How to encourage tax cheating by the very wealthy

[murps2000 86]

11 hours ago, gowlerk said:

And you are correct. I'm thinking the biggest new threat to workers is the so called "gig" economy. As practiced by the evil called Uber and the like. Also largely practiced by DZs, but for a completely different reason.

I tried to stop them in CA by voting no on prop 22. They threw a bunch of money into political ads and convinced enough voters to overturn legislation mandating worker protections for their contractors. For months I couldn’t watch the evening news without seeing them.

https://www.google.com/amp/s/www.latimes.com/business/story/2020-11-04/uber-lyft-proposition-22%3f_amp=true

[kallend 1,620]

Former IRS commissioners chime in:

https://www.washingtonpost.com/opinions/five-former-irs-commissioners-bidens-proposal-would-create-a-fairer-tax-system/2021/05/04/c4ee8346-acfc-11eb-ab4c-986555a1c511_story.html

[kallend 1,620]

https://www.abc15.com/news/national/we-build-the-wall-co-founder-brian-kolfage-indicted-on-tax-charges-in-florida

Brian Kolfage, who co-founded the "We Build The Wall" project, was indicted on federal tax charges in Florida.

According to the Associated Press, Kolfage is also facing fraud charges in New York.

The AP reported that court records show that on his 2019 tax returns, Kolfage underreported his income.

The "We Build the Wall" project, set up to help former President Donald Trump's border wall be built, raised about $25 million.

[JoeWeber 2,294]

On 3/24/2021 at 11:50 PM, billvon said:

The problem is that many of those ways are not quite legal - but are not illegal, either.

For example, let's say you create a 501c3 private foundation, intended to run a museum.  The museum is in a building you purchase.  You have a few things on exhibit, all relatively cheap art that you like.  You also have a back room with an entertainment space where you hold parties for donors, who are all your friends, and who rarely donate.  Big TV, an open bar, stripper poles.  The money in this foundation pays for the purchase of the property, utilities, for catering supplies for your parties, and for travel expenses that allow to fly first class all over the world to buy art you like.  You contribute your ordinary pay check to this foundation, and thus deduct all your income.

That is all technically legal.  It is also a way to party and travel all over the world tax free.  You can't get away with this, of course, unless you have those clever accountants you mention.  But if you are making $500K a year, the $185,000 you save on taxes pays for a lot of creative accounting.

Yep. And that, sport fans, is why when Bill Gates pledged the bulk of his $64 Billion Dollar wealth to charity a decade ago and he now has $124 Billion you know it is bullshit and you are being conned.

[BIGUN 1,049]

On 5/6/2021 at 10:17 PM, JoeWeber said:

Bill Gates pledged the bulk of his $64 Billion Dollar wealth to charity a decade ago and he now has $124 Billion you know it is bullshit and you are being conned.

Originally, I thought you were wrong and what I found out was - 64 million shares = $4.6 billion. https://www.cnbc.com/2017/08/15/bill-gates-donates-4-6-billion-largest-pledge-since-2000.html

Then I found out, you were right. https://www.inc.com/geoffrey-james/bill-gates-promised-to-give-away-his-wealth-well-that-was-bs.html

Dammit.

[JoeWeber 2,294]

1 hour ago, BIGUN said:

Originally, I thought you were wrong and what I found out was - 64 million shares = $4.6 billion. https://www.cnbc.com/2017/08/15/bill-gates-donates-4-6-billion-largest-pledge-since-2000.html

Then I found out, you were right. https://www.inc.com/geoffrey-james/bill-gates-promised-to-give-away-his-wealth-well-that-was-bs.html

Dammit.

