Talking Expat Taxes #5

Thanks for having me, Alex.

Yeah, sure.

Sure. So, a couple things, we moved to New Zealand 10 years ago, end of 2013, beginning of 2014. So that was before the pandemic and before certain people were in the White House. I wanted people to know that because there are a lot of reasons why people moved to New Zealand. A lot of Americans moved to New Zealand during the pandemic. A lot of them. It seemed like a lot more than before. So our decision to move, we had actually visited New Zealand, and I go into this in the forward of my book. We were visiting New Zealand in 2012 on holiday, on vacation, just for fun for two and a half weeks, and we fell in love with the country. We were already thinking about moving from the current United States. We lived in Maryland, but on the Delaware border. And we both had jobs in Delaware. And so we were thinking about moving anyway. I was born and raised in Delaware. And I mean, 30 years of the same spot, I had kind of had enough. We were looking at Colorado because we lived there for a short time, and we were looking into Hawaii, but it was too expensive and jobs were scarce. When we found New Zealand on holiday, we started learning about it. I actually say this in the book. If you can swing it, let's say you're thinking about moving to a country, maybe New Zealand, but it may be another country, don't just go there without visiting first. Know that it's expensive to take a trip and if you have kids and you need to find a babysitter for a week or two to go check that country out. I highly recommend it. There are a lot of Americans, just because of the cost, because New Zealand is so far and so remote and so expensive to get to, that they don't come here first to check it out. They don't come here on holiday. What I like to call a working holiday. You're not here to sit on the beach. You're here to go to the different areas of the country that you think you might want to live in and talk to people and look at the house listings and look at the job listings and look at the schools and look at the lifestyle and take notes. That is really what you want to try to do.

Yeah. Right. Definitely not. The other thing I want to say is - Analysis paralysis. We suffered from that. I like to equate myself to Tigger, and my husband's a little bit like Eeyore. Or, he's like a cross between Winnie the Pooh and Eeyore. He's got a really good heart, but he's a little bit like, I don't know. And me, I'm just like - let's do it, let's do it, let's do it, let's do it! And we had analysis paralysis in that I couldn't make this decision unilaterally. I had to discuss this with my husband. This was before we had children. We had many, many, many nights, long hours, probably 150 hours of just talking, crying, fighting, writing out pro and con lists. It is not an easy decision, especially New Zealand, where it's a much further flight than, France or Spain or the UK.

And you know what, there are immigrants, not just Americans, who come here and it doesn't work out for them. When we came here, the kind of visa my husband got, it gave him nine months to find a job. It was like a job search visa. And then that job search visa, if he got a job offer that was a qualified job, would transfer to a two year work visa. And then from there, we worked through the visa process to citizenship, that took eight years. The thing is though, if he had not found a job on his job search visa in nine months, New Zealand would have been like, okay, bye.

And we had to save for that. We had to prove to the New Zealand government we had enough money to leave. You have to show a bank account that actually has enough money in it to get out. And then the other thing too is there are people in this country whose spouses or partners got a job offer, like especially medical jobs. I know someone whose wife is a doctor, and he was like, I will be fine. I will be able to find a job because I'm a software engineer and he's had a very hard time. So you have to kind of weigh everything up.

Yeah, there's one other thing that I want to say about that, if you're gonna go, then you have to have a game plan for coming back if it doesn't work out. Now, luckily, we had supportive parents and they said, if it doesn't work out, you can live with us for a couple of months to get back on your feet, if you came back. But not everybody has that. I know people who sold everything they owned - their houses, their cars, their furniture, they sold everything and they came over here and then like within a year they couldn't find jobs or they didn't like the culture, they didn't feel like they made a lot of friends. That's actually a problem here. Kiwis are very closed off people and they don't make a lot of friends who are outside of their circle because it's only a country of five million people. It's not the same vibe as social butterfly America, I feel. They are lonely and then they have just sold everything. They sold their whole life and then they're like - my god, how are we gonna start all over again to go back to America, because we don't want to stay here. You have to have that place to land if you do want to go back. So, when you're planning a trip or when you're planning to move abroad, be very candid with your family and friends and then ask, if it doesn't work out, can we stay with you guys for a month or two to get back, if we have to come back here? You don't want to land flat-footed in America again.

