#1143 – Episode 1143: Home Country Bias, Tax Woes, and Expats in Latin America

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came out to play and now that I wonder Hello there all you ex-pat wannabes. I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started Alright, we're back again You know, I can instantly spot when a gringo or an expat spend down here in Latin America I'd say less than six months or even less than a year No, and it's not because they dress like typical gringos on vacation

[00:48] khaki shorts Hawaiian shirts Jesus sandals. Yeah, you see that all the time There are gringos and expats who've been down here years and years and still dressed that way No, it's not about the clothes I'm talking about another clue another way to spot a fresh green gringo has been down here less than let's say six months or even a Year, they give themselves away when you sit down and talk to them have coffee with them Whatever it's in the conversation as much as they try to appear worldly and hip with the trip This thing kind of oozes out that I call home country bias. You got that home country bias That is there forever comparing the things they do and see in Latin America to their home country Which nine times out of ten would be the US or Canada You'll hear him say things like you see that missing manhole cover over there. They'd never allow that in Philadelphia

[01:38] You see that cop car with the cracked windshield. They could never get away with that in Cleveland You see that guy juggling flaming machetes there on the corner. They'd put that guy in a straight jacket in Detroit Well, maybe they'd let him keep juggling in Detroit. Anyway, you get the point new fresh green gringos and expats Compare everything they see in Latin America to where they came from and they're pretty vocal about it But surprisingly enough after about six months or a year things like that. Just don't matter much anymore We just get used to that stuff or desensitize to it So when us long-term expats are driving around and we see a manhole without a cover It doesn't even register with us except to note we better not drive over it That's why and you'll find this out if you're living down here in Latin America for a while when you have

[02:27] Friends visiting from the states on vacation or just for a couple of weeks or something You'll end up having to explain lots of things that they've never seen before things that just don't surprise but might shock them Things that you absolutely take for granted because you've been down here long enough And it just doesn't register as out of the ordinary anymore For example, some of those huge lines outside of government buildings big lines and banks, too How about that ever disgusting toilet paper in the garbage can thing? Then there's the terrible drivers how everyone runs red lights cars and motorcycles going the wrong way down one-way streets Motorcycles taking shortcuts through sidewalks and lawns Lard-ass cops hanging around corners watching people break traffic laws and doing nothing about it Chicken bus is so packed with humanity. They seem to be busted out at the seams seasoned expats

[03:17] Don't even notice that stuff. But for newbie green gringos, it's a photo op you get the picture So anyway, that's how I can spot a newly arrived fresh green gringo or someone who's only been down here six months or even a year They've got that thing. I call home country bias, which thankfully fades the longer you're down here Though for a certain percentage of gringos and expats It doesn't fade at all It gets worse and to tell you that it's hard to be around guys and gals like that Those people are just not easy to please you know How they usually end up either going back to the states and being miserable there or living Completely on the gringo tourist trail around and with gringos in a gringo neighborhood Where there's plenty of like-minded gringos and gringos to share their irritations and complaints with because they also have a bad case of home

[04:06] Country bias. Oh, and if you're into Twitter or fake book, they're always posting their criticisms out there, too By the way, if you want to know what I think of Twitter, I've had people ask me that question a number of times I'm not on it. You know, I've never been here's the impression I get Twitter is the woke left whiny bedwetter's best media toy a lifeline for the spoiled tree-hugging paper straw sucking cafe latte crowd It's a hypocrites forum for people with iphones made by chinese slave labor A playground for toxic wokesters who never had a real job or got their soft sweaty palms dirty Who possibly never even took out the garbage? Oh, and did I mention it's a malignant cesspool of cancel culture turds. I think I did mention that No offense to any of god's creatures though. You know, I meant that in the most kindest christian sort of way

[04:57] I know some of you were waiting for me to say that weren't you? So that's my opinion and I could be wrong, but that's why i'm not on twaddle All right changing gears now an email from the stem cell poster child himself my brother And i'll paraphrase this a bit He says dear brother johnny as if I need more reasons to get the hell out of dodge Like you did so many years ago When I and the family thought you were doing something crazy. You'd gone a bit overboard a bit nuts We thought it was a crazy scheme You wanted to leave the good old us of a when everyone from every other country in the world were dying to get in Well except for maybe the french We were concerned but not really worried you'd be back in a couple of months We all thought but you weren't and we're still waiting 31 years later

