
French economist scours spreadsheets to find secret offshore accounts - hokkos
https://www.bloomberg.com/news/features/2019-05-23/the-wealth-detective-who-finds-the-hidden-money-of-the-super-rich
======
hgibbs
Without reading the article at all, this kind of thing sounds like an
interesting mathematical problem.

You have some time series above various nodes on a graph (each node is an
account), and you cannot observe the time series directly, only some functions
of the total state space, such as yearly income statements, ( i.e. some
information is hidden or obfuscated). The question is how much of the
underlying graph and time series you can reconstruct from your observations. I
know some people have methods for reconstructing time dependent dynamical
systems from observations using E.g. manifold learning, but I'm not sure if
this problem exactly fits the bill.

~~~
johntiger1
sounds like a continuous hmm problem to me :)

------
cascom
The money is only "hidden" in that people's bank accounts investments are not
public record.

Really this title should read "Guy estimates wealth of super rich based on
their income tax return" but that is not as sexy...

------
vkou
This is a dangerous business to be in, with questionable upside.

Daphne Caruana Galizia, one of the journalists involved in exposing the Panama
Papers was recently murdered by a car bomb in Europe. [1]

Meanwhile, how many of the crooks she exposed went to jail? Not a one.

[1] [https://www.npr.org/2018/07/22/630866527/mastermind-
behind-m...](https://www.npr.org/2018/07/22/630866527/mastermind-behind-malta-
journalist-killing-remains-a-mystery)

------
n-exploit
I found the last sentence here most astonishing.

Zucman and Saez’s latest estimates show that the top 0.1% of taxpayers—about
170,000 families in a country of 330 million people—control 20% of American
wealth, the highest share since 1929. The top 1% control 39% of U.S. wealth,
and the bottom 90% have only 26%. The bottom half of Americans combined have a
negative net worth.

------
arcbyte
It started out pretty reasonable, but quickly lost me at the wealth tax and
how "the other 15 countries that tried it didn't do it right". Suuuurrrrree.

~~~
undersuit
And right after your paraphrased quote, after describing one of the reasons
those wealth taxes failed one: “Too many people just start from the assumption
that it’s impossible,”

May I inquire, are you starting from this position as well?

~~~
arcanus
That is an unscientific statement. If 15 countries have tried and failed, the
burden of proof is on providing evidence that another attempt would not
similarly fail. Empirically speaking, the evidence speaks against the efficacy
of wealth taxes.

~~~
mgolawala
There are plenty of things in existence that took more than 15 tries to get
right. It is silly to dismiss something because it has failed the last 15
times.

If wealth taxes are beneficial and a good goal to work towards for a society,
then it might be worth it to try for a 16th or even a 17th time until someone
figures it out. Human flight took plenty of tries too, but it was something we
deemed beneficial, so we figured it out.. eventually.

Anyway, Property taxes are a kind of wealth tax, as are capital gains taxes
and inheritance taxes. All three of those are wide spread and well
established.

~~~
toasterlovin
The person you’re responding to isn’t saying we should dismiss wealth taxes
out of hand. They are saying that 100% of the evidence so far is that they do
not work. So the burden of proof is on the person in favor of them.