So I think, again, I kind of actually ended up working like a working holiday. Even though when we went to New Zealand, we were just backpacking and staying in hostels around the South Island. I'm a very talkative person, I'm a very curious person, and so I talk to people. And as I was talking to people, I was running into a lot of immigrants who were also on holiday, and some of them were either on just working holidays for like a year, but some of them had moved full time and they were from all over the world, not just America. I learned things. So, number one, I found out that New Zealand is the only country in the world that has done tort reform. What that means is, they have basically outlawed most lawsuits. It's not litigious here. As an American my mind exploded.

Yeah, now, a lot of people say to me, well, wait a minute, if you can't sue anybody, what if you get hurt? And the answer to that is when New Zealand did tort reform back in 1978, they replaced the right to sue with something called the Accident Compensation Corporation. Now, corporation is a little bit of a misnomer because it's partially run by the government and it's tied in with your taxes. So I don't want people to get the idea that accident coverage corporation means it's a private entity. It's a government entity. And basically what it means is every single person on New Zealand soil from citizen all the way to tourist, if you get hurt here and it's accident related, your medical expenses are covered up to a hundred percent. If you are a taxpaying worker in New Zealand, your salary can be covered up to 100%. I want to give a good example of this. A lot of people think of accidents, like a car accident, and that's covered, but I want to give you a really specific example of somebody that I know. I'm not going to say his name, but he's actually one of the most famous singers in New Zealand right now. But when this happened to him, he wasn't. He was just a guitar teacher at my music school, where I teach. So he took out a glass mason jar and was putting the cap back on it. He took it out of a hot dishwasher, and as he was screwing the cap on, it broke and went right through his hand. And he couldn't play guitar.

Now, what would have happened in America? He was a self employed musician doing the wedding circuit, playing gigs and teaching music to kids. A lot of Americans would either have a super high deductible with their insurance because that's all they can afford, either through their employer or through the Affordable Care Act. All he did was say - I accidentally hurt myself. He submitted some accident coverage, accident compensation corporation, ACC paperwork, and then also gave the ACC all of his gigs that he couldn't play that upcoming summer. He had a whole roster of weddings he was supposed to play. And wedding gigs are how he pays his bills. And he goes, I can't play any of these. And they're like, okay, no problem. They checked that he had been paying his ACC levies over the years. So that's just ACC taxes. And that is a portion of your income as a self employed person. And you don't have to pay them if you make under a certain threshold. So like, you're not going to make you pay it if you make under like five grand a year, because at that point you're destitute. He had been paying it, they're like, cool, you're all good. You've already been paying your quote-unquote insurance, or your ACC levy. So we're going to cover all of your medical bills and all of the gigs that you can't play at 100%. Now he is the most famous musician in New Zealand. He got very lucky because there was that safety net and he didn't have to go find a lawyer.

It works like insurance, but here's the thing, what happened if like the insurance, like let's say if the insurance says you're an idiot and you put a glass mason jar through your hand? We're not gonna pay for that. We're not gonna cover that. Or what if they say, yeah, okay, we'll pay for it, but you know that you have a high deductible of two grand. You have to pay that first. It doesn't work like that here. It very much evens out the playing field. There are things, obviously, they will not cover. If you are drunk and you get in a bar fight, they're not going to cover you like it's an accident. It's not you were stupid, you were doing something illegal. They also won't cover things like drunk driving because they don't want to subsidize illegal behavior. So there's rules around it. Other reasons why I moved here real quick, obviously we have universal healthcare with the option to top up that healthcare with private insurance, which I have, because it's actually really cheap. For a family of three, me, my husband, and my son, we only pay $400 a month for private insurance, and we can get all kinds of stuff done.