[05:46] Anyway big brother i'm writing today to tell you there's been a robbery i'm calling the police I've been robbed I've been sitting at my kitchen table up here in chicago Been sitting here going over some paperwork for about five hours straight and at 2 a.m After about six or seven beers, I realized i'd been robbed a victim of blatant white collar crime You see johnny? I just finished my federal tax form and this dirty old colorful coot called uncle sam just stole another 15 grand from me So not being able to sleep knowing i'd been gouged for another 15 g's In a serial crime that happens about the same time every year. Finally. I thought i've had enough I went online in the wee hours of the morning and looked up a few things you might find interesting for your show

[06:34] about taxation in the usa For one I stumbled upon elven rabushka's book called taxation in colonial america Where it says between 1764 and 1775, you know, that was right before the american revolution american colonial taxation ran to one percent of an american colonist's total income And for that they took up arms and started a revolution Meanwhile if you'd never left england if you're a british citizen Your tax burden while living in england was 10 times heavier than those in the colonies Brits in england paid on average 10 of their income to the crown No wonder so many streamed over to the colonies like ants from a sinking ship

[07:22] The sad thing is over the past 240 something years of america's existence The slow cancer of high taxation has become part of american civilization itself Like how a person with a chronic disease gets used to it and soon they adjust everything else in their life to compensate for it In the u.s. There was no federal tax until 1913 But now in the 21st century the average american worker pays 50 or more in taxes, we pay over a hundred different taxes called levies fees licenses tools duties permits dues assessments and tariffs, etc It's good marketing not to call them taxes. That's too harsh people don't like that word tax

[08:07] But that's what they are taxes I know johnny that you have a list of a hundred taxes We all pay and don't even know it just get it in your head that every working american pays over 50 percent of his income to the government So then what do we get from our government in return for that 50 plus percent? Surely us average tax-paying joes must be reaping fantastic dividends And it's true. The u.s. Tax structure has produced gleaming showcases such as the tent cities in baltimore, detroit Cleveland, chicago, los angeles, san francisco, etc, etc And if you haven't seen one yet, they're guaranteed to pop up in your neighborhood soon Yes, it's a fact skid rows are popping up in every american city like mushrooms on a cow pie One can only wonder how much more u.s. Government sponsored urban progress america can withstand

[08:57] So brother johnny i'm writing this today because today is so-called tax freedom day april 18th That means of course since january 1st 2022 through april 18th 2022 The average american has slaved away all those days and months just for his federal government Are you happy with that? Is anyone happy with that? Did you know the united states tax code is over seven million words now? There isn't a cpa in the world that will admit to knowing even one percent of it Johnny, I think my high school history books lied when they said lincoln freed the slaves All right me johnny here. That was from my stem cell poster child brother Hmm, I think those stem cells woke up a few of his brain cells, too. That's a good thing

[09:48] By the way when he talks about the u.s. Tax code being seven million words I remember back in the 80s and ronald reagan's term When he had a press conference a big event and was standing next to a stack of documents That was taller than he was he said this is the 1982 federal tax code He said there's got to be something tragically wrong with our tax system When it would take the average cpa an entire year to just read through all this And when he was under it'd be another couple hundred thousand added pages So reagan authorized executive order 12369 on june 30th 1982 now remember that date 1982 that was 40 years ago. That's when that now famous phrase was first used. He said we're going to drain the swamp

[10:36] Yep, and we all thought trump came up with that Well, he didn't and he authorized with that executive order a private sector survey on government cost control Commonly referred to as the grace commission a guy named j. Peter grace was contracted to head it up Why him? Well, he was the perfect choice because his company were efficiency experts. That's what they did for a living They'd be hired by companies that were drowning or just about to go under His accountants and efficiency experts would go through every single department open all the books up and come out with a report A cost cutting basically a waste reduction report suggesting fat redundancy and waste cutting measures The grace company had a long history of saving companies from bankruptcy So in 1982 began the grace commission a private focus on waste and inefficiency in the u.s