~~~
timoth
15 countries failing doesn't actually seem to be 100% of the evidence so far.
What about Argentina, Spain, Netherlands, Norway, Switzerland and Italy (and
BC in Canada) listed here as currently having wealth taxes?:
[https://en.wikipedia.org/wiki/Wealth_tax#Current_examples](https://en.wikipedia.org/wiki/Wealth_tax#Current_examples)

~~~
cc439
Those are asset taxes (with the exception of Italy's 0.15% foreign investment
value tax) and it's not hard to hide wealth in liabilities/investments. The
über wealthy would barely be affected by such laws should they be enacted in
the US while those most affected would be the unlucky few who managed to buy a
family sized home in a Californian metro suburb and farmers. I know the
"inhereted wealth (estate) taxes kill family farms" is a Republican trope but
a tax on assets would disproportionately affect those who own real property
and outside of the wealthiest urban centers and their elite suburbs, that
would be people who own hundreds or thousands of "cheap" acreage. I have a
friend who recently took over his family's 1,200 acre, certified organic dairy
farm and a 0.75% asset tax would almost assuredly have him call it quits and
sell off to a regional Wal-Mart-tier agribusiness. He only nets ~$100k/yr off
of property assessed at $2m and lopping ~$15k/yr off his take home income
would be enough incentive, in my opinion, for him to go back to hos $80k/yr
industrial equipment sales job.

------
cosmodisk
Again,people often make this sound simpler than it actually is. I don't like
paying taxes,nobody does. I'm also not stupid enough to deny that even though
my income is higher than national average,I'm most likely getting more in
return than I contribute. I'm also strongly against any tiered tax model,where
you pay more if you earn more.There are some freeriders out there but the
majority did put extreme amounts of energy to get to the point where they can
make lots of money and that can't be said about everyone. If extra money to be
raised from additional taxes,it shouldn't go towards F-35s, carrier ships or
some other shit but rather towards education, some element of risk acceptance
towards encouraging people to start business,create and etc. However, until we
continue having people who vote based on show values rather than merit and not
ensuring the elected once doing what promises, there's no chances of changing
any of this.

~~~
chongli
_There are some freeriders out there but the majority did put extreme amounts
of energy to get to the point where they can make lots of money and that can
't be said about everyone._

Did Jeff Bezos put in a million times as much effort as a typical minimum wage
worker?

The reason why it's fair to make Jeff pay way more taxes than the average
person is because he benefits way more from public services than the average
person. Where would Amazon be without public roads, electricity, or water
services?

You can perform this exercise with any big company. The idea that an
entrepreneur builds a billion dollar business entirely on their own and so
they deserve all of the wealth produced is the most pernicious idea in our
societies today. Unfortunately, as the Monopoly study showed [1], this idea
may be universal to humans who obtain an advantage.

[1] [https://tedsummaries.com/2014/09/05/paul-piff-does-money-
mak...](https://tedsummaries.com/2014/09/05/paul-piff-does-money-make-you-
mean/)

~~~
mrep
> Did Jeff Bezos put in a million times as much effort as a typical minimum
> wage worker?

No, but he did make a million times more risky bet than the typical minimum
wage worker. He quit a lucrative job at a financial company to start a company
where he owned 100% of nothing and he has held onto that stock for 23 years.
Common financial wisdom is to diversify your investments but instead, he took
a massive pay decrease to start a company in the hopes that the stock would
one day pay off, then held onto the stock of his company and led it to the
massive valuation it currently has. He could have cashed out at any time but
he didn't because our system rewards those who take risks/keep investing.

If you massively taxed outsized earnings and/or capped it, he probably would
have never even started the company because why would you take the extreme
risk of doing a startup when most of them fail? He probably would have just
stayed at the financial company and if he did do the startup, then he probably
would have cashed out when the taxes/cap got too large and retired instead of
working to continuously increase the company's value which increases
everyone's standard of living.

~~~
aljp
A million times more risky bet? By what measure? The risk to his livelyhood?
His savings? That kind of hyperbole might help your argument, but I think it's
wrong in a few regards. If he came from a lucrative job in the finance
industry that means that he had a position to fall back on if it didn't work
out, he would have had plenty of capital to bankroll his business without
hefty, high-interest loans. His interest on those loans would almost
definitely be lower because he is less risk to the lender. He would also have
had connections in the business lending industry but I think that is getting
too specific for my argument.

Compare this to someone who has a background in retail or a warehouse worker,
the personal and financial risk of starting a business is arguably higher. In
order to accrue the savings to start their business they would have to work
far more hours, and if it doesn't work out they may never have the opportunity
to try again. They have less job security if the business fails. They have
less savings, and may completely deplete their savings and incur a large debt
if it doesn't work out.

