and your tax structure by 50%. If you want to go to the US for medical care/ObamaCare, you can always cross the border or go to private clinics staffed by US medical people who are located in Mexico. They relocate for the same reason as you can.

SAVE YOUR MONEY - Move to Mexico

Are you tired of the US Congress and the California State Legislature picking your pocket, yet?

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