[11:25] federal government with its head businessman j. Peter grace instructing the hundreds of members of that commission to be bold and work like tireless bloodhounds Not to leave a stone left unturned in their search to root out federal government redundancies and inefficiencies Funny thing too the u.s office of budget and management said no we can do that ourselves We don't want or need the grace commission. Of course, they want to do it themselves. It's that fox garden the henhouse thing But reagan was having none of it. The executive order went through it took two years and the grace commission report was presented to congress in january of 1984 The report was in depth and showed that if its recommendations were followed 424 billion would be saved in three years rising to two trillion dollars saved per year by the year 2000

[12:16] So then what happened the report's recommendations were ignored by congress by the way, the report said that one third of all income taxes are consumed by waste and Inefficiency in federal government and another one third escapes collection owing to the underground economy With two thirds of everyone's personal taxes wasted or not collected 100 of what is collected is absorbed solely by interest on the federal debt Along with federal government contributions to transfer payments like welfare in other words All individual income tax revenues are gone before one nickel is spent on the services that taxpayers expect To get from their government Now what the amazing thing is this all came out in 1984 almost 40 years ago

[13:04] And since then the federal government's malignant tax waste and spend cycle Has exploded beyond anyone could have imagined and though 40 years ago. There was a chance it could have been fixed Nowadays in 2022 it's beyond broken. It's impossible But you knew that already, right? So then how's that plan be of yours coming? By the way, a very smart gringa expat who's been living down here in latin america for four or five years now She said to me the other day that her family up in the states in california was not at all Happy about her decision to move down again. That was four or five years ago Since then she said they've been down to visit a couple of times and they can see why she left But that's not the point. The point is she said Like so many gringos and expats who made it here to latin america and stuck through the hard first couple months

[13:55] And now they're down here for good. She feels bad that she escaped and her family didn't So like many of us who've been down here a while and realized just how good life is here She has a kind of a savior complex when it comes to her own family up in the states She wants to save them because she knows when the shit really hits the fan up there They are in no way prepared Even if they call themselves preppers sooner or later and probably sooner their world will come crashing down And when she said she had a savior complex regarding her own family up in the states Man, I heard that a hundred times before people living down here and experiencing the good life want to save their families, too But they know too that they're not on board with coming to latin america because they got too many attachments too much baggage up there Believe me speaking for myself. I've got the same thing going on in my mind

[14:41] I've got a savior complex for my family. I want to save them, too But i'm also realistic and know it's never going to happen At least i'm not going to save all of them. Maybe one or two ones have been down here already You know, they'd have a soft landing and i'd have a place for them. Not all of them, but a few of them Anyway, but realistically it's not my place to save people who don't want to get saved. They've seen all the signs They've had all the warnings and still they don't listen You know when people hem and haw and say they can't leave because they got too much baggage up there or too many connections I say to them look What if you were given three days notice to get the hell out of dodge or Hunker down in your basement or in your town or city whatever because something really nasty is going to happen in three days Like for example the internet or the electric grid is going to go down completely or in three days

[15:28] The shelves will be bare at the local stores Suppose you had three days warning of that. What would you do? Well, i'll tell you what if you haven't got a plan b you'd run out to the store and buy every single item You could get your hands on right? But how long is that going to last you if the power's off for let's say two weeks a month six months? Imagine just a week without refrigeration or if it's winter time without heat How are you going to cook your food? How are you going to heat your water talk about stress? But if you're one of that very small percentage of expats who have a plan b in mind or have been working on it You can use those three days to get yourself organized get the hell out of dodge and fly down To that little bolt hole you've got in latin america Hook up with that little network you created and watch the first world fall apart at a nice safe distance

[16:17] And no matter how bad it gets there up in the first world down here in latin america No one's going to freeze. No one's going to run out of water and no one's going to starve, but you knew that already, right? So next time you're in a contemplative mood. You might want to think about that What if you were sitting up in cleveland or mawake and you were told in three days? They're going to shut the grid down or the internet or that world war three or a cyber war was coming And you had just three days to prepare Would you be ready for that? Even if you're a prepper have a bug out bag and are able to survive short term with all the junk You got stacked in your basement. Would you be able to survive indefinitely? Well, guess what all my friends and expat buddies south of the border. We're not worried. We hardly give it a thought So again, I ask how is that plan b coming?