I'm not saying that Jeff Bezos didn't earn some of his keep, or that Amazon
doesn't provide a lot of service, but I would say the risk vs reward of his
business is atronomical compared to the average business startup. The entire
idea that he took a risker bet starting a business than a minimum wage worker
is, I think, totally wrong, it's utterly ridiculous, and lacks any perspective
on what minimum wage workers have to stress about.

~~~
johntiger1
Exactly, we should just be upfront when we say that his success is due to both
luck and hard work. Hard work is a given, and many people do that. But to
really succeed you need a good dose of luck as well, and luck is not something
you "work" for

~~~
cosmodisk
Hard work is the most idiotic concept ever. If one works hard,he usually stays
in the same place for 30 years. One needs to work smart,not hard...

------
yeahitslikethat
"They found that something cataclysmic happened around 1980. As Ronald Reagan
was winning the White House, the top 0.1% controlled 7% of the nation’s
wealth. By 2014, after a few decades of booming markets and stagnant wages,
the top 0.1% had tripled its share, to 22%, a bit more wealth than the bottom
85% of the country controlled."

Then later. ..

"When Reagan cut the top marginal tax rate from 70% to 28% across eight years,
and later, when Presidents Bill Clinton and George W. Bush slashed tax rates
for investors, they were doing so on the advice of economists. The prevailing
belief, backed by theoretical models, was that lower taxes on the wealthy
would stimulate more investment and thus more economic growth. The real world
hasn’t been kind to those theories."

~~~
orthecreedence
> would stimulate more investment and thus more economic growth. The real
> world hasn’t been kind to those theories

Economists need to stop optimizing for growth and start optimizing for fixed
size. Once we run out of third-world countries to pump investments into and
get cheap gadgets, there will be no more economic frontiers (or they would
have been found already). Not to mention, our obsession with growth is
destroying the planet we depend on.

I heard an interesting idea the other day: give all males a vasectomy (or some
form of long-term birth control) at the age of 14. The purpose is to make
having children a conscious decision instead of a "whoops!" and put downward
pressure on the overall population.

~~~
hpkuarg
Ah, yes, the ultimate "fuck you, got mine" sentiment in action: benefiting
from the level of unprecedented wealth and prosperity we live in, which came
from humanity spreading around the globe and ingeniously utilizing its
resources, and now wanting to pull the ladder of life itself up away from the
next generation.

Remember, rising empires build roads, and declining empires build walls. The
way out of the current climate crisis is not to wall off what we have and die
in stasis; I'm afraid the only way out is through, and we're not going to get
there by dwindling our own population.

~~~
snowwrestler
> benefiting from the level of unprecedented wealth and prosperity we live in,
> which came from humanity spreading around the globe and ingeniously
> utilizing its resources, and now wanting to pull the ladder of life itself
> up away from the next generation.

Uh, where else on the globe do we have to spread? What new resources are there
for us to discover?

The time period where a growing human population could grow their standard of
living by moving into pristine lands and exploiting their natural resources is
basically over. Lands are either already being exploited, or are intentionally
protected. And the side effects of exploitation are starting to balance
against the benefits.

We can't think about burning the next 1,000 tons of coal, the same way we
thought about the first 1,000 tons of coal humanity burned.

I think you've got the idea that a growing human population was a major factor
in building wealth and prosperity, which is not really true. Our ability to
adapt to and exploit new areas of the Earth allowed us to grow wealth and
prosperity _despite_ steep population growth.

I'm not advocating for forced sterilization. But it is absolutely true that
humanity cannot continue to grow its standard of living by just keeping on
with what worked 100 years ago.

~~~
nostrademons
Humanity has occupied effectively the full extent of the globe since the last
Ice Age ended 10,000 years ago. Any increases in territory since then have
come at the expense of some group that was living there before.

