If this is indeed for a tax dodge, what's funny is that the US Government helped fund Google. Or, more accurately, they funded the research into the seemingly esoteric problem that became Google;
> In 1995, one of the first and most promising MDDS grants went to a computer-science research team at Stanford University with a decade-long history of working with NSF and DARPA grants. The primary objective of this grant was “query optimization of very complex queries that are described using the ‘query flocks’ approach.” A second grant—the DARPA-NSF grant most closely associated with Google’s origin—was part of a coordinated effort to build a massive digital library using the internet as its backbone. Both grants funded research by two graduate students who were making rapid advances in web-page ranking, as well as tracking (and making sense of) user queries: future Google cofounders Sergey Brin and Larry Page.
> The research by Brin and Page under these grants became the heart of Google: people using search functions to find precisely what they wanted inside a very large data set. The intelligence community, however, saw a slightly different benefit in their research: Could the network be organized so efficiently that individual users could be uniquely identified and tracked?
Not to mention In-Q-Tel's investment into one of their key products, Google Maps via Keyhole. And DARPA's Grand Challenge that led to the Stanley car that was acquired and scaled up to make Google's automated car division.
Google has done an admirable job of taking Government sponsored R&D and maturing it into products. They deserve their success. But, in my opinion, the systemic lack of reinvestment into the pipeline that created them and their most successful products is equivalent to sawing off the branch that they're sitting on.
The US Govt couldn't have invented the iPhone or Google's search engine, but they did fund the first Integrated Circuits, the first IC-based computer, the internet, GPS, discrete problems in computer science involving searching large amounts of data, display technologies, battery technologies, MEMS sensors etc etc.
This is not a tax dodge. There is no way to dodge taxes as a US citizen by moving abroad, the US is the only country in the world with a real global taxation system.
EDIT
further information I posted below:
The US has the unique position of being able to actually enforce this due to the fact the USD is the reserve currency of the world and every country needs to stay on the good side of the US Treasury to transact in the global economy. FATCA requires all foreign financial institutions to report on any US citizen assets.
In fact, the laws are so strict, they make living abroad as an honest middle-class expat a total nightmare. I have friends who cannot find a single bank in their country that will work with them because of the reporting requirements of working with US citizens. They cannot save in foreign banks and they cannot invest either due to the US penalizing foreign Mutual fund/ETF purchases by private citizens.
I'm sure Erich Schmidt has access to resources not available to your friends. There is absolutely the potential for a tax angle to this application, perhaps involving creating business entities in Cyprus to avoid the IRS's reach. That is of course just my suspicion and I could be wrong, but I think my suspicions are reasonable enough to dispute the strength of your claims ("There is no tax dodge. There is no way to dodge...")
It's amazing to me how strongly people want to believe there's some magical way that rich Americans are avoiding taxes by hiding money in exotic locales.
This was possible in the past for Americans, but it doesn't make sense anymore. That's the truth. The secretive Swiss banks and numbered accounts you read about in adventure novels as a kid are all reporting on US citizens now.
It doesn't matter how much resources Eric Schmidt has, the US government has more resources and power than Eric Schmidt. Especially given he's a widely known public figure, he'd be the perfect target of any investigation.
US taxes are already extremely favorable to the rich. Do you seriously think he'd risk his freedom and reputation over something so stupid?
There is no "the US government has more resources" – like it's a big blob. It comes down to something like the IRS enforcement division, which is consistently getting kneecapped with budget cuts. So no, actually it really is between your 15 high priced lawyers and whatever team of 5 people the IRS has working your case with limited time because they're stretched thin.
FATCA compliance issues won’t just get the IRS on your back. You also have to deal with the US department of treasury.
The US treasury is not handicapped by regulation in the same way the IRS is. We’re talking extradition and jail time, not just having to pay back taxes.
The Venn diagram of banks where you’d feel safe storing millions of dollars and that would also be willing to help you defraud the US Treasury are exceedingly small. It’s just not practical.
> The Venn diagram of banks where you’d feel safe storing millions of dollars and that would also be willing to help you defraud the US Treasury are exceedingly small. It’s just not practical.
You only need 1. However, the solution isn’t to move money from your account to a bank which then hides what’s going in from the US government. The solution is to make a terrible investment say buying land from Bob for 10 million only to sell it to Sally for 5 million. Meanwhile an associate of Bob, Sally, or both moves 4 million to a holding company owned by you.
That gets 4 million in a secret account, let’s you offset capital 5 million in capital gains, and pays 1 million for money laundering.
Repeat as needed. Sure, 4 million in a hidden account is less useful day to day, but it’s insurance if you need to flee the country or happened to go bankrupt etc.
Your amounts are laughably low for the person who sparked this topic of discussion. Eric Schmidt has $14.2 billion dollars.
4 million in a stash account is nothing more than weekend
vacation money.
Let's be honest, for most people hiding your money from the government, just means you can't access it anymore---which makes it essentially useless to you. For the current day mega-rich, they don't have any ties to the maffia, or other shady operations that would incentivize them having black-money funds.
Re-invest your money for low taxes, pay your taxes, and you will still be a billionaire next year, and won't have to every worry about black helicopters snatching you from your yacht.
As I said repeat as needed, some people move billions using such methods over time. And yea, doing this to money isn’t as useful day to day again as I pointed out, but that’s not what it’s for. We are talking insurance not tax evasion.
It’s a mistake to think of Money as a fungible assets without any distinguishing characteristics. Set aside 10% in ultra safe investments and your protected from market crashes but not the government freezing your assets, bankruptcy, or your ex wife taking you to the cleaners. Schmidt would be a fool not to set aside ~50 million in some hidden accounts specifically because it’s a small enough amount as to be meaningless today, but plenty of money to hide out comfortably in a non extradition country.
FATCA doesn't create tax obligations it has nothing intrinsically to do with tax it has to do with financial transparency, which yes can help to catch people who are evading tax but if you're structuring your affairs legally FATCA has no impact on your taxes.
I'm not claiming he is _definitively_ doing so, even just in part for tax purposes. Nor am I claiming he is not already able to use many advantageous tax loopholes in the US.
I only claim two things. One, that by most reasonable definitions, Cyprus is a tax haven -- there is even a recent sordid history there, exposed in The Cyprus Papers. And two, given tax havens are often used as a means to minimize tax in transferring wealth from one generation to the next [0] among other things, I think it's a dubious claim to say "There is no dodge" as you have so unequivocally done.
[0] Via Panama and Jersey, not Cyprus, but for example these schemes were used by David Cameron's father, and by Jimmy Carr before he bowed to public pressure -- all quite legal and non-magical, and I'm sure US citizens could use similar schemes, in spite of their global reach. https://www.theguardian.com/politics/2012/apr/20/cameron-fam...
A casual search shows that plenty of tax advice and preparation organizations think Cyprus is a tax haven. And The Cyprus Papers show that the local authorities likely intentionally failed to enforce rules regarding PEPs. A culture of intentionally weak enforcement makes Cyprus an even more advantageous haven.
Yes and no. US taxes favor certain types of wealth accumulation and wealth accumulation over income. But US taxes aren't particularly good to the rich, certainly not by global standards and certainly not in many states.
There absolutely are sophisticated tax structures both domestically and internationally that do require a certain degree of scale to benefit from them, though past a certain point make less sense.
Wouldn't he be able to form business ventures in Cyprus in which he could own a stake, but which would pay him very little taxable income? Furthermore, wouldn't he be able to grow those ventures and later take a distribution when his pals in US Congress abolish the "global taxation" nonsense? Or alternatively, by renouncing US citizenship?
What other reasons are there to seek citizenship in a country like Cyprus?
He can set up business ventures in Cyprus regardless but that wouldn't help him much in most cases as he's then going to trigger all the controlled foreign companies rules and if he renounces his US citizenship he's over the $2 million asset threshold so he'll have an exit tax, I think it's highly unlikely he'll ever do that, though he might be setting up his family members to do so since under most of these programs you get citizenship not only for you but also for your family.
Someone in Eric's position will most benefit from the use of trusts and charities to improve his tax position.
But Cyprus citizenship has tons of other advantages:
1. Having an EU citizenship allows you to live and spend an unlimited amount of time in any EU member state vs 90 days out of every 180 days for a normal American so if he wants to retire to a beach in Spain for 5 months at a time he can't currently do so but this will allow him to
2. It gives him visa free travel to various parts of the world that he might not otherwise have, most notably Russia. If you're in Eric's position and say you want to do some business and investing in Russia the hassles related to travel might not be worth it for you and it makes it so much easier if you've got a second passport that allows you to go without issue
3. As mentioned you're setting up your family for a future with more options
As an aside, BTW, I would not recommend setting up any business ventures in Russia at the moment. Rumors have been swirling that Putin has Parkinsons, and will announce his departure in January. Kremlin denies, of course, but Duma (Russian parliament) is currently working on legislation granting former presidents _very_ broad immunity even after the presidency ends. The fact that they're working on something like that with like 4 years to go in Putin's presidential term is unlikely to be a coincidence.