[17:05] By the way, remember a couple of shows ago when I was talking about how gringos scam other gringos It's kind of a perverse gringo advantage bad boy og's have over newbie gringos who haven't quite gotten their sea legs yet You remember the story Newbie gringos will arrive with rose colored glasses. They're easy to spot They'll often get approached by other gringos telling them about some fantastic deal They just have to get into now or forever regret it As one expat gringo rick said to me recently Often what people present to you as a ground floor investment turns out to actually be an investment that starts Somewhere deep in the basement and never gets out of the muck Well, it's not just crooked gringos on the gringo tourist trail Who'll home in on newbie gringos trying to get them to invest in their schemes?

[17:52] There are plenty of latino scammers out there too, but lucky enough for us gringos and expats Most of us can smell a latino who's trying to scam us a mile away unless it's a real estate scam It seems most gringos can't resist a real estate deal even when presented by a latin scammer Probably because latinos can present beautiful organized mounds of paperwork all signed sealed and stamped in a hundred different ways And to newbie gringo expats even some of us old guys. It all looks so legit The fact is latin americans can create really great fake documents Man, i'll tell you when you fall in love with a piece of real estate and they bring out that paperwork Sometimes we want that deal to go through so badly and the paperwork looks so good We fall down on our due diligence

[18:39] The tip here is you got to get your own lawyer to go over the paperwork Because lots of times especially when dealing with new fresh green gringos a latino selling some land will bring along his lawyer Bring you into his lawyer's office and then you think it's got to be legit The tip here is to always get your own latino lawyer involved Oh and beware of land deals where the other guy says you don't need to bring your lawyer and it'll just cost more money We'll use mine. Don't fall for it I've seen too many newbie gringos and expats fall right into that hole And believe me the paperwork always looks perfectly fine and even very pretty and of course, it's all in spanish It better be in spanish because you know If you get a document any kind of document in latin america and it's in english, it will not hold up in court It's got to be in spanish Now suppose you're in the middle of a land deal and you're looking through the paperwork

[19:27] If you have questions about it or to the seller you look like you're bucking or that you're hesitant A scammer will always be able to produce more paperwork on demand because more is better, right? Hmm. The other tip is when you first arrive stay calm There are no deals that if you don't act on them right now, they'll get away Don't let them use that FOMO thing on you, you know FOMO fear of missing out When you start feeling that kind of pressure from someone who's trying to sell you some land Then you should pull the rip cord get the hell out All right. So we're talking about real estate scammers here Yep, they'll trap lots and lots of gringos But when you're talking about other kinds of financial scams most gringos won't dive in if a latino is presenting that kind of plan Especially when the supposed returns are way too good to be true

[20:15] But i'll tell you there are big money latino scammers all through latin america and they're scamming not gringos and expats But local people who've got a little dough you read about such scams and in the latin newspapers and periodicals all the time For example in ecuador's biggest newspaper the mercurio the mercury comes this article just today about a big money scam where latinos are Nailing their brethren Everybody wants to get rich quick, huh? It says here Grupo renasiar that means rebirth a newly discovered pyramid scheme has recently collapsed The pyramid scheme was headed by don marquito and don desguito Yesterday five people were detained and charged with operating in an illegal financial scheme Now get this they offered returns of 15 to 20 percent paid

[21:02] weekly And so far over 20 families have been found to have bought into the scheme Who actually sold land and vehicles to invest their entire net worth from 30 to 200 000 For a supposed return of 15 to 20 a week Oh, and it says one of the five people charged works for a bank and facilitated Getting the proper legal looking paperwork for the so-called investors Now I have to say gullible gringos, especially newbie gringos are often scammed and gouged It's a business especially on the gringo tourist trail, but still I don't think the dumbest most gullible idiotic gringo expat I know would go for a deal like that. I don't know anyone who would bite

[21:49] But then again, these guys wouldn't be working that scam if they didn't hook a sucker once in a while, right? Hey, can 10 000 exiled nigerian princes be wrong? Suckers fall for that one all the time Though that's not to say I haven't got a few acquaintances up in chicago that are that dumb But down here the ones that have already made it to latin america are usually cut above at least we think we are We like to believe we process the world in a slightly different way It seems anyone who's taken the leap to have a plan b and got the hell out of dodge. We're sort of outliers It's true. You don't meet many gringos or expats who are living down here permanently Who you might call average joes or josephines? So what that means is getting the hell out of dodge permanently is kind of an iq test in itself Speaking of iq's wouldn't we all like to know the iq of the guy sitting next to us, huh?