One problem he has is that his Microsoft share sales went not into easily given away cash but, I believe it's +/- 60%, into other equities. Most home offices of the super wealthy are less aggressive at 32%. In other words he is after even more money. In that pool are +/-12 million shares of that champion of the fair wage and little guy Walmart. Interestingly, at 250,000 acres, he is also the largest private owner of farmland in the US. Farmland in quantity is a reliable safe haven away from stocks averaging 5% uptick per annum, not including federal subsidies, so it's a great bet. I bought some 6-7 years ago that has already more than doubled in value. A great hedge when your cash ain't getting jack. Regarding why he has aggressively increased his farmland investments Gates said: 

“My investment group chose to do this. It is not connected to climate,” he wrote.

“The agriculture sector is important. With more productive seeds we can avoid deforestation and help Africa deal with the climate difficulty they already face. It is unclear how cheap biofuels can be but if they are cheap it can solve the aviation and truck emissions.”

To my jaded ear that sounds like a homespun raft of off the cuff self serving horse shit. I believe, like moi, he holds it for the money.

Nothing he is doing is illegal, that's sure. But when you use the system and the tax code to nearly double your $65 Billion while pretending to mostly give it away in your lifetime you sort of beg the question of whether you are being undertaxed.

 

 

 

 

 

[Phil1111 908]

2 hours ago, BIGUN said:

Originally, I thought you were wrong and what I found out was - 64 million shares = $4.6 billion. https://www.cnbc.com/2017/08/15/bill-gates-donates-4-6-billion-largest-pledge-since-2000.html

Then I found out, you were right. https://www.inc.com/geoffrey-james/bill-gates-promised-to-give-away-his-wealth-well-that-was-bs.html

Dammit.

"Bill Gates is a consistent target of conspiracy theories, many becoming especially heightened amid the coronavirus pandemic. While the tech billionaire remains the target of scorn and suspicion online,... He has given more than $50 billion to charity since 1994. However, his wealth has grown even faster than he has donated money....the Chronicle of Philanthropy.  In 2019, the couple donated $589 million to charity, making them the seventh most philanthropic people last year."

"The 21st annual Philanthropy 50, the Chronicle of Philanthropy’s list of America’s biggest donors, is based on gifts and pledges of cash, stock, land, and real estate to nonprofit organizations in 2020...

Warren Buffett is absent from this year’s list even though he gave the Bill & Melinda Gates Foundation stock in his Berkshire Hathaway investment firm valued at more than $2.2 billion last year.

The donation was an annual installment on his 2006 pledge of more than $36 billion in Berkshire shares to the foundation. That same year he also made multibillion pledges to the foundations of his late first wife and his three children....

13. Bill and Melinda Gates Microsoft co-founder and wife $157 million (estimated)"

From above last year "Jeff Bezos Amazon founder $10.2 billion Biggest gift: $10 billion to Bezos Earth Fund"

I've heard of Inc. but that entire story is garbage. It attacks philanthropy as is the money pledges isn't given. Yet offers no facts to support it. Yes money has been pledged and not yet donated. Buts thats entirely different from the tax deductions that it obtusely makes references to that may be falsely claimed as deductible expenses. Attacks on the Gates foundation come from the special interest groups that are threatened by its donations. Clarity here: Bill and Melinda Gates Foundation by Influence Watch.

To date the Bill and Melinda Gates foundation has given away just under $45 billion but that includes monies from Warren Buffet.

and furthermore "Also announced was the decision to spend all of the foundation's resources within 50 years after Bill's and Melinda's deaths.^{[44][45][46][47]} This was later lowered to within 20 years of their death.^[48][49] This would close the Bill & Melinda Gates Foundation Trust and effectively end the Bill & Melinda Gates Foundation. In the 2006 announcement, it was reiterated that Warren Buffett "... has stipulated that the proceeds from the Berkshire Hathaway shares he still owns at death are to be used for philanthropic purposes within 10 years after his estate has been settled"

 

[Phil1111 908]

1 hour ago, JoeWeber said:

One problem he has is that his Microsoft ...tax code to nearly double your $65 Billion while pretending to mostly give it away in your lifetime you sort of beg the question of whether you are being undertaxed.