Totally. I know someone who has been diagnosed with a very bad form of cancer. If you have stage four cancer here, they're pretty much putting you in a hospice. If you're older, they're not going to try to save you, if you're older enough. And so that's sad. They don't have certain drugs here. That's because we have something called Pharmaq. Basically, it's the only kind in the world where they have a certain pool of money that is allocated for buying drugs at wholesale prices from other countries like the United States. We pay less here for drugs than the United States does, even though the drugs are made in the US, because they have bargaining power. But there are drugs that you can't get here because of that. There are a lot of people who are lobbying the government to say you need to get these cancer drugs because we can't get them and I gotta go over to the United States and pay out of pocket for them. And that's what a lot of people do. But, on the other hand, you can see what's going on with the Dobbs decision. I had a miscarriage and got help help immediately. It's sort of like what's going on in America from a health care perspective for women that scares the living bejesus out of me. I think a lot of people are looking at that. So, when you say is it good health care? I would just say it's different.

No, so actually I'll give you good example. I found a lump on my breast. I was fine. I had been breastfeeding for three years, so something was bound to happen. But of course, when you feel a lump, you got to go get it checked out. I went to my doctor and I said, I have a lump and she goes, okay, well, you can get a mammogram done and that's about it, and we'll check it. But we know that mammograms aren't a hundred percent. And then I went, no, no, no, I have private insurance too. She said you can get a mammogram and you have to wait two months. This was near the pandemic though, so I think the wait times have gotten better. So she said, wait, you have private insurance? Okay, actually you can get the mammogram, but you can also get an ultrasound and we'll do blood work and we'll do an MRI and you get to see the specialist in person and we can get you in in two weeks.

Yeah. Yeah. And I was fine. And it was like a huge weight off my shoulders. But if I had been living with that lump for two months, I would have been a nervous wreck for so long. In America, those wait times are starting to creep up on people because we're losing so many medical personnel in the field. And, you know, it's just becoming so expensive for people to get stuff done that they just don't bother to get it done.

It's a wreck. It's a for-profit system. Healthcare here is not for profit. The insurance companies have to make some money because they're going to be paying your claims, but it's not for profit. Now I will tell you, because I have many, many, many friends who are doctors and nurses in this country who are Americans. You will make as a doctor, or an OBGYN, or as a pediatrician, in America, far more because in New Zealand, your salary is on a grading system. It's like being in the Department of Education in America, where they have tiers of payment because you're working for the federal government as a teacher in a public school system. It's like that here for medical doctors for anyone in medicine. You can make far more money in America as a doctor or a nurse, but you have to pay exorbitant amounts of medical malpractice insurance for yourself. So that's the trade off and also quality of life.

It's pretty amazing and there's something for everyone here. If you like skiing, you can get to the ski fields. New Zealand's one of those places that you're actually never more than an hour and a half from the ocean. It's because we're a very skinny country and we're surrounded by water. So right there, that's amazing. If you want to go skiing, there are ski fields you can drive to. I live at the beach right now where we don't get any snow and it never gets below freezing because we're in a subtropical climate. But I could drive two hours right now and go skiing in the mountains. So it's crazy. There are, you know, drawbacks to the lifestyle here. As an American, there's a huge culture shock. And I have put this in my book. You want Amazon same day - you're not getting it. There's one Costco in the whole country and it's in Auckland, the biggest city. If you don't live near Auckland, you better figure out where you're going to get your Costco style stuff.

Yeah, yeah. What I always kind of tell people is, you have to actually ask yourself, what kind of person are you? Are you a farmer or are you a city person? Actually, that pertains to anything, even if you live in America. If you're a city person and you want to go get a bagel at midnight - Don't move to my town. I live in Tauranga, which only has about 100,000 people. And that's big for New Zealand. We're the fifth largest city, but good luck finding any cafe that's open past two o'clock. Every single shop, the pharmacies, they close at five. The supermarkets close at seven or eight o'clock. The bars close at 10. On the weekends during the summer, they might close at midnight. There's no nightlife here. You have to ask yourself, what kind of lifestyle do you want? On the flip side, if you cannot stand traffic and you cannot stand noise, don't move to Auckland, the biggest city, because the traffic there is on par with, it's not as bad as Washington, DC, but it's close.