------
kevas
Maybe i should start calling myself that. Kevas, Wealth Detective.

There's a person that has a Huntington Beach address that's owed over one
million by California. There's hundreds of thousands of dollars waiting for
Google and its subsidies to claim. This is the same for all major
corporations... In Los Angeles County, a certain Agency has overcharged nearly
all of their commercial customers hundreds of millions (possibly billion(s))
of dollars over the last few decade.

Wealth Detective has a nice ring to it.

------
jgalt212
> when New York Representative Alexandria Ocasio-Cortez proposed on 60 Minutes
> to hike the top marginal tax rate to as much as 70% on income above $10
> million, Zucman and Saez were fast out with a New York Times op-ed in
> support.

Isn't he smart enough to know that such a tax would only serve to permanently
entrench the super wealthy?

That's why I think Warren's wealth tax is much smarter and would effective.

~~~
perfmode
> Isn't he smart enough to know that such a tax would only serve to
> permanently entrench the super wealthy?

How?

~~~
jgalt212
because no-one will ever be able to make enough money to challenge the
position of the super wealthy. The super wealthy, barring extreme inflation
and unavoidable estate taxes, would become the permanently super wealthy.

~~~
Wowfunhappy
You should be able to avoid this via properly designed and implemented
marginal tax brackets.

------
_bxg1
I wonder if a neural net could be trained on this problem, to "scour" en masse

------
darawk
> One proposal, posted on Twitter by Adam Bonica, a political science
> professor at Stanford, was for a 100% tax on wealth beyond $500 million. He
> based it on what he called “Beyoncé’s rule,” which he explains as, “Think of
> the most talented and hardest-working person you know, and think about how
> much money they have and how much money they deserve.” Queen Bey, he
> tweeted, has an estimated net worth in the neighborhood of half a billion
> dollars. “Let’s have Howard Schultz explain to us why he should be worth
> more than Beyoncé.”

I don't think a statement has ever made me more furious than this.

~~~
intopieces
I can’t think of a statement - beyond, perhaps, the Universal Declaration on
Human Rights - that I have agreed with more.

There is simply no use for one individual to have that much wealth. Tax it,
and individuals will find creative ways to put it to use instead of hoarding
it.

~~~
mrfredward
He's more or less saying "no one should ever be richer than my favorite
singer." I can't possibly think of a shallower way to talk about wealth
inequality.

~~~
pjc50
The argument was that nobody should be richer than what they can earn through
work, or "exploitation" of _themselves_ as a capital asset. Ronaldo would also
work as a yardstick. Earning purely through property or being a boss wouldn't.
It's an interesting one to explore, as there are all sorts of annoying corner
cases possible.

~~~
mrfredward
The royalties an artist receives are a form of passive income. Beyonce had to
work to create an asset (her music), but when she's done with a recording the
income comes from controlling the asset, not directly from her labor. It's
really not that much different to owning a business. She's still capturing an
outsize portion of the value from a process that involves thousands of other
people.

Wealthy musicians are still capitalists, and getting rich running a business
that employs thousands should be as respectable as singing, if not more so.

------
tathougies
> Remember, he points out, that the U.S. Supreme Court ruled the income tax
> unconstitutional in 1895; it took a constitutional amendment to legalize it
> in 1913. “There’s a lot of policy innovation ahead of us,” he says.

Why not just get rid of the entire Constitution then? The idea of changing our
constitution from that of a liberal republic to that of an authoritarian state
should be universally met with disdain.

This is not a matter of liking the rich. I disagree wholeheartedly with the
politics and spirituality of Gates, Zuckerberg, and Bezos. However, the idea
that the government has any right to tax private property at whatever
valuation they see fit is a quick step towards a totalitarian nightmare.

~~~
orthecreedence
> However, the idea that the government has any right to tax private property
> at whatever valuation they see fit is a quick step towards a totalitarian
> nightmare.