 

For a short view on reasonable critique of the Gates foundation See the "Influence Watch" quote and the Wikipedia quote that the Gates foundation is to be wound down with 20 years of his death,(In the above post).

I hear what you're saying but IMO much of the unjustified criticism of the Gates foundation. Comes from the right wing political spectrum and special interest groups that don't like his support of social causes.Obviously Jeff Bezos's ex wife MacKenzie Scott has set a new benchmark for giving money away w/o strings attached.

But the Gates foundation has impeccable credentials when it concerns "Program Expense Ratio 98.89%" from Charity navigator.

Edited May 8, 2021 by Phil1111

[JoeWeber 2,294]

2 hours ago, Phil1111 said:

For a short view on reasonable critique of the Gates foundation See the "Influence Watch" quote and the Wikipedia quote that the Gates foundation is to be wound down with 20 years of his death,(In the above post).

I hear what you're saying but IMO much of the unjustified criticism of the Gates foundation. Comes from the right wing political spectrum and special interest groups that don't like his support of social causes.Obviously Jeff Bezos's ex wife MacKenzie Scott has set a new benchmark for giving money away w/o strings attached.

But the Gates foundation has impeccable credentials when it concerns "Program Expense Ratio 98.89%" from Charity navigator.

Yes, and for all we know Melinda Gates has had it with Bill's way of hoarding. They know the tax man cometh so they play the charity game. When you start at $65 Billion and I guess he's now at $150 Billion and you put $50 Billion into your foundation along the way, and in only several years, it's arguable that your tax rate is way too low. 

[Phil1111 908]

40 minutes ago, JoeWeber said:

Yes, and for all we know Melinda Gates has had it with Bill's way of hoarding. They know the tax man cometh so they play the charity game. When you start at $65 Billion and I guess he's now at $150 Billion and you put $50 Billion into your foundation along the way, and in only several years, it's arguable that your tax rate is way too low. 

We all agree:“The distance between top and bottom incomes in the United States is much greater than it was 50 years ago,” Gates wrote in a blog post reflecting on 2019 published Tuesday. (Indeed, American income inequality is at its highest level in decades, according to U.S. Census Bureau’s Gini index.)

“A few people end up with a great deal—I’ve been disproportionately rewarded for the work I’ve done—while many others who work just as hard struggle to get by,” he wrote....

To solve the problem, Gates said the U.S. government should raise taxes that affect the wealthy.

“I’m for a tax system in which, if you have more money, you pay a higher percentage in taxes. I think the rich should pay more than they currently do, and that includes Melinda and me,” Gates wrote, referring to his wife."

But Brent will be along shortly to put you, me, Melinda, Bill, MacKenzie Scott, Steve Forbes, et al, straight.

Edited May 8, 2021 by Phil1111

[kallend 1,620]

Two issues:

1.  The effective tax rates on the very wealthy are too low, due to their having bought the entire GOP.and a good fraction of the Dems.

2. Despite benefitting from #1 above, tax cheating by the wealthy is endemic.

[JoeWeber 2,294]

1 minute ago, kallend said:

Two issues:

1.  The effective tax rates on the very wealthy are too low, due to their having bought the entire GOP.and a good fraction of the Dems.

2. Despite benefitting from #1 above, tax cheating by the wealthy is endemic.

The bastards can't even be bothered to US Flag their Mega Yachts so as to pay some of the tax they say they should pay. 

[JoeWeber 2,294]

5 hours ago, Phil1111 said:

To solve the problem, Gates said the U.S. government should raise taxes that affect the wealthy.

“I’m for a tax system in which, if you have more money, you pay a higher percentage in taxes. I think the rich should pay more than they currently do, and that includes Melinda and me,” Gates wrote, referring to his wife."

 

I'm telling you, it's a bald faced con. Not too far back I listened to him respond to Warrens proposed wealth tax. At the $100 Billion plus level that would be 3% per annum. The thing was he turned it into a joke. Instead of addressing the merits of it right or wrong he made a funny like he couldn't do the math and if he had to figure out how much he'd be left with each year well......... 

I am all in favor of making bags of money through hard work or better just dumb luck. That said, hundreds of millions is a crazy amount of money in todays dollars. A billion is just insane and vastly more than it takes to provide generational wealth. 10's or 100's of Billions should be achievable but very heavily taxed. We need the money in the public coffers not in someones self aggrandizing foundation.

Edited May 8, 2021 by JoeWeber

[Phil1111 908]

13 minutes ago, JoeWeber said:

...Billions should be achievable but very heavily taxed. We need the money in the public coffers not in someones self aggrandizing foundation.

"Switzerland is among very few countries left with a recurring annual wealth tax. The number of OECD countries imposing it dropped to four in 2017 from 12 in 1990....The measure forces residents in one of the world’s richest nations to tally the value of their investments, real estate, cars, fine art, Bitcoin, and even beehives and cows....Switzerland’s cantonal wealth tax just isn’t as emotive a matter as elsewhere. In January, a bid to cut the levy in Zug, the jurisdiction near Zurich known as a low-tax home for hedge funds and commodity giant Glencore Plc, was defeated by lawmakers.

“A lot of European countries have tried wealth taxes, certainly wealth taxes on an annual basis, and they’ve almost inevitably retreated from it because it’s highly complicated,”

I don't disagree that inequality in the amounts north of hundreds of millions of dollars needs to be addressed. IMO VAT-GST consumption type taxes are easier to administer than a wealth tax.

 

[JoeWeber 2,294]

Just now, Phil1111 said:

"Switzerland is among very few countries left with a recurring annual wealth tax. The number of OECD countries imposing it dropped to four in 2017 from 12 in 1990....The measure forces residents in one of the world’s richest nations to tally the value of their investments, real estate, cars, fine art, Bitcoin, and even beehives and cows....Switzerland’s cantonal wealth tax just isn’t as emotive a matter as elsewhere. In January, a bid to cut the levy in Zug, the jurisdiction near Zurich known as a low-tax home for hedge funds and commodity giant Glencore Plc, was defeated by lawmakers.

“A lot of European countries have tried wealth taxes, certainly wealth taxes on an annual basis, and they’ve almost inevitably retreated from it because it’s highly complicated,”

I don't disagree that inequality in the amounts north of hundreds of millions of dollars needs to be addressed. IMO VAT-GST consumption type taxes are easier to administer than a wealth tax.

 

You need to get it as they earn it not once they got it, yo. It's the same thing as dating JV cheerleaders, if memory serves.

[lippy 764]

2 hours ago, JoeWeber said:

You need to get it as they earn it not once they got it, yo. It's the same thing as dating JV cheerleaders, if memory serves.

That's how Matt Gaetz says it works....

[JoeWeber 2,294]

4 minutes ago, lippy said:

That's how Matt Gaetz says it works....

Ya, well it turns out we went to different schools together. Go figure.

[JoeWeber 2,294]

2 minutes ago, RobertMBlevins said:

A boatload of charities use their nonprofit status in sometimes shaky ways. 

If you want fair taxes, then you have to have a flat tax system on EVERYTHING, set to a sliding scale according to income, withOUT loopholes. It's the only way to ensure everyone pays their fair share. And absolutely nothing is deductible. NOTHING. 

As far as foundations and trusts go, I wouldn't know what to do about them. If you are going to make the donations deductible, then the taxes have to come from somewhere. I say make the foundations and trusts pay a modest flat tax on their income as well. 

Let them have their foundations and trusts and give them an extra cookie for being awesome. The problem is naming the number when the big tax increases start.  My thinking is that at $100 million net worth you start paying the flat tax on top of everything else. Maybe 1%. By the time it gets to $1 Billion then it's 5%. $100 Billion then 10%. I respectfully submit that there isn't anything you want that cannot be had with $90 Billion Dollars.