Well know what, actually I will tell you that Auckland feels more like LA because of the proximity to water and beaches. And then if you know, you can kind of get out of LA, once you get through the traffic. You can get to like beautiful parts of rural California pretty easily from LA, you know, and like beach towns. That's what Auckland feels like to me.

Look, if you move from New York City to Auckland, you're going to be bored out of your mind. Or you'll feel less stressed and less claustrophobic. But if you love New York, well, I'm sorry, there's not many places in the world that compare to New York. So, you know, I don't think you might like Auckland, but after a couple of months, you might be like, uhhh...you know.

You know, you know what? Know what you like, but at the same time, just be adaptable. Like, you know, and like be open to the possibility that maybe you might like something different. You know what I mean? But what I wouldn't say is if you're coming from New York and you like the New York City lifestyle, maybe don't move to Keirkeir, which is tiny. You know, don't move to, you know, Taupo. Like, don't move there. You just won't have a good time.

Yeah. Real quick, did you say you needed to get going? I just want to make sure you're not late.

Okay. Sorry, you said 5:30. What time is it there right now? Sorry, I did the math wrong.

I have to add one more to that, well two things. It has to do with raising a child. So, you know in the forward of my book I talked about how right when we came here on holiday, to visit New Zealand without any plans to move here, Sandy Hook happened and it just rocked me. I was like what is going on? This is not cool! My husband and I were thinking about starting a family. I was 30 at the time and so you know, here maternity leave and no guns in schools. We have, I mean, knock on wood, we haven't had a school shooting ever. And of course it's still a problem because Christchurch, the Christchurch shooting of Muslims in two mosques down in Christchurch happened in 20..., I can't remember the year, it was 2019. It was devastating. But the difference was that they banned assault weapons with a unanimously, multi-party parliament and put stricter controls on gun ownership in this country to deal with that. And it happened in two weeks. They did it. And I just keep seeing what's going on in America and I'm just like, how can I send my kid to school? I will be worried sick all the time. And also maternity leave. I'm a self-employed musician and music teacher. And so I got sick at the time it was five months, but they bumped it up to six months. I got five months paid maternity leave from the government. Now people will say, say in America, well, that's a handout. If you're not working for an employer. Well, no, I am my own employer and I pay taxes. my taxes paid for my maternity leave. I had to prove the year prior I had incoming income. If I had been a self-employed person and I made no money the year prior, I probably would have gotten maternity leave, but it would have been like 20 bucks a week, like nothing. You know what I mean? That you have to justify that you are a tax paying person who is contributing to the economy of this country.

And when you have a child, the government understands that all the studies show maternity leave is not a handout. It is actually a buffer against things like infant mortality, maternal depression and postpartum depression, maternal suicide. It increases breastfeeding success. It reduces the number of times a mother and, or the baby end up in the ER, within the first year. Paid maternity leave has been shown to actually increase the IQ of babies whose mothers get paid maternity leave. And then also things like less poverty, less crime because that kid actually has a stronger bond to the parent, therefore they're less likely to get into the juvenile justice system. I researched all of this because I think that people have this misunderstanding in America that maternity leave is just a handout. It's not just maternity leave, it's paternity leave for fathers. It's paid parental leave for heterosexual or gay couples and we need to prioritize it. So when I looked at that, I was like, well, obviously that's a benefit. I'm not going to get that anywhere in America, even if I'm working for a good employer. Because at the time I was working for a really good employer, they offered zero maternity leave. And it made me angry. I was just like, I'm not going to do this. A lot of people, it's funny, lot of Brits, people from Britain, come over here and complain about the maternity leave because you apparently get more maternity leave in the UK, and in Canada you get a year. I think you get a year in the UK and they're always complaining, I only got six months. I'm like, do you have any clue? Well how much do you get in America? Zero. And they're like, really? And I'm like, yeah, you have no clue. Stop whining.

So that's a big one for me.