It sounds like a plot from a spy novel, but it is real. Rich Americans are quietly buying second passports and lining up residency in other countries.
The ultrawealthy are not planning to flee tomorrow. They are buying insurance.
Lawyer David Lesperance, who counsels affluent families on tax and citizenship matters, explained, "There's a more than zero percent chance that a wildfire will hit. "So wouldn't you spend a little bit of time, effort, and money getting fire insurance and a fire escape plan, hoping you never use it"?"
The fear driving these moves is the growing support for wealth taxes in the US. A proposed ballot initiative in California aims to impose a single 5% levy on the state's billionaires. That is not a routine income tax.
It is a direct hit on accumulated wealth. Federal proposals have also been floated, including one from Senator Bernie Sanders and Representative Ro Khanna, though that version is unlikely to pass anytime soon.
Outgoing California Governor Gavin Newsom opposes the state measure. He argues that taxing big fortunes should be handled at the national level. But the measure is on the ballot regardless, and the richest people in the state are not waiting to see what happens.
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There is no single path to a backup passport. The options range from cheap and fast to expensive and slow.
Some Caribbean nations, like Saint Kitts and Nevis, offer citizenship for investments of up to $250,000. That is pocket change for billionaires. On the other end, for New Zealand's golden visa, the required investment is about $3 million in US currency. Greener Pastures New Zealand's managing director, Dominic Jones, says his clients seek this for various reasons, including wealth protection and concerns about the political climate at home.
But many wealthy people are running two tracks at once. The faster option is an investment-based visa. The slower, cheaper option is citizenship by descent.
Over 50 countries offer that, including Greece, Poland, Italy, and Germany. You apply based on your ancestry and wait. In the meantime, the investment visa gets you out the door quickly if needed.
Lesperance says most of these clients will never actually leave for good. Once someone gets an Irish passport, he notes, the Saint Kitts and Nevis passport sits in a drawer collecting dust. But having it is the point.
This is not just gossip about the super-rich. It is a signal about the direction of tax policy in the US.
Each year, over 120,000 investment-based citizenships and visas are granted globally, Dominic Jones reports. The demand from Americans has surged so fast that Henley & Partners saw inquiries increase by 183% in just one year. That is not a niche trend. It suggests that the wealthy are taking the threat of wealth taxes seriously, even if the federal version is a long shot.
The bottom line: If the people with the most resources are hedging against political and tax risk, it is worth paying attention to the same risks on a smaller scale. State-level tax changes, like California's ballot measure, can affect where people choose to live and invest. And when the wealthy move money, it often has ripple effects on local economies and housing markets.
For the rest of us, the story is less about buying a passport and more about understanding the landscape. These moves are a reminder that financial planning is not just about picking stocks. It is also about watching the policies that could change the rules of the game.
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