A lot of European states have a wealth tax as well as estate tax, which is not a good thing for an old dude worth $17B. Heck, it's not even a good deal for someone like me, if you run the numbers.
Coincidentally, Eric Schmidt was a big supporter of Biden's plan to "tax the rich". The _other_ rich, that is, not himself, of course.
Um, I don't think they do (I am from UK living in Germany). "Spain, Norway, Switzerland, and Belgium"[1] have a wealth tax, Switzerland is not in EU. So 3 of 27 EU nations have wealth tax.
I would say Norway is an outlier too due to oil revenues and other quirks. The only large nation in that list is Spain.
> There is no way to dodge taxes as a US citizen by moving abroad
Well, no way to "legally avoid"; "dodge" is broader, and there are probably many ways of dodging taxes that are easier if the institutions you deal with in your daily life aren't subject to US jurisdiction and regulations designed to expose tax evasion to US authorities.
Also, typically you want to have at least one national citizenship, so if you are planning to legally avoid US taxes by renouncing US citizenship, getting some other citizenship is usually step one.
Of course, there are other reasons it is convenient to have citizenship in an EU member state, even if you are a US citizen, so its not necessarily step 1 of a tax dodge.
Every single financial institution that transacts in US dollars (so, all of them) is subject to the power of the US Treasury.
So many people want to believe all the rich are hiding their money abroad.
For American citizens, this simply isn't true and hasn't been for a decade or more. It's not feasible. Also, American capital gains taxes (the ones rich people mostly pay) are extremely low compared to most places in the EU anyways. Its not worth the risk even if you can find a nefarious organization to help you do it.
There was a surprising low number of Americans in those documents, which date back into the 1970s. In 2010 there were significant changes in US law which effectively removed places like Panama papers from happening again moving forward.
These are the reasons the poster above you stated the decade limitation. He is correct.
Renouncing US citizenship makes you pay taxes as if you sold everything you owned on that day and then died (or something close to that) - it doesn’t help you with any past profits (n fact, likely to harm) though it might help with future profits if you moved to a lower/different tax jurisdiction.
It used to be possible. Ted Arison renounced his US citizenship when the end of his life was visible, thus avoiding estate taxes. This prompted an immediate change (you are a US tax payer for 10 more years after renouncing) and later redone with the current “you are dead to us” treatment.
Eduardo Saverin took a bet with FB: he renounced, which set his tax obligation at X. Then FB went down, which meant he had to pay a larger percentage of his wealth. But then FB shot up significantly, so he ended up saving much on taxes (as to whether he did this to avoid taxation is not settled - he naturalized in Singapore which does not allow dual passports. Arison moved to Israel which does, so it was clearly a taxation avoidance plan)
USA expatriation taxes are quite steep. I'm not a lawyer, but I believe that all unrealized gains of all assets are taxed upon exit as if the assets were being sold. Further, I think that income generated by through US companies (like investments) are taxed as US income for ten years after renouncing citizenship.
Also, forget about coming back (say for a friend's wedding or an important medical procedure), the laws assume that high net worth individuals are leaving to avoid future taxes.
Also... if the renunciation is motivated by avoiding taxes, the person is banned from re-entering the USA.
excerpt[1]: If the Department of Homeland Security determines that the renunciation is motivated by tax avoidance purposes, the individual will be found inadmissible to the United States under Section 212(a)(10)(E) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(10)(E)), as amended.
EDIT REPLY to : "Would they have to prove intent?"
Probably not because granting admission into the USA of a non-citizen (ex-citizen) is at the discretion of the Executive Branch of government and doesn't go through "due process" of any court system. So no "burden of proof" required.
Then COVID is the perfect cover for shifting citizenship. It gives a plausible non-tax reason for making the change.
Someone who is worth $15B would be very well-advised, and if he's been thinking about doing this in the past, his advisors may have decided that now is the right time to pull the trigger. Also helps to have plenty in the news these days, to avoid becoming 'the story' on a slow news day/week.
You got it — the timing is good for this step, which is adding a new citizenship. Then he can drop his US citizenship in the future, after his new one is established.
Absolutely. Im just saying Schmidt isn't an idiot and probably has his taxes in order. This Cypress citizenship might be an effort to evade taxes but I would be surprised if that was the major reason.
My guess, ease of movement in the EU for him and his kids.
When you've got Eric Schmidt money, you probably want to have the ability to live and vacation anywhere you want, whenever you want. Otherwise you're limited to 90 days in the EU at a time as a tourist.
There are many EU countries that have some type of golden visa, but for a citizenship Cyprus is the fastest one - AFAIK you can get it in 6 months if you invest $2m. The other countries require years of stay for citizenship.
I doubt this has much to do with tax, or that he is about to renounce his US citizenship. It just makes it easier to stay and live in the EU (with family) for extended periods of time, nice extra passport to have if money is no object.
I think Cyprus has come under fire for this so unsure how long it will last.
“Middle class” is a very vague term; I assume in this case it refers to people rich enough to have a “nice bonus” from their investments, but not rich enough to actually live off their investments.
For this group, I can believe it’s awkward and annoying, mainly because I am in it and I find investment T&Cs (and the consequences of being wrong) scary and confusing. However, I would not use the word “draconian” — I take the view that paying my taxes buys a civilization to live in, and that this is a very good deal.
> I take the view that paying my taxes buys a civilization to live in, and that this is a very good deal.
That is a fair way to look at it, but I'm sure you agree that salesmen of all kinds love when people have that view, since it's easy to get them to wildly overpay for a product.
I'm not against taxes, it was my cynical way of expressing that it is impossible to evade them for most people while it is quite easy for those who already have more than enough.
In which case you pay an "exit tax" equivalent to the tax hit from liquidating all your assets, e.g. capgains on all held stock.
Renouncing citizenship never works as a tax dodge, unless you have some reason to expect large future gains in your assets that aren't reflected in their current market prices.
Unlike Schmidt, Saverin was not born a U.S. citizen. He only became a U.S. citizen when his parents emigrated to FL during his teenage years.
Also, unlike Schmidt, Saverin has spent most of his adult life actually living outside of the U.S. and had been living outside of the U.S. for years before finally renouncing his citizenship.
> Renouncing citizenship never works as a tax dodge, unless you have some reason to expect large future gains in your assets that aren't reflected in their current market prices.
It also could make sense if you expect future income tax rates to be much higher, or if you expect new taxes (e.g., wealth taxes) to be enacted.
US long term capital gains taxes are between 0 and 20% [1].
The popular definition of a bear market starts at 20%; if you are really bearish, you might "expect the S&P 500 to lose about two-thirds of its value over the completion of the current market cycle" [2].
Either way, giving up 20% of your gains beats losing between 20% and 66% of your entire holdings (initial investment + gains).
Regarding derivatives, they are (1) not free, (2) of limited duration [3] and (3) only as good as the counterparty [4]. They can make sense if you have good reasons to expect a short blip. The longer and deeper you think the downturn will be, the less useful they become.
This is not a tax dodge. There is no way to dodge taxes as a US citizen by moving abroad, the US is the only country in the world with a global taxation system.
It’s not to avoid criminal justice either as Cyprus is a lapdog to the US for extradition, same as the UK is.
This in itself is not a tax dodge but if he wanted to this would set him up to be able to renounce his US citizenship and still have a good passport much like Edwardo Saverin and others.
Even with the possibility of traveling all the time as long as you aren't on the mainland for 6 months, Puerto Rico is just not attractive enough.
Everyone I know that was trying to take advantage of Act 60 (previously Act 20 and Act 22) all left when the COVID pandemic started. It was just too clear that the infrastructure was too poor.
Sort of. Giving up U.S. citizenship comes with an expatriation tax [0] on all assets including foreign assets. The purpose of this tax is to deter people from renouncing citizenship and then selling off assets while avoiding paying capital gains on them.
So expatriation can protect you from paying taxes on capital gains from future assets, but it doesn't do much to protect you from capital gains on assets you currently own.
> In fact, the laws are so strict, they make living abroad as an honest middle-class expat a total nightmare. I have friends who cannot find a single bank in their country that will work with them because of the reporting requirements of working with US citizens.
What? This is not true at all. Getting a bank in most other countries is not hard at all and certainly not a "nightmare."
As a U.S. citizen you must still file taxes and an FBAR that merely reports your assets in foreign accounts, but I've never seen a bank have any problems opening an account for an American, in any country.
Then you didn’t look. There’s some rule from the ‘1940s which says only a SEC-licensed broker can manage securities for a US tax payer. It was mostly ignored outside the US until 2010 but since then, together with FATCA, is very much enforced.
Most of my US expat friends are lucky in that their local banks will let them have a checking account and sometimes even a savings account, but no other services are available to them. (And no local brokers would touch them with a 10-feet pole).
>Most of my US expat friends are lucky in that their local banks will let them have a checking account
No, it's not luck. Getting a bank account is not the chore you are making it out to be. A securities broker for trading stocks -- that I have never tried -- but when it comes to opening a regular bank account, there are no major hurdles whatsoever. Your expat friends, assuming they are living legally in another country, got bank accounts because it is easy to do, not because they were lucky.