[22:37] Here's a thought experiment. Wouldn't it be interesting if for just one day of the year Everyone had to wear a t-shirt with his iq printed on it You know what? I think most me too wokesters wouldn't go out of the house But really wouldn't it be nice if there was a very cheap simple and fast iq test? Well according to an interview jordan peterson just gave by the way He's an expert on iq and cognitive development. He's been working at it for 20 years He says there is a very easy and simple test You could give someone to see if he's got an iq of 80 or less In other words if you can't successfully complete this test your iq is 80 or less Hmm have I got your interest yet? Well, we're getting towards the end of the show. So we'll skip that till next time. Just kidding All right. Here's the test. Don't try this at home

[23:25] You take a regular envelope and a regular piece of paper a piece of plain paper stationary You tell that person to fold it in three and put it in the envelope and seal it Believe it or not jordan peterson says it's not at all a trivial thing for a person whose iq is 80 or less He says they just cannot get that paper folded in three equal parts Because you know, they've got to be almost exactly equal for you to get it inside the envelope without crinkling it Now if you think i'm making this up send me an email the expert files at gmail.com And i'll send you the link to that jordan peterson interview by the way He says in the interview he's tried to train people with 80 iq's and lower. They just can't do it So what can we take away from this? Well, i've learned i should never stuff an envelope in front of someone who's seen that interview Here is a topical email johnny. What's the price of gas down there in central america?

[24:16] I've been to central america twice and i've noticed many oddball gas station brands Are the gas blends in quality the same as they are up in the states or is it gas latin style? Signed long-time listener jonas from oklahoma PS I'm in the process of getting my plan b underway and I will be coming to your next seminar Please put me on that list and let me know when All right jonas. Thanks for that as far as the seminar I'll keep you posted on this show and i've got you down on the list Looks like we may be putting one together for august or september Anyway, as far as gas gas prices and the quality of gas Well, most gas is around five to six bucks a gallon posed to go much higher Just like in the rest of the world for some reason as opposed to up in the us

[25:02] Diesel's always around 50 cents a gallon cheaper as it should be It's much cheaper to produce than regular gasoline because it takes less refining But as you know when the malignant u.s. Government gets involved and they start hammering certain industries with mega taxes Markets get distorted now as far as actual gas stations here in latin america jonas, right? They've got all kinds of oddball brands. You've never heard of and personally I never go to those stations unless i'm absolutely down to zero when i'm stuck and they're the only ones nearby I try not to let that happen. But when it does I always buy premium gas there However, they've got the usual international brands too like shell Texaco which they call texaco Vp and some other well-known brands

[25:48] And when there I never buy premium only regular because I know about gasoline formulations in a past life I was an engineer Even some of my professors said there's no point buying premium gas unless you've got a sports car or high compression motor Because practically every car engine is made to run on regular gas And every extra cent you pay for premium goes right into the pockets of big oil Then again, you have to trust the brand and the gas station So that's why I don't have too much faith in all the off brands you see down here because no one's testing the gas It's the honor system but not at the international gas station outlets like shell and texaco, etc I mean texaco who have to maintain the brand's international standards that said though I know lots and lots of gringos and expats who only put premium gas in their car

[26:34] Doesn't matter if they're at a texaco or one of the oddball pumps and I say go ahead. It's your time By the way, just to give you an idea the amount of ready cash the average driver has down here I've been at many a gas station filling up when a guy pulls up and asks for 50 cents worth Now I remember back when I was in high school I'd put in 50 cents worth once in a while too because I was broke But plugging in 50 cents into an inflation calculator means that 50 cents when I was in high school is equal to around $3.50 today And if way back when in high school, I put seven cents in the gas tank That's equal to 50 cents today The good news is back then I wasn't as broke as I thought Now if I would have told my friends and teachers back in the 70s The teachers that knew about math geography and history that every 50 cents they have in their pocket right now will be worth

[27:22] $3.50 in 2022 they would have said I was nuts They would have scolded me and said the us government will never turn into a banana republic Little did they know? You've been listening to the expat files living in latin america If you need some help with your own plan b we can schedule a one-on-one phone or skype consult Just send me an email the expat files at gmail.com And if you want to get on the waiting list for my next week long expat insider seminar in central america Where you're guaranteed to get a two to five year head start on your plan b send me an email the expat files at gmail.com nos vemos