
How to Hide a Billion Dollars: Three Techniques the Ultrarich Use to Dodge Ex-Sp - based2
https://www.forbes.com/sites/christopherhelman/2020/09/04/how-to-hide-a-billion-dollars-three-techniques-the-ultra-rich-use-to-dodge-ex-spouses-the-taxman-and-disgruntled-business-partners/#5b681a8a5994
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arminiusreturns
If are interested in this topic and you haven't seen the independent
documentary "The Spider's Web: Britain's Second Empire", you owe it to
yourself. It's a superbly done documentary on a budget of ~4k£.

[https://www.youtube.com/watch?v=np_ylvc8Zj8](https://www.youtube.com/watch?v=np_ylvc8Zj8)

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AmericanChopper
It's worth noting that this specific situation is only possible due to the
insane complexity of gift tax laws. Payments made into a trust are supposed to
be gifts, and taxed accordingly. However there's a number of ways to get
around this. This strategy doesn't work if you have to pay a 40% tax on
transferring your assets into a trust, and another 40% tax when you want to
transfer those assets into another trust.

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m3kw9
How is this legal at all: “ For example, it allows assets to be decanted from
one trust to another without any notice to beneficiaries who may be cut out of
the new trust. It also allows DAPT assets to be protected from alimony,
divorce and child support claims—so long as those claims didn’t exist when
assets were first transferred into the DAPT. ”

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FireBeyond
Because there are influential, and rich people who have a vested interest in
making sure "loopholes" like this. And when enough outcry is raised, if ever,
it'll be closed "just as soon as we can".

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unchocked
Awful tabloid theatrics aside, the story illustrates the serious point that
there is way too much opacity regarding money in our society.

Bring it all out into the sunlight. Then figure out what policy should be.

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lifeisstillgood
There are two approaches to this - one says something like "they have too much
money, tax it and spend it on the poor / shaping society". The other is "if
you stop people from earning bazillions you won't get innovation.

I am not a fan of either particularly (well _of course_ we want to tax people
and spend it to create a better society, it's just that sentence is basically
all politics ever, not a specific policy to enact)

I prefer the idea that _a billionaire is a market failure_. It's not like
there are no millionaires looking up and going, well that guy deserves his
wealth and I am just going to accept my lot in life"

If we see a billionaire in a given industry - let's ask "what regulations will
they really really hate to see removed or created?"

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crazygringo
> _I prefer the idea that a billionaire is a market failure._

Not at all -- the market is working exactly as intended (as long as it's not
coming from externalities, like pollution that's not being paid for).

What's failing isn't the market, but taxation. We should be celebrating
billionaires because they've succeeded in delivering better, cheaper products
than other people. But we should also be taxing them at 90+% by that point.

Again -- it's not market failure. It's taxation failure.

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maest
> the market is working exactly as intended

I'm not saying that's what you're saying, but a lot of people tend to treat
the market as intrinsically morally correct. As in, if something is the
outcome of the market working correctly, then that thing is the "correct"
outcome.

So, if billionaires appear as a result of the market doing its thing, then
billionaries are morally entitled to their money.

I'm not sure I buy that argument.

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crazygringo
I definitely don't buy it either.

The market has nothing to do with morality. It's simply a question of
efficiency: are people as a whole better off, utility wise? But as long as
everyone is making voluntary, non-coerced trades (labor for $, $ for
products), then by definition they _are_ better off. There's no moral aspect
to it, just economic efficiency/"progress".

But that doesn't mean you get to keep everything you make. The market is a
tool, not an end. If you kept everything, there'd be no taxation, no
government, no education, nothing else, and it _would_ be a moral disaster.
The moral element comes into play with taxation: because you (as a
billionaire) benefit _extraordinarily_ from the country's systems put into
place -- contract enforcement, courts, roads, education of your workers,
everything -- you are morally obligated to pay your "fair share" of that back.

The only people who claim people are entitled to 100% of the money they make
are a subset of libertarians/anarchists. It's not a very popular opinion,
since it makes society pretty much unworkable.

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pmontra
> But as long as everyone is making voluntary, non-coerced trades (labor for
> $, $ for products), then by definition they are better off.

Add "correctly informed" and "able to understand the consequences" to that
list.

Examples:

1\. Financial consultants propose to invest in high interest securities,
"trust me they are safe", people invest and lose the money.

2\. People lost years of life and tons of money commuting, then suddenly
discovered that they can work from home. Many businesses benefitted from that,
they are in trouble now. This at least was a common belief, shared by almost
everybody. Most of us were wrong though.

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taneq
Did businesses really benefit from people not working remotely? It seems more
to me like the problem was inertia rather than any zero-sum mechanic.
Switching to predominantly remote is benefiting everybody.

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RestlessMind
I support existence of Billionaires and even admire some of them, unlike the
left flank of the Democratic party. However, after reading such shenanigans, I
sincerely wish for a clean sweep for Democrats in the upcoming election, to be
followed by an intense crackdown on all the crazy loopholes used by the ultra-
rich to cheat on their partners or their governments.

Ideally, if the new crop of leaders have any balls, they would make a
prominent example of some asshole (Bosarge seems to fit that profile) just to
send a message to everyone else. This was one mistake Obama did, when he went
easy on all the Wall St idiots responsible for the GFC.

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srtjstjsj
What makes you think Democrats in government don't support billionaires?

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strathmeyer
Their tweets? The things they say to get elected?

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AnimalMuppet
I notice that you didn't say "the policies they enact when they get elected".

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julius_set
Think we need something better than the concept of money.