The one exception to this would be those living in another country without any formal residence permit, then in that case, it would be problematic in any country since you are technically not allowed to actually live there and many countries do not allow that for citizens of other countries (not just the U.S.).
I've lived all over the world and I have never known a single person in the American expat community who was denied opening a regular bank account anywhere -- again, assuming they were legally living in the foreign country.
I have known. Totally legally residing expats. Everyone who persevered was able to get one, but some gave up after 4 months of back and forth of increasingly onerous requests.
And none of them was able to get any reasonable saving rate - saving accounts pay less than local government bonds in just about every place, but the most anyone was able to get was a savings account with low interest (and in some cases, not even that).
I have a friend in Israel who was born in the US, and has a US passport, but has not set foot in the US since age 6 (40 years ago). It didn’t matter in the past, but over the last 10 years he has been increasingly told to take his business elsewhere by every financial institution; big banks will do checking and saving. Nothing else is allowed.
There is definitely more to the story than either you are telling or that you know. I am certain of that.
Also, this:
> And none of them was able to get any reasonable saving rate - saving accounts pay less than local government bonds in just about every place, but the most anyone was able to get was a savings account with low interest (and in some cases, not even that).
Has nothing to do with whether you can open a bank account, and is an entirely different topic. In the Netherlands for example (and most European places), all regular bank account offerings are the same for all residents, regardless of their actual citizenship.
Oh, the offering is the same. But you can get up to 0.5% more buying a government bond than the (equivalent, risk wise) bank deposit - except that due to SEC rules, the local bond purchase is unavailable to US taxpayers (even if they are also local citizens). In that sense, is taxpayers (even if they hold a local citizenship) are discriminated against.
And no, at least in Israel, there isn’t any more to the story. Each of the big three Israeli banks have paid between $400m and $900m in fines for noncompliance with US law, and as a result they offer the minimal services they can without getting sued. I’ve heard similar stories about places in Europe where I am less familiar with the details, so I won’t say it’s necessarily the same in Europe - but in Israel, that’s most definitely the case - and I heard it from both customers and bank officers.
> Getting a bank in most other countries is not hard at all and certainly not a "nightmare."
I don't know about "most" countries, but my American colleagues in Germany and Switzerland complained about the difficulty of doing anything related to finance (banks, brokers, taxes) because of their extra tax liability. I personally had to sign quite a few forms certifying that I am not a US citizen or a greencard holder or in any other way tax liable in the US, so it does seem to be a big deal.
The original thread was about finding a "single bank" and in that regard, it is not a problem to open a bank nearly anywhere, including in Europe (assuming legal residence there). Brokers, that might be a different matter, if you wish to trade European stocks from a European account. Taxes can be the added hassle of having to file in the U.S. regardless of where you live, but we were originally discussing getting a bank account, which is straightforward.
You're right, they can't find a bank because they don't have a visa that allows them to work. It is common for people to say they "live" somewhere while doing visa runs, leaving and re-entering the country, in order to remain.
It's unfortunate that this statement [1] is so prominently placed in this thread. That's social media for you I guess.
[1] "I have friends who cannot find a single bank in their country that will work with them because of the reporting requirements of working with US citizens"
Yeah Americans in particular are famous around the world for choosing to live in places they have not tried to legally reside in, and so much of these anecdotes are likely coming from stories like that.
Even in the U.S. it can be very hard if not impossible to open a bank account with an American bank if you are not legally living there, so the shoe fits on both feet.
Isn't it a bit of a stretch to connect funding that eventually indirectly lead to Google, with someone who was the CEO for 10 years (not even since inception)?
Google itself is still an American company paying taxes, Schmidt hasn't been the CEO of Google for a decade, I don't see why that's related. By that logic you could also say that the US Gov also helped pay for his high school or even kindergarten maybe.
I'm not really taking a side here, but it seems like your argument is a bit too broad.
This is very misleading. US government heavily taxes people and organizations and spends on certain projects. But if people had more resources left to themselves, they could spend some of it on the same projects US gov spends it on.
On top of that, US gov has all kinds of laws and regulations that make it difficult to do certain valuable things. For example, if companies in the same industry come together to do something valuable, they might break antitrust laws.
Government might also make it prohibitively expensive to do something and then they step in to do it themselves - you see it with pharma research.
> This is very misleading. US government heavily taxes people and organizations and spends on certain projects. But if people had more resources left to themselves, they could spend some of it on the same projects US gov spends it on.
The burden of proof for that is on you. Where did it happen like that in recent history ? Even in Germany and Japan two other powerhouses of research in the world, it's greatly helped by the fact that public research (funded by the state) and corporations are intertwined. I'm French, our best years for innovation were during our glorious 30's when state was directing mainly state corporations (telecom, energy, aerospace) to do long term research. When it was privatized due to antitrust pressure by the EU, all that was killed (see how much telecom technology came from the CNET/Alcatel, even one of the Internet primary idea, packet switching, came from a French researcher of this era).
I'd strongly question the witch words 'heavily taxes'. The US federal government has some of the lowest income tax rates (both stated and effective) in the Western World [1]. And it's corporate tax rate is only slightly higher than the EU average [2], while in practice easily avoided [3] by large corporate entities like Google and Amazon.
But you have to add state taxes - in NYC and CA the state+federal is comparable to European taxes: and in Europe, those taxes include healthcare and academic education, which you pay for independently in the US.
For companies. The same is not afforded for individuals. A minority of states have no state personal income tax - and in those states, the effective top bracket is indeed ~30% lower than the European average - but these cover a small percentage of the population. NY and CA have rates of 10-15%
>But if people had more resources left to themselves, they could spend some of it on the same projects US gov spends it on.
With your assertion in mind: there were plenty of wealthy people in the US in the early 1990s so why didn't they fund the nascent Google project? You'd think anyone would love to be the likely majority owner of Google.
There are tons of people and companies currently investing in these things. The venture capital industry in the US is huge, and in fact you’re writing this on a website run by one of its representatives. The US Government has surely invested in some beneficial research, but so did the private sector.
> There are tons of people and companies currently investing in these things.
Yes, there are tons of people and companies currently investing in these things because earlier government investment proved those things possible. It would be irrational for a private company to invest time and money in something with knightian uncertainty.
The private sector is good with scale and incremental improvements. Quite bad with fundamental research.
Elon Musk is funding a space program to put people on Mars via SpaceX. NASA has not improved rocket technology since the 1970's and SpaceX is on track to have a fully reusable rocket the size of the Saturn IV in the next few years and people to Mars not long after.
> The injector at the heart of Merlin is of the pintle type that was first used in the Apollo Lunar Module landing engine (LMDE).
> To meet that need, in 1994, just as Fastrac was getting underway, Majumdar began developing the Generalized Fluid System Simulation Program, or GFSSP, which was first used by the Agency’s analysts in October 1996. NASA employees used the software for the Fastrac turbopump, and even though the program was cancelled in the early 2000s, the turbopump became the predecessor for others like it, such as SpaceX’s Merlin rocket engines, which power the company’s Falcon 9 commercial launch vehicle.
> The basic principles of the Fastrac design (namely, a pintle injector and ablatively cooled chamber) lived on in SpaceX's Merlin 1A engine, which used a turbopump from the same subcontractor.[18] The Merlin-1A was somewhat larger with a thrust of 77,000 lbf (340 kN) versus 60,000 lbf (270 kN) for Fastrac. The same basic design was capable of much higher thrust levels after upgrading the turbopump. Variants of the Merlin-1D achieve 190,000 lbf (850 kN) of thrust as of May, 2018,[19] though the combustion chamber is now regeneratively cooled.[20]
> Hackler: Did NASA share any technological types of lessons learned that influenced your vehicle?
> Giger: Yes, Mike Horkachuck and Warren Ruemmele were very good about looking at our system, seeing how it was similar or dissimilar to Shuttle, Apollo, Mercury, Gemini, any other program in history, and trying to share those lessons learned. For example, parachutes. We were able to get a lot of data from the Apollo Program, from the Orion Program even, and leverage lessons learned from them on that.
> A lot of joint technologies, too. We learned about PICA, Phenolic Impregnated Carbon Ablator tiles that we use on our heat shield, which was originally developed in conjunction with NASA. We learned a lot from how they did that, and they helped us bring that technology in house, which was great. Now we build our own variant of that in-house. There were numerous kinds of examples of that, where they shared technology or lessons learned that we then either incorporated in the design, or took that technology to the next level here, which was great.
Much of the materials technology, engine design, engineering simulations etc. at SpaceX were derived from NASA expertise and knowledge. Furthermore, this was all done largely on NASA's dime. NASA gave SpaceX an extremely favourable deal and is its single largest investor.
> Fourth, we took no equity. The reason the decision was to take no equity was that in the world of venture capital, sometimes you make poor investment decisions and you get no money back. Sometimes you make really good investment decisions, and you get five times your money back or ten times your money back. But you almost never get one time your money back.
> I knew enough about the federal government to know that if you invested money and you got none of your money back, everybody would get angry. But it also turns out that if you invest money and you get five times your money back, everybody gets angry too, because then you’re competing with the private sector. There’s no way that when you’re doing innovation like this you could expect that you were going to get one times your money back. That’s just silly. It was better to take no equity at all.
So NASA gives them access to technological expertise + historical engineering data + designs + prior NASA IP, gives them cash for development, takes no equity, let's SpaceX retain IP, and provides a guaranteed market.
SpaceX is doing incredible work and they're bringing these technologies to the market. They're making the sexy iPhone from the unsexy fundamental science done by NASA for them, and this development is being mostly funded by the tax payer, with nominal (up to 30% to 50%) private contribution.
I would hold them up as a model for how to blend the best elements of public works & private enterprise, and a model on how to do public-private partnerships.
Not only did NASA help create and enable SpaceX, they were one of the primary early customers, with about half of SpaceX’s revenue coming from government contracts. [1] Apparently government is involved with all space entrepreneurship to some degree or another.
One thing that people also aren’t pointing out is that Space is considered a multi-trillion dollar market for whoever can access it due to the Wild West “if you can reach it, it’s yours” resource policies, which is why it attracts so much investment for long term projects. Many sectors that need investment in fundamental research don’t have those properties (untapped, unclaimed resources you can look to the sky and see), and therefore don’t attract the same kind of money.
Except, they don't. Mostly because of the "incentives" that Eric Schmidt mentioned. Science has always happened at the public purse for a reason - the timeline for returns is so unclear, and the timespan for fruition is so long that most people don't want to invest in this kind of science, rightly so.
Goddard's research, or heck even the Wright Brothers, to go from a smidgen to the Saturn V or Boeing 737, took decades of funding and research over time spans that are just too long for most investors and human beings.
I know some contemporary investors are trying to be ambitious and change this, which is something I applaud them for. But their inputs are still focussed on bringing technologies to commercialization, not the greenfield research needed to produce the next paradigm.
For example, during the US' Apollo Program, the necessity of a lightweight, power-efficient, and resilient navigation led to a radical design proposal that suggested a computer designed entirely out of Integrated Circuits (ICs). At the time, the IC industry had barely entered its cradle, with the "monolithic concept" having been invented less than 2 years before the proposed design. The Apollo Guidance Computer was the technology's first major application and became the first computer built from Integrated Circuits.
But the technology was too immature. They just didn't have production processes that could produce ICs at any level of reliability. It took nearly 5 years of collaboration between NASA, MIT, Fairchild Semiconductors, Texas Instruments, and others to create scalable and reliable processes to bring the Integrated Circuit concept to the mass production.
During this time, the Apollo Program consumed nearly 60% of all production capacity in the world. Without this effort, the advent of the personal computer would likely have been pushed back by a decade or more, due to low general interest in the risky new technology.
There is an easy test for this assumption. Apple has $192.8 billion in cash on hand. What exactly is it doing with this money? Is it spending it on fundamental research in optics, laser communication, optical computing, and other stuff? No, it's not. Apple invests about $16bn a year on "R&D" which includes new product development and seeking marginal gains for production processes. Even here they do so with the help of Government funding. Yes, Apple applies for Government grants and R&D tax incentives.
What about Google? They had Google X, but it was short-lived, and they've broken up their most ambitious projects (which now seem to be withering). These projects will be dead far short of the multi-decade timeline needed to bring things to fruition. And they have $120 billion in cash lying around.
Google's pattern seems to be, they make a flashy announcement, and then they bail from putting long-term, significant capital where their mouth is. Take Calico for example, what's going on there? It seems to have a foot in the grave, and it's less than a decade old.
This isn't Google's fault, it's what investors want. They just aren't patient enough for Google to deploy the unproductive capital they already have into long-term research;
They don't see it as an investment into the future. They see it as a "money losing segment".
There will never be groundbreaking photonics Google research or a Google particle accelerator, simply because the "incentive structure" won't allow it.
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This fact translates geographies.
Furthermore, do people in low-tax jurisdictions and countries do more groundbreaking R&D? Places like Singapore and Hong Kong? As far as I can tell, no, they don't. Even there, what little research that gets done is on the taxpayer's dime.
This pattern has repeated itself across history & geography. There must be a reason for it. Saying that it's because Government takes away money and creates pressure on corporations + individuals which forfeits such private efforts denies the reality;
With few exceptions, almost every single breakthrough from the discovery of the Americas to the first computers has occurred on the taxpayer's dime. Or, more accurately, it has been performed by organizations who can afford to have some goals on decades-to-centuries long time horizons.
It is important to realize this dichotomy to understand why public funding matters, and why even today, for the pharma industry, the vast majority of targets and agents being tested have been/were funded/identified with public money.
> Apple has $192.8 billion in cash on hand. What exactly is it doing with this money? Is it spending it on fundamental research in optics, laser communication, optical computing, and other stuff? No, it's not.
Most of Apple’s “cash” is invested in corporate bonds, which allow other companies to access capital in order to expand their operations and grow their productivity, and most of the rest is in government bonds, which allow the government to make up for the shortfall of the “public money” you talk about. Sure, Apple might “only” spend $16B on R&D, but rest assured, they aren’t just sitting on their cash pile like Scrooge McDuck, instead it is efficiently used by many different actors.
Yes, Apple runs the largest hedge fund in the world, but the question isn't whether they're getting some return on their investment (I'm assured that their hedge fund is). But rather, where's the long-term research that's necessary for future growth and human prosperity?
If the logic of the comment I was replying to held, then Apple would be investing a commiserate amount into fundamental research. They're not. They'd rather seek a return (however, meagre) by buying bonds than fund research.
These bonds do fund growth and research, though. Why do you think the companies issue bonds in the first place? Same with governments: if you think buying government bonds is such a waste of money, why don’t you blame more the government for wasting it instead?
I do not wish to dismiss your arguments and concerns. But the argument that you’re making is a circular one. I have attempted to demonstrate how prima facie “corporate R&D” is often product development, process improvement, or other marginal improvements to preexisting technologies.
For example, Apple invests in metallurgy, it has the world’s largest private metallurgical lab, but Apple isn’t seeking to create metamaterials but rather to gain marginal improvements in glass manufacturing.
These improvements matter, but they aren’t the ones that drive our technology forward. Iterating on better compound bows wouldn’t have led to gun powder.
The places where Apple buys corporate bonds and assets from use those assets not to research breakthrough, but rather fund their growth. This money goes into advertising and other more mundane activities. This does not diminish the value of these activities, but it is a simple statement that humans can’t progress if we keep our gaze focused on such narrow gains.
AFAICT, no private or publicly traded corporation has created and ran a particle accelerator to investigate new principles of physics and improve our models of reality.
Why not? Because the ROI for that wouldn’t accrue to the discoverer, but rather some future generation. The aristocracy i.e. the feudal form of government + tax collection, the Duke of Devonshire, funded the creation of the Cavendish Laboratory, which funded J.J. Thompson’s discovery of the electron.
The Cavendish Lab revolutionized our understanding of matter before the start of the 20th century, and laid the theoretical foundations for the electronics revolution to come.
Many corporation do in fact perform basic research. Maybe not of the "particle accelerator" form that you ask for, and most likely less than what you'd want, but it does happen. I don't think a list of examples would change your opinion, so let's just leave it at that.
You are of course right that most of the benefits of new discoveries is of the form of externalities that don't get captured by the discoverer, or patent holder. Moreover, as you point out, we haven't seen too many fundamental, revolutionary discoveries as we've seen in first half of 20th century, to come from private labs recently. That's all true, but my response is that we haven't seen much of those recently from state-funded labs either. Science productivity per dollar is falling all around the globe, even as research spendings keep growing. Maybe there simply aren't too many science revolutions left to have?
If you don't agree with the above, and believe that there's a huge research opportunity with great ROI for society at large, why focus your ire on Apple? Why not blame the government that in your view is supposed to be funding that? Why not reduce hundreds of billions US government is spending on, say, healthcare, and instead spend that on fundamental research if it's as huge ROI as you believe it is? California has great history of publicly funded research institutions, why not just tax Apple more and spend the proceeds on fundamental research? The answer is, of course, that if California did actually tax Apple more, the resulting revenue would fund teacher's pensions and some other high speed rail to nowhere, and even less of the Apple's pile of cash would get used for research than it is when Apple is buying corporate bonds.
The truth is that fundamental research is hard, and spending more money would not necessarily bring better results. The incentive structure of doing science on public dime is already broken as it is, and there's no clear way to fix it. Focusing on that would bring bigger ROI than throwing some of Apple's cash pile into fire.
> I don't think a list of examples would change your opinion, so let's just leave it at that.
They would actually, and it would be of significant interest to me as I've been involved with SME/corporate R&D incentives in the past.
> If you don't agree with the above, and believe that there's a huge research opportunity with great ROI for society at large, why focus your ire on Apple?
You have misjudged my tone. I am not angry with Apple. I'm using them and Google, with their large cash piles as practical proof points.
I don't blame them for what they're doing. Do I wish that people were more responsible, over all, in giving back to the system? Yes, absolutely. But I don't feel particularly angry over it. It would be a waste of my energy.
> Why not blame the government that in your view is supposed to be funding that?