Not really? Only in the case where the government is no longer beholden to the
people (or the rich). Right now, the federal government in general is more or
less a captured agency of Wall St and the tax policy follows as such. Either
way, no matter who controls the government, there's a vested interest in
setting tax policy that above all else, optimizes for stability. I mean,
you're a voluntary exchange type, right? Is it in the government's _rational
self interest_ to set a tax policy that causes revolt?

Also, who protects that private property you love so much? There's a cost
associated with that. This whole "taxes are theft!" nonsense is becoming
tiresome. You're part of a society. Pay your membership fees and stop whining.

~~~
tathougies
> Only in the case where the government is no longer beholden to the people
> (or the rich)

No. The exact opposite. Only in the case when the government is beholden to
the people can it be expected to protect the rights of those people.
Otherwise, it is rule by those in power, which is just as bad (if not worse
than) as rule by the rich. Power does not always come in the form of money.

> taxes are theft!

Stop with the strawmen. I didn't say taxes were theft, I just said this wanton
approach to the legal system, especially at the highest levels of law, without
any forethought for what kind of thing this opens up, should be met with
universal criticism. Taxing property of the rich sounds like a great idea, but
the truth of the matter is that giving government this broad power allows it
to also do things like take poor people's personal possessions whenever they
see fit.

Already, even with our rather strong legislation in place, some government
agencies have found it okay to use search warrants to seize private property
(thankfully the SC reversed that idiocy), but the fact of the matter is that
government is one of the few agencies well known to overstep any and all power
given to it.

> You're part of a society. Pay your membership fees and stop whining.

I'm quite happy to support a liberal government. I would not be happy to
support authoritarianism, and I think you wouldn't be too.

~~~
notahacker
The argument that passing a constitutional amendment using the approach to
constitutional amendments set down in the original constitution is a "wanton
approach to the legal system" is ridiculous.

~~~
tathougies
I don't think it's ridiculous at all. I never said it would be illegal, I said
it would demonstrate a lack of care and consideration -- like Prohibition
(also passed legally, without doubt).

~~~
notahacker
And the original constitution's treatment of tax apportionment expressly
acknowledged slavery as a legitimate practice. So perhaps a constitional
amendment process can do good things too!

Back in the real world, the federal government has always used its
constitutional entitlement to tax people, and despite your clearly bad faith
insinuations, the Sixteenth had absolutely no impact on its [in]ability to
take the possessions of the poor whenever it saw fit or implications for
search warrant seizures. What the amendment _actually_ did after nearly two
decades of careful consideration and public debate was remove an odd quirk in
the constitution whereby in the eyes of the Supreme Court the federal
government could directly tax individuals and companies as much as it liked,
but only if the total amount contributed from a state was proportional to its
population (which made assessing direct taxes based on variables like incomes
and corporate profits rather than fixed things like the right to vote
difficult).

If your definition of the difference between a "liberal republic" and an
"authoritarian state" is based on whether the constitution mandates that the
quantity of direct tax collected in each region is proportional to its census
counts, you _really, really_ don't understand the concept of liberty.

~~~
ahazred8ta
No, the 'odd quirk' was that it explicitly required that the tax money from
each state be earmarked, held in a separate fund, and only spent in the same
state that the tax was originally collected from. FWIW you could buy stuff in
each state and send it to DC, but you couldn't use the money to pay salaries
in DC. Partly it was intended to prevent a donor state / receiver state
situation -
[https://www.theatlantic.com/business/archive/2014/05/which-s...](https://www.theatlantic.com/business/archive/2014/05/which-
states-are-givers-and-which-are-takers/361668/)

------
CryptoPunk
The more governments try to control the economy and the flow of capital, the
more inefficiencies and unintended consequences will be created.

The entire offshore investment market only exists as a result of high tax
burdens. Economic resources that go to sustaining that industry would be
better spent expanding production of goods and services that enhance people's
lives. The tax rates of major economies are far too high and beyond what is
optimal..