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newguy1234
Money is simply a tool used to facilitate the transfer of goods/services among
people. You can use cryptocurrencies just as well or you can use direct barter
but a common-use currency provides benefits that people enjoy.

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julius_set
I would say still thinking too narrowly, some interesting science fictions
novels had knowledge as a form of currency in some technocratic societies (The
Omar ~> Deus Ex Invisible War)

Not saying this is the best solution but again different form of “currency /
money.”

Imagine you are a human who is part of a hive mind, (think Deus Ex Helios AI)
you wouldn’t have a need for money.

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hn_throwaway_99
I'm sure not all the ultrarich are like this, but so often I can't get over
how truly _awful_ these people are, especially for a man who made his Midas
fortune in something that has no net benefit to society (yeah, yeah, liquidity
liquidity, blah, blah, still think it's total BS that high frequency traders
are anything but leaches on capital markets).

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fxtentacle
Oddly enough, the more tangible benefits to society a job provides, the less
it is paid for. It's almost like a "your job is not bullshit" salary
deduction.

From bakery to supermarket to food delivery, pretty much all of the people I
interact with daily are paid badly.

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hn_throwaway_99
Yeah, I have no idea what the solution is, but I was pretty down during the
pandemic that all the "essential worker" jobs that we truly depend upon, e.g.
delivery, grocery, sanitation, many (but obviously not all) health care
workers, etc., are paid shit, and further more often have to put their health
on the line to work, while honestly a huge number of highly paid tech worker
jobs (that now get to happen from the safety and comfort of home) could
disappear and society wouldn't notice.

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snarf21
We could get rid of capital gains tax and tax it as normal income. We could
also get rid of like kind exchange. This money could be used to lower or
eliminate income taxes for the poor. It is all about incentivizing how we want
capital to be invested for the benefit of society. Today we've decided that
shareholders are primary for public companies. The stock market is at all time
highs but it comes with a cost.

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innagadadavida
How about we abolish all taxes and just tax the total wealth? That will give
people the incentive to work as opposed to making a quick buck and retiring.

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bluedevil2k
How many people are looking to make a quick buck and retire? The people who
are billionaires are billionaires _because_ they are super competitive and
super hard workers. Gates, Bezos, Jobs - you think they worked 8 hours a day
when they were growing their companies? No, those guys are driven to succeed
and that doesn’t just go away when you make X dollars.

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dredmorbius
They're also, often or always:

\- Incredibly lucky.

\- Benefitting by an initial position of advantage. Most often family or
nation of origin, though gender, race, or religion also. "Winning the birth
lottery".

\- Benefiting by externalities.

\- Exploiting monopoly advantage.

\- (Frequently) Lobbying for advantage.

\- (Frequently) Engaging in illegal activities.

\- (Frequently) Engaging in unethical or exploitive activities.

There are numerous super-competitive hard workers who are not billionaires.
Some were unlucky, some born in the wrong place or time, some burdened by
consscience or ethics, some crushed by existing monopolies or entrenched
interests.

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bluedevil2k
I hate this argument. There are 20 billionaires in Africa, you’re saying they
had an advantage of race and country of origin? 4 in Vietnam. 6 in Peru. 27 in
Thailand. Your argument is another “blame the system / white men are evil”
argument that just doesn’t hold up when put against facts.

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hn_throwaway_99
> There are 20 billionaires in Africa, you’re saying they had an advantage of
> race and country of origin.

You conveniently skipped over the part where the comment you're responding to
said " _family_ or nation of origin". If anything, more billionaires in 3rd
world countries got their wealth through corruption and family connections.
Take the top billionaires in Africa:

1\. Aliko Dangote: see "Family and Personal Life" on his Wikipedia page, which
includes "He is the great-grandson of Alhaji Alhassan Dantata, the richest
West African at the time of his death in 1955."

2\. Nassef Onsi Sawiris: His Wikipedia entry starts with "is an Egyptian
billionaire businessman, the youngest of Onsi Sawiris' three sons". Onsi
Sawiris was a billionaire.

3\. Mike Adenuga is more self-made, but even then, "his mother, Omoba Juliana
Oyindamola Adenuga, was a businesswoman of royal Ijebu descent."

There are other more notorious examples from that list of billionaires, like
Isabel dos Santos.

I'm interested to see how you re-evaluate your argument "when put against
facts".

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dredmorbius
That, and also an "often or always" tied to the full list of qualifiers.

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bluedevil2k
“often or always” is a cop out for people who can’t decidedly prove a point.

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hn_throwaway_99
Lol, no. "Often or always" is used by people who realize the world is rarely
black and white.

It's weird, you're arguing against a point that no one else is making. Of
course there are many billionaires whose individual intelligence, innate
gifts, hard work and diligence were crucial to them earning their fortune.
Just as obviously as there are many billionaires who earned their fortune
through family, connections, graft, etc. (It's also pretty easily arguable the
majority of the wealthy earned their money this way, given that for every
"self-made" rich person there are usually loads more family
members/connections who inherit or benefit from that wealth).

But the larger point is that nobody makes their fortune in a vacuum - even all
these "self-made" rich relied upon the structures of their society to enable
their wealth accumulation, so it seems more than morally fair that that
society has a claim to some of that wealth so the next generation can reap the
same benefits. Just look at all the Internet billionaires, or billionaires who
rely on GPS. Both the Internet and GPS were created by the government, and it
seems fair to me that the government take a chunk of the wealth enabled by the
enormous investments into those systems.

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bluedevil2k
They’ve _aleady_ paid income tax to help pay for GPS!!