Except I'm not looking for anyone to blame. It feels like to me, and I might be wrong, that you're approaching this from the perspective of someone trying to find fault. That's not my goal here.
My goal is to point out what works and what doesn't. We've found that, historically, the public purse has furthered the long-term goals of humanity.
And that private enterprise has helped to mature technologies from the lab and turn them into usable products.
It is clear that one cannot function without the other. Sadly, in the US, right now, there's a preference to overstate the achievements of the latter over the former.
> Why not reduce hundreds of billions US government is spending on, say, healthcare, and instead spend that on fundamental research if it's as huge ROI as you believe it is?
Once again, this is a false dichotomy, and it feels - again this is subjective - like another way to find blame. First off, healthcare is important too! We can think of this as the Eisenhower Matrix,
Healthcare is Urgent & Important. I'd say it's absolutely critical for the functioning of a broader free-market economy, as people dying from disease usually don't have the cash to spend on apps, new TVs, and nights out.
Can the US healthcare system be reformed? Absolutely. Should it be reformed? Yes. Does that mean we should stop doing it? No, of course not. Not only would it be cruel, it would be counter-productive and would send us back the dark ages.
Fundamental Research is Not Urgent & Important. There needs to be a balance between it and the rest of the concerns. Where this balance exists is a question that requires further analysis and careful study. It's not something I'm qualified to do alone.
> that if California did actually tax Apple more, the resulting revenue would fund teacher's pensions and some other high speed rail to nowhere, and even less of the Apple's pile of cash would get used for research than it is when Apple is buying corporate bonds.
[Citation Needed]
That being said, the "pensions" that you talk about are just another bond holding entity, exactly like Apple with payouts based on returns.
As for the high-speed rail fiasco, yes, that's troubling and a significant issue to solve. It's one of many issues to solve, but saying that we should underfund our public institutions because we the citizens didn't hold them to account doesn't make any sense.
The answer isn't either/or. I don't understand the split you're trying to make here.
> The truth is that fundamental research is hard, and spending more money would not necessarily bring better results. The incentive structure of doing science on public dime is already broken as it is, and there's no clear way to fix it.
Sure there is,
- Open access to research + data
- Reinstatement of Tenure
- Providing "Carte Blanche" grants for tenured professors
- Using one of the trillions of proposals on how to reform the grants system
- Making institutions such as the NIH more independent from Congress
- Shifting appropriations from a line-item model to a CERN-styled model where organizations like DARPA, the NIH, NSF etc receive a fixed amount per year, indexed to inflation that they can spend however they like to their expert discretion.
That is indeed the libertarian argument against public spending on research and innovation. The book I linked to provides a compelling counterargument to it. I suggest you read it, if you're interested in this sort of thing, as it's a good read on the matter of public funding for innovation.
" If this is indeed for a tax dodge, what's funny is that the US Government helped fund Google. Or, more accurately, they funded the research into the seemingly esoteric problem that became Google;"
Boom. We have someone that knows what they are saying. Yes. It is a tax covered shell. Wonder why your $23.29 check from google for 1.2 million impressions is coming from Ireland?
The question, then, is why we bothered effectively handing Page and Brin free startup funds without claiming any IP or equity stake in the resulting products, then act surprised when they don't want to pay taxes on the money they made.
Because that would defeat the point of the basic research - for it to be used and it isn't exclusive to the two even though they were the most signicant users.
Governments have already have already found outsourcing their manufacturing to contractors had superior results to doing so in house. I think nuclear weapons are about the only thing which isn't privatized.
The government already has an effective equity share anyway over everybody - it is called taxes. Money being mobile has other economic benefits but comes at the cost of allowing more fringe case shenanigans.
Isn’t the US government not allowed to own any IP? I’m pretty sure the Constitution says so. That’s why JPL is a thing; so NASA can pay JPL to do research (giving JPL, a company, the IP).
> Isn’t the US government not allowed to own any IP? I’m pretty sure the Constitution says so.
Not exactly. Anything created by the government and it's employees is automatically public domain (so, no copyright), but the government can and does get copyrights assigned to it[0] all the time for things created by vendors and contractors (this is negotiated in advance).
So, the government can own copyrights, if it acquires them.
[0] sometimes the US government just gets a perpetual, worldwide, yadda, yadda license instead. Typically not sublicensable, though. This can be a really sweet deal for the vendor, and really annoying for the public, particularly when it comes to data sets created with public funds.
It is partially owned by the public. All labor is partially owned by the public.
Private IP makes corporations and people a lot of money.
That money is taxed. That's how the government gets its share.
The public-private partnership allows for researchers to claim most of the value of their labor, while the government can encourage areas of research which are in the national interest through grant funding.
How much tax money do you think has derived from the early research on integrated circuits? A lot, right?
Proposing that the government can simply confiscate intellectual property if they fund it, would just result in a world where government funding is unattractive. This would give more power to corporations and billionaires to direct the course of research into their own private interests.
"Confiscate" is a very loaded word to use here. You don't say that I "confiscated the farmer's tomatoes" when I trade money for those tomatoes, or that an employer "confiscated the employee's code" when they traded that code for salary.
How much tax money would be derived from the multitude of businesses that would arise if more government-funded IP was freely licensed instead of granted to a single spinoff company?
Not much, since taking government money would mean forking over everything you invent to the government, and not many research groups would want to do it. It would be a poison pill: everything your lab does would come under scrutiny and potential lawsuit, how do you demonstrate that one thing was paid for with public funds but another thing wasn't?
In a response to describing researchers keeping IP they develop under grant as "straight up theft", I felt entitled to use a bit of inflammatory rhetoric of my own.
This is not a tax dodge. My guess is he's recognised that Trump is not going to concede to this coup attempt and is worried about the consequences. It is interesting to me that Cyprus does not extradite.
For more context, Eric Schmidt and Mark Zuckerberg used Google and Facebook to manipulate users during the 2008 and 2016 presidential elections. The Facebook “Template to Win” was written by a Russian. This program was used by Obama in the 2008 election to win and during the 2016 election. Obama set up a political war-room that utilised the Template to Win under the egis of the US Digital Service - a service used by Democrats against Republicans.
Schmidt has been so bold as to brag about his billion dollar efforts to get Obama and Hilary into the White House by writing new algorithms that direct users to rigged sites and ads that support his candidates.
Zuckerberg has tried to hide his crimes by lying about Russian ads and hiding his Template to Win, but the head of the Global Engagement Centre has told the press that he used Facebook to target and attack US citizens throughout the election.
Zuckerberg hasn’t really answered why Yuri Milner and other Russians own large amounts of Facebook shares. Mark also hasn’t answered why his best friend and investor ($200million), the Russian Yuri Milner now lives in Silicon Valley and buys political and corporate support like it’s popcorn.
I went to the same high school as Sergey Brin, a little over a decade after he had and well after Google had become the de facto search standard. Didn't know until I was already in college. AFAIK he's never made an effort to reach out to them, grant resources, give a talk, anything. It's a majority-minority public school in a solidly middle class (like, actually middle class) suburb, so it's not like they're flush with funding. Whatever his relationship to it had been at the time, you'd think he'd find it within himself to give back a tiny bit from the exceptional fortune and life that he's built. The reality, though, was that a lot of us didn't even know who he was, even though all of the school computers had their homepages set to Google.com.
I think that's emblematic of Google's regard to reinvestment. Even the products which made them so powerful in the first place they regularly abandon.
It could easily be throwing good money after bad - and he has moved on from it. It would be like giving money to an impoverished country with a blatantly corrupt government - it wouldn't do any good if they just waste it on say landscaping instead of say doing anything about bullying.
On that note do you feel an obligation to donate even say $5 to your old high school decades later when you have no other connections to it like kids currently attending? I don't think that is a very common behavior or sentiment.
You should do your research. ERHS is highly-ranked, especially so for a public school that is not a full magnet (it has a magnet STEM program that makes up a portion of the student body but otherwise draws from the surrounding neighborhoods). It's quite strong academically, and several of its alumni have returned to give back to it. And, generally-speaking, it's customary for highly-successful Americans (and especially those that become public figures) to give back to their high school and college alma mater.
It's a little disheartening that the immediate assumption is that "he might not have fond memories" or that "it could be throwing good money after bad." I assume that this is because the school was described as "majority-minority." ERHS students have their pick of desirable internships with the likes of NASA and the USDA, and regularly sends alumnae to Ivies and the Intel ISEF. It's not exactly an intellectually-stifling environment. We can't know what's going through Brin's mind, especially as he's never publicly discussed the subject, but we can certainly look at how his behavior compares to others, and I think HN's disregard for that in favor of a kneejerk negative reaction is shameful (if not unexpected).
It's troubling. I could understand if he was just a modestly-wealthy ecec in some large corporation, or a founder of a small software company, but he's not. He's one of the richest men in the world, and for two decades was in direct control of one of the most powerful entities on the planet. If at the apex of such success you can't even throw a few laptops at the public services where you spent your formative years (if not for support, then for reform), then it really calls into question the societal utility of such enormous private influence and holdings. It's funny how these small anecdotes about Google's founder and their ramifications dovetail with the overarching circumstance, which is that Google has abused its position and should probably be broken up.
Cyprus is the easiest (if expensive) way to get an EU passport which is useful for travel. I don't read much past that. He already has an army of lawyers and accountants to deal with his taxes.
It's not about traveling. It's about staying as long as he wants to and whenever he wants to. American citizens are limited to staying 90 days (in any 180 day period) in the EU as tourists. An EU passport would allow him for example to take a 6-month vacation in France.
EDIT: The 90/180 rule is for the Schengen area, not the whole EU, and, yes, that includes Switzerland, which is not in the EU. Not sure what the rules are for the rest of the EU, but he probably cares about Schengen anyway.
> Americans are currently blocked from travel to many countries, European included, due to the bungling of their Covid 19 response
These rules are littered with loopholes. If you work media, you (and your staff and family and apparently girlfriend) get a free pass in Portugal and Italy.
I just got back from a wedding in Germany—just had to quarantine in London for two weeks first.
To be clear, I'm not looking for a loophole. If I wanted to break the rules that's easy enough. I only want to understand the full slate of rule-abiding options available to me. Is that unreasonable?
edit: I guess it must be since I got downvoted. Wish they would explain their reasoning
The US is a big place, more akin to the entire EU than any one European country. Certain regions and states in the US have handled Covid much better than certain regions and states in the EU, and vice versa.
But on aggregate, Europe and the US have both massively bungled their Covid responses.
Overall the US has double the Covid infection rate and double the Covid death rate of Europe. Cherry picking doesn't matter because you could do the same with certain states.
I’m sorry, but this is missing the point. You’re forbidden from traveling FROM a country on whatever list (some are outright lists, some are based on the infection rate, etc.).
Traveling FROM the US is the problem, regardless of where your passport is from. Getting a passport (or even a residence card) from an EU country would only allow you to get back to THAT country, it doesn’t just suddenly open up the world to you.
Well, yes, but if you are traveling to a country where you have a citizenship, it's considered repatriation, so travel rules do not apply (but you usually have different set of rules to abide). And a completely different set of rules also applies for international truck drivers, another for cross-country commuters, etc.
The Schengen Area ( /ˈʃɛŋən/) is an area comprising 26 European countries that have officially abolished all passport and all other types of border control at their mutual borders. The area mostly functions as a single jurisdiction for international travel purposes, with a common visa policy. The area is named after the 1985 Schengen Agreement signed in Schengen, Luxembourg.
Source: https://en.wikipedia.org/wiki/Schengen_Area
I’m sorry, have you lived in Europe recently? Paid any attention to the news this year? Every country in that agreement reserves the right to restrict travel in times of emergency. Pandemics apply. For instance:
Estonia forbids travel from any country with an infection rate higher than x/100k (x keeps changing...)
During the first pandemic lockdown the Baltics were open at first, then Finland shut their borders, then they all shut their borders.
Poland agreed to let people traverse the country... then decided not to. Estonia had to send a ship to rescue citizens from the Polish border.
For a while a few months ago you couldn’t come to Estonia from the UK, but if you flew into Helsinki and then flew to Estonia it was fine.
Hum yes, I'm French and have lived here for about 30 years or so. Travel across the EU is much much easier if you're a EU citizen, ceteris paribus.
It's actually pretty funny that you would refer to that convoluted situation where one would have to fly first to Helsinki then to Estonia, considering both Finland and Estonia are in Schengen so no document would be required of an EU citizen to adapt their travel plans at the last minute.
No... if he flies from JFK to Cyprus he’ll be allowed. That doesn’t mean that he can connect through to London or Dubai without being stopped. It also doesn’t mean that spending the night there suddenly opens up the world to him - if you’ve been in a (for lack of a better term) “blacklisted” country in the last 14 days you still have to quarantine.
You are spot on. This was for travel to the EU, and likely a hedge against Trump winning re-election.
I'm working on doing the same, not because I care about taxes (which as others have pointed out doesn't really apply here) but because citizenship is a single point of failure.
What did Brexit change for St. Kitts nationals? I hold a St. Kitts passport (via marriage) and completely missed this.
Only reason my wives family got St. Kitts passports was because it was easier and quicker than Cyprus at the time, but they did eventually get their Cyprus passports too.
Why are people assuming this is a tax issue? It's just most people find it nicer to live in the EU, even billionaires, and especially if you don't need to worry about work.
Cyprus, Malta and Bulgaria have "citizenship for sale". The EU is fighting this back, rich investors buying their way into Schengen with no ties (or even residency requirements) to the countries they get passports from is very frowned upon.
Apart from that quite a lot of other EU members offer residency for investors, not ideal either but better than outright sales of passports.
If you aren't rich the rules for citizenship vary quite a bit between member states but they all require some years of residency and tax payments to qualify for citizenship.
Here in Sweden I'm going through the process and it's one of the most straightforward citizenship processes: live here for 5 years legally on a visa, pay your taxes and you qualify.
why a Cypriot passport he can live in France or Germany or Italy or any other EU state. But Cyprus provides passports quickly. Malta and Portugal are also quite good in this regard.
Feeling sensitive? Portugal's program is widely discussed. By an apartment and spend seven days a year in Portugal (which is a very nice place to spend time!)
This isn't new, all countries usually allow you to buy your way in using a "Golden Visa" program, including the USA and Canada. Typically it costs about $1 Million and some job creation/investment in the economy.
I look forward to meet him at our cypriot beaches ;) it would be interesting to see how and if, this drives more prestige figures in our island, and how will affect the economy...
In the Masters of Scale podcast (1) Eric Schmidt told Reid Hoffman in september that COVID-19 is limiting his ability to do what he loves to do to the extent that he shifted his main focus to COVID-19. One of the reasons for this was his decreased ability to freely move around and meet people.
Getting a EU passport makes moving in the EU a lot easier.
Note that an EU country citizenship by extension results in an EU citizenship. All EU citizens are granted special rights such as freedom of movement, right to work, social welfare, et cetera all throughout the EU.
If a country sells its citizenships, that country alone benefits financially from that transaction, but the potential obligations are borne by the entire EU community.
In my opinion, there is nothing inherently wrong about a country selling its citizenship, but in the EU framework it seems to go against the good faith principles that the EU is built on.
Listened to a podcast about this subject recently (in German though: [0]).
What eg. a German (very!) rich person would do is get a second passport in Cyprus and then open a Swiss bank account. To the Swiss bank, they'd say that they only have that one passport from Cyprus. Therefore, the Swiss bank does not report to the German state that the German individual has a bank account. This is how that person avoids German tax.
But this doesn't apply to the US. After 9/11 international banks have to share account details with the US Government if they want to transact with US banks.
Thus it would seem that Cyprus citizens would be able to demand high prices for selling their passports, which cannot be a bad thing. Then, Cyprus could enter into an agreement with Germany or Switzerland to share bank data if that becomes a problem.
Because those people never lived and will never live in Cyprus or EU, but the citizenship gives them rights in elections and access to a different banking system, for the sole purpose of evading laws.
I don't see what kind of problems could arise from this. From the point of view of the country the number of citizens remains constant. Only the name and the facial features of the passport-holder have changed. There may of course be a fee for updating the passport, besides the price of the interchange.
It's not that a citizen sells their citizenship to a non-citizen and therefore becomes a non-citizen. It's the country selling citizenships, meaning each sale results in one more citizen.
Anything done to the community affects it in some way - that criticism could be applied to sending a fruit basket to every Cypriot. Someone could get sick by eating fruit from it after it went bad.
This will feed the narrative of SV barons being unpatriotic globalists. He gets rich off the system as we run up massive deficits on his behalf and then sets up to flee. From his own perspective it’s rational, for everyone else it’s just a diss.
I thought I read, not too long ago, that he was kind of hell-bent on getting either the military or US govt. or NY state or some such, to be guided by him on adopting high tech for "their" benefit? Was I right, and if so, what happened about that? Fizzled out? Almost sure I read something to that effect, either in a TechCrunch kind of site or some online newspaper like NY Times. Likely not more than some months ago. Then why the sudden Cyprus thing?
Edit: Did the obvious, googled - for "eric schmidt advise us military on tech".
First 3 hits indicate I was right. Hit 1:
"The reason these politically connected people look towards Cyprus, and by extension, the EU, is because they fear their possessions might be at risk in their home country, Nigel Gould-Davies, a Russia expert at the United Kingdom’s International Institute for Strategic Affairs, told Al Jazeera."
> The way the program works is that once a foreigner lays down between $2 million and $3 million worth of investment in Cyprus, typically through a real estate purchase, they can apply to what is technically called the “Citizenship by Investment” program. After the government reviews the applicant’s background, conducts a security check, and hosts a visit from the foreigner, their application can be approved.
For anyone wanting to know how much it could cost.
I don't understand why he does this. The IRS will tax him regardless of whether he has assets in the US or outside of it, and he's rich enough to get a working visa to anywhere.
Does anyone know of any other possible tax advantage a rich American might get from Cypriot citizenship?
It's not just about taxes. People with EU passports have fewer travel restrictions than those with US passports right now. As was discussed in the article.
malta cyprus, ireland etc are useful for setting up business there . you can set up a local business that receives royalties from other companies and benefit from relatively low tax.
He s probably not doing it for taxes, but for a convenient EU passport and a humble abode in the mediterranean
I don't blame him for taking advantage of the system. What I blame him for is all of his supposed altruistic bloviating. No different than a Russian oligarch.
Huh, why not? If not for people taking advantage of "the system", "the system" would not exist.
I mean; here we have a guy that has taken all the advantage of all the benefits a developed industrial country has to offer and then in turn does everything in his power to give back as little as possible.
Hell yeah I'm going to blame him. It's not moral behavior. I don't care whether it is legal or not, he's behaving like a parasite and should be judged according to his behavior.
He should be forced to abide by the laws while he lives or does business here. But if he wants to live in a new place by a new set of laws in the future, I'm not sure what's wrong with that.
It seems more like you regret the laws in the US during the decades he was here, and you are hoping future changes in the law will retroactively address your concerns. But I see no moral basis for that stance.
If we want to change the law, we should be forced to consider the effects on the future, and whether those laws will negatively impact the wealth created in the future. If we start going back and seizing wealth from the past, that will give us a false sense that the laws are working, until the old money runs out and we look around and don't see anyone creating new wealth.
Morality != Legality! No sane person is advocating for ex post facto laws but it's wrong even if it's not illegal. He's been given every opportunity in life, accrued a net worth equal to the sum of 140,000 median Americans, then gives barely any of it back and apparently may flee to dodge being taxed on it.
> If we want to change the law, we should be forced to consider the effects on the future
Of course. This is why it's taken so long to come up with laws that prevent the kind of exploitation that creates a couple dozen billionaires while stagnating the majority of America's incomes. It's morality that drives the lawmaking -- since everyone has different morals and we all live under the same laws -- and at least if everyone hates the guy for this then hopefully we see some laws that prevent more behavior like this in the future.
The problem is benefiting from the advantages a system gives you, and then using those same benefits to deny others who are seeking those same advantages.
Like Paul Ryan who basically made it where he did thanks to US social services but did everything he could while in power to decimate those very services he himself relied upon now that he no longer needed them.
> “I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate,” Schmidt told one interviewer in 2012. “It’s called capitalism.”
As much as I enjoy watching people dissemble while describing their true actions, there’s not really anyone naive enough to believe Schmidt didn’t actively create the rules google currently operates under, is there?
Maybe he really was just a bystander in his company as it poured millions of dollars into lobbying the American government and he was powerless to stop them.
Or maybe he though the lobbying did nothing and he thought wasting money was a good thing.
Or he’s just lying and hopes people don’t acknowledge that there were maybe half a dozen people who had more power to shape the laws and regulations he operated under. But trying to just pass himself off as an uninvolved observer just rings thoroughly disingenuous.
I don’t advocate for trying to retroactively pass laws, as that is just mob rule. But to be one of the most powerful lobbying efforts in the country (in 2017, the single largest), while simultaneously claiming to be a helpless observer inside said system is hard for me to take seriously. His response was a claim that his behavior is socially acceptable and not tax avoidance (and thus would continue), whereas I’m saying this behavior is tax avoidance and should be labeled as such, and he’s well aware of how unpopular his opinion is and how much he invests from stopping reforms that would align the legal definition closer to the layman’s conception of tax avoidance.
Buying one. Citizenship is something that ought to be earned and given to people who show that they want to live in and contribute to a country. People like Schmidt purchase themselves a tax excemption or freedom of movement in a world where ordinary people right now lose their jobs and are locked into their country.
American citizens living and working abroad still must pay taxes to the US Government. As far as I am aware, the US is the only country in the world with this requirement. There is a reason the FBAR requirement is often called the "fubar" requirement.
I'm working in the US under a TN Visa at the moment as a Canadian citizen, and until this changes I'm never going to apply for a green card, and have been advising all my friends in similar situations to do the same.
We choose to live & work here because SV is the Mecca of software development, but that could very easily change within our lifetimes, so tying ourselves down with this ridiculous obligation for life doesn't make any sense in the long term.
> Does the global tax extend to green card holders who are not citizens?
Yep, see question 2:
> You have to file a U.S. income tax return while working and living abroad unless you abandon your green card holder status by filing Form I-407, with the U.S. Citizen & Immigration Service, or you renounce your U.S. citizenship under certain circumstances described in the expatriation tax provisions. See Publication 519, U.S. Tax Guide for Aliens, for more details.
For the vast majority of scenarios, the U.S. taxes citizens the same way as it taxes non-citizens. It doesn't matter whether you have a green card or are even working in the U.S. illegally, the tax laws apply to you just as well as they apply to a citizen.
Yes there are exceptions for some class of residents but they are quite fringe.
You get a pretty high exemption for salary earned abroad if you paid local taxes on it and the country has a tax agreement with the US, which most do. You're still taxed on income earned within the US normally, but it seems reasonable that if you earned income from rent from a US property, or received dividends from a US company, that you should pay taxes on it even if you are not in the country.
You are taxed on income you make abroad, even if you never set foot in the country. I'm not talking about capital gains. I'm talking about income. Yes, up to a certain amount, you can deduct dollar-for-dollar taxes paid in the foreign country, but you are still taxed on that income. It's the only country in the world that does this. Because of this, among other bits, I do not think it is reasonable.
Looking it up, it has the same rule as Germany: If your "center of life" is in Norway (roughly: spending more than 6 months out of a year there), then you have to pay your taxes.
That is not what the US does which is "We don’t care what you do and where you live, if you have citizenship you better file your taxes"
No, we don't. If you spend more than half the year in Norway, you are considered a resident for tax purposes, and chances are you will have to pay some tax.
However, income is not subject to double taxation; if you've already paid taxes in another jurisdiction, Norwegian authorities are not going to tax the same income again.
There are no tax benefits to be had for US citizens trying to hide money abroad post-FATCA. None.
The US has the most draconian global tax system of any country in the world, and has the unique position of being able to actually enforce it due to the fact the USD is the reserve currency of the world and every country needs to stay on the good side of the US Treasury to transact in the global economy.
In fact, the laws are so strict, they make living abroad as an honest middle-class expat a total nightmare. I have friends who cannot find a single bank in their country that will work with them because of the reporting requirements of working with US citizens. They cannot save in foreign banks and they cannot invest either due to the US penalizing foreign Mutual fund/ETF purchases by private citizens.
> Citizenship is something that ought to be earned and given to people who show that they want to live in and contribute to a country.
I mean, first, citizenship is made up. Many people have dual citizenship, and many countries will give you citizenship for ancestorship. And, of course, most countries offer citizenship to newborns who aren't contributing much and don't currently care about the country they're living in (and some countries, like the US, do so for babies born in the US to people who aren't citizens).
For someone like Eric S., it must be very easy to get a new citizenship, and this will help him to setup some of the schemes that, while legal, will allow him to evade billions of dollars in taxes over his lifetime. I believe this is just a way to simplify his tax dodging schemes.
Can you give an example of a scheme that this might help him set up? I believe that there are none, unless he pays a significant exit tax to give up his US citizenship.
There are all kinds of schemes, but the main vehicle used is to put all assets in something called a trust. Do your research. With a trust you can move your assets around without other people knowing where they are invested. While the US laws applies to all citizens, a trust is not a citizen of the US so according to international laws there is nothing the US can do about it. If Eric has another citizenship, this becomes even easier.
I guess it really comes down to how you conceptualize the nation-state. I think most people view a nation as a community, a body politic, maybe even an extended family. Buying citizenship is just as tawdry as paying for a mail-order bride.
But I’m sorry. Me and many others see the nation state as a service provider. An institution that enforces the rule of law, furnishes protection from invaders and criminals, and provides large-scale public goods in exchange for some slice of tax revenue and a code of conduct.
But if I’m unhappy with a service provider, then I should be free to change vendors to whomever meets my need. No different than the freedom to pay for a new phone plan or new gym membership.
You complain that ordinary people don’t have the same consumer choice as the ultra-wealthy. If so, the focus should be on how to make the global market for nation-states more competitive for a wider range of consumers. I agree that many are locked into a shitty service provider. But if anything, the tiny slice of people who can exercise a choice almost certainly makes this market more, not less, competitive.
> Citizenship is something that ought to be earned and given to people who show that they want to live in and contribute to a country
Says who? You?
The beauty of people is we have different opinions. If Cyprus wants to sell their citizenship for a dollar each, that's their right.
> People like Schmidt purchase themselves a...
Yes, that's one of the motivating factors for being rich, is being able to purchase things afterwards.
There's a child dying somewhere on this planet right now and here you are moralizing on HackerNews - people like you purchase themselves an internet connection and talk about blah blah, while a child is dying.
> Buying one. Citizenship is something that ought to be earned and given to people who show that they want to live in and contribute to a country.
Citizenship is just a legal relation between a person and a country. If both sides want that relationship, then it is perfectly moral to start such relationship.
> Citizenship is something that ought to be earned and given to people who show that they want to live in and contribute to a country.
But, by buying the citizenship, they are not just showing in some vague indirect way that they "want to" contribute to the country, they are actually, directly, palpably contributing to the country.
> People like Schmidt purchase themselves a tax excemption or freedom of movement in a world where ordinary people right now lose their jobs and are locked into their country.
I'm confused, is your complaint that Schmidt hasn't done enough to "earn" citizenship, or that people that don't have less capacity to contribute should also enjoy what Schmidt does.
You don't get to decide that about citizenship - Cyprus does. There are consequences to whatever they decide but "ought" in itself is meaningless as an argument.
How can you argue that Eric hasn't "earned" citizenship anywhere he wants. I have a buddy from India who has worked hard in the tech industry and is applying for US citizenship and I hope he gets it.
Its not like he just inherited his wealth and is now skipping out ASAP.
On top of the obvious tax benefits in Cyprus, the country is also member state of the EU since 2004.
That means 'Citizenship of the European Union', that includes the ability to travel to anywhere in the EU (visa free), the Ability to reside anywhere in the EU, hell Schmidt could even run for public office in any EU local governments municipal elections if he so wishes.
> There are no tax benefits for US citizens in Cyprus
- Dividend gains exemption
- Capital gains exemption
- Pension income capped at 5%
- Abolished inheritance tax
- All of the above plus bonus EU freedom of movement/residence
The guys fortune is parked on GOOG stock how can you say he has nothing to gain? There is a reason russian oligarchs are parking their money in that tiny island.
> hell Schmidt could even run for public office in any EU local governments municipal elections if he so wishes.
Here's an idea for a short story: Schmidt does indeed wish so; he becomes a politician in the EU and places himself in a position that allows him to make the EU a much more friendly place for the adtech industry and surveillance capitalism.
It's not necessarily about taxes, the marginal utility of money is basically 0 at his level. I'm guessing he just wants a guarantee of being able to get into the EU in case the political polarization in the US boils over. I certainly would, if I were him, especially given the steady drumbeat of demonization of the rich in the media.
Cyprus is not a member of Schengen but as an EU citizen you can still go anywhere in Europe visa free, stay, work and enjoy all benefits as long as you want.
This is the real problem. The EU shouldn't allow sale of citizenship in host countries, essentially paying a way to get into the EU. I highly doubt that would be possible to enforce though.
The Cyprus passport scheme has ended this month, only applications submitted before the end of October are considered. The same I believe applies to Malta which had a similar scheme.
Simple, this was probably in motion during Trump era - and for whatever reason (ability to work overseas, live overseas in EU, own property etc) there was an advantage to having an EU passport. This gets him that.
Are there US citizens here who wouldn’t take dual EU citizenship if it was offered to them? Taxes and social stability aside, Europe is full of nice places to visit, do business, and live. The value of being able to do these things without restrictions seems self-evident. I don’t see why you’d presume a nefarious motivation.
I don't know why you got that idea from. Those who renounce their US citizen might have some bureaucratic hassles when they wish to revisit the US, depending on what other passport they hold, but ex-US citizens regularly travel back to the US for leisure or to see family.
wait. if you renounce your citizenship you are denied entry? wouldn't he be able to just travel to the US under the same rules as any other Cypriot citizen?
None of what the parent said is correct. You would be treated like any other citizen of Cyprus if you revoked your US citizenship. Besides that, Schmidt is part of the Davos zillionaire elite, the US isn't going to deny him access.
> that has taken all the advantage of all the benefits a developed industrial country has to offer
a. He has also given a lot more back to the said country. than he has taken from it, IMO. Imagine what life would be like without Google.
b. Google is a global company, not just a US company
c. I don't believe in the notion of nations or citizenship and don't blame him if he doesn't either and is switching citizenships just for convenience/logistics.
Absolutely, Google has added to this world, not taken away from it. Being a potentially abusive company is a completely different matter, but it doesn't automatically invalidate the good things and I still consider it better off existing than not.
In any case, with Trump gone nobody will be around to fight Google if that's your desire.
Thanks for writing that - he's such a supreme hypocrite, but why expect more from the originator of, "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place."
So many of his own peccadilloes are out there too, despite his personal attempts to delete them from Google.
Some randos on the Internet aren’t going to know why he ultimately gets #MeToo’d.
However it should be obvious that every potential acquirer of Android was aware of enabling Andy Rubin to enter “ownership” relationships with his subordinates, at a time it was obvious to every huge tech CEO they had to develop an iPhone competitor.
It remains to be explained why Google alone decided to enable him, and what role Eric Schmidt played in that. Like quite concretely, when he looks at the private investigator’s report about Andy Rubin, and everyone else’s people doing the same thing at all the other companies saying “don’t do this deal,” despite the money on the line, why did he say yes?
I would add that of course all the major tech companies were aware of the iPhone before it was released, in addition to being aware of Andy Rubin’s ownership relationships of subordinates, and also Eric Schmidt sat on Apple’s board and was aware, and it was of course instrumental to Android’s acquisition.
Why do people think this is a "bad thing"? It's no different than buying an expensive home anywhere in the world, except it comes with a citizenship. I doubt he can use the favorable taxation - he would have to renounce his US citizenship for that.
When a billionaire makes a move like this (getting citizenship in another country) it’s often criticized as an “escape plan”, or somewhere to run if any number of bad things happen to or in the USA. It’s viewed a little differently from most other ex-pats because these are the people who have the money and power to dramatically influence the government, so if they’re running from something here in the US, it’s either “their” (by that I mean billionaires in general) fault for pushing the government in the wrong direction, or within “their” power to fix.
For example, if mass civil unrest breaks out in the US as a result of the recent election, Eric Schmidt can flee to his estate in Cyprus and ignore the fact that he owned a social network (Youtube) that knowingly hosted radical content and disinformation which would have (in part) caused the civil unrest he’s fleeing from.
Whether or not that’s his intention, it doesn’t matter. True or not, what people are seeing is billionaires knowingly destabilizing the country in order to make a lot of money, then using that money to protect themselves against the country they just damaged.
That very thing happened earlier this year at the start of the pandemic, SV billionaires fled the country to go to a private island in New Zealand, while their employees suffered and died back here in the US: https://www.independent.co.uk/news/world/americas/coronaviru...
Google bought YouTube in 2006. Schmidt was CEO until 2011. YouTube got out of control with disinformation mostly after 2011. And he probably had almost nothing to do with YouTube in the five years he was CEO after Google purchased YouTube.
I wouldn't blame Schmidt much for YouTube's disinformation problem. I'd blame the people directly running YouTube (especially people running it recently / now).
Sadly I think the radicalisation started when the censorship did. I honestly believe they're making things worse by clamping down on misinformation. Streisand effect is real.
Ahem... He "owned YouTube"? That's a "bit of an exaggeration".
As an anarchist - most people love the state and love giving it power, rich people just use the power that the masses so eagerly give away.
If you want to know where the power of the SV billionaires comes from, just look in the mirror. Nothing, other than our compliance, makes them that powerful and wealthy.
Do they expect the same things from the billionaires from Saudi Arabia, china, japan etc who have invested in american companies? I was also under the impression that the jet set is generally considered international
How is this a "conspiracy", that post is pointing out how wealthy and powerful people don't have to worry about the long term effects of their actions like their employees do.
The statement about it being different from assumed ability to control things - if that was true then we wouldn't see the farce of anti-trust hearings and it would be ignored like Disney's prepostorus levels of consolidation. The real world is more complicated than those simplistic soundbites and scapegoating as many agents struggle for power. If they really had that level of control the governments would have given up on their moronic backdooring of encryption ideas.
> "Eric Schmidt can [...] ignore the fact that he owned a social network (Youtube) that knowingly hosted radical content and disinformation which would have (in part) caused the civil unrest he’s fleeing from."
Conspiracy is maybe the wrong word, but OP seems to genuinely believe that Schmidt caused the recent civil unrest through his Youtube ownership.
I’m not sure where you read in my comment that I “genuinely believe” that he “caused” the “recent” unrest when I feel like I went to major lengths to paint the situation as a hypothetical scenario that may possibly take place in a hypothetical version of the future. I used a lot of “if” statements and “for example” and future tense, and “as a result of the recent election” (so not relating to this summer’s unrest). I even used so many weasel words like “whether or not that’s his intention” and “true or not” and “what people are seeing”. None of that in any way implies a genuine belief or does it imply I’m speaking about something that actually happened in the past.
I then linked to an article that shows this hypothetical future situation has actually happened in the recent past, billionaires fleeing to safety while their employees suffer and die. If that’s “QAnon levels” of “conspiracy madness” then holy fuck we’re screwed because this has actually happened, and recently, as shown in the article I linked to. And the fact that it actually happened is the reason people assume that’s what he’s doing now... because the same thing actually happened earlier this year with other billionaires.
I mean, I went way out of my way to explicitly avoid comments like this and it seems like you just ignored all of that and read exactly what you wanted to read. That’s not the level of discourse I expect from HN.
Some people might see the ultra wealthy in the USA of late as having taken part in destroying the country and also preparing to leave it, which they can do thanks to their wealth. Pete Thiel and his New Zealand plans are another more explicit example.