[ryoder 1,380]

5 minutes ago, JoeWeber said:

Let them have their foundations and trusts and give them an extra cookie for being awesome. The problem is naming the number when the big tax increases start.  My thinking is that at $100 million net worth you start paying the flat tax on top of everything else. Maybe 1%. By the time it gets to $1 Billion then it's 5%. $100 Billion then 10%. I respectfully submit that there isn't anything you want that cannot be had with $90 Billion Dollars.

“A billion here, a billion there, and pretty soon you're talking real money."

[JoeWeber 2,294]

25 minutes ago, RobertMBlevins said:

Very few people are actually super-rich. If you want to be fair and raise more money, the answer is a sliding scale flat tax without a deduction list and a tax code longer than three typical Bibles. The more they make changes to the tax code, the more the lawyers figure out ways to get around it. A straight-up flat tax on everyone with very limited deductions, has always been the best way. 

But it's been proposed a boatload of times...and just as many times it has been rejected. 

Fine. But are you willing to agree that the Super Wealthy need to be taxed a lot more? Not as a penalty to make you feel better but simply because the construct of fiat money might just fall apart when just a few people have the most of it.

[billvon 2,380]

31 minutes ago, RobertMBlevins said:

Very few people are actually super-rich. If you want to be fair and raise more money, the answer is a sliding scale flat tax without a deduction list and a tax code longer than three typical Bibles.

Why not keep the current progressive scale and just simplify the tax code?  The complexity of the tax code has nothing to do with how basic tax is calculated.  (And a "sliding scale flat tax" is still progressive; it just uses a different formula.)

(Needless to say there will ALWAYS be ways to get around paying taxes - but a simplified tax code would help reduce the number of people who avoid taxation.)

[JoeWeber 2,294]

18 minutes ago, billvon said:

Why not keep the current progressive scale and just simplify the tax code?  The complexity of the tax code has nothing to do with how basic tax is calculated.  (And a "sliding scale flat tax" is still progressive; it just uses a different formula.)

(Needless to say there will ALWAYS be ways to get around paying taxes - but a simplified tax code would help reduce the number of people who avoid taxation.)

This is nothing short of arrogant assholeishness but I have always welcomed confusion in the tax code. Some years ago I sorted out a way to distribute fully tax deferred assets into LLC's and then break them into separate parts and then bundle some bits into assets, under separate contracts, to be distributed into other LLC's so they could be used to purchase, tax deferred. other assets that, go figure, passed the IRS smell test. So yes, just like any other game if your opponent leaves an opening you are a moron if you don't take it. But I'm a small potatoes douchebag. At 50 million things should be different.

Edited May 9, 2021 by JoeWeber

[JoeWeber 2,294]

34 minutes ago, RobertMBlevins said:

Yes, I agree the super wealthy should pay their fair share. 

It HAS happened before that a few select people controlled most of the wealth in America. And it was probably a lot worse back then. 

The era of the Robber Barons and the bankers. Think industrialization, railroads, and the Gilded Age. A few people damned near owned everything that was possible to own. Including most of the labor force. 

Think today.

[kallend 1,620]

6 hours ago, ryoder said:

“A billion here, a billion there, and pretty soon you're talking real money."

Attributed to Senator Everett Dirksen (R, Illinois).

[BIGUN 1,049]

20 hours ago, JoeWeber said:

Nothing he is doing is illegal, that's sure. But when you use the system and the tax code to nearly double your $65 Billion while pretending to mostly give it away in your lifetime you sort of beg the question of whether you are being undertaxed.

Thanks to you and Phil. I guess I've just had my head buried in the sand about it. I support a flat tax or strongly revised tax code, but for a simpler reason - I don't think I should have had to pay tax attorneys to prove my innocence. Of course, the legal fees were tax deductible, but that's not the same as using the money to grow the business.

Nor, do I "blame" the Bills' & Jeffs' of the world. Accountants get very caught up in meeting the challenge of helping their clients/employers to avoid taxes. It's like a game of chess to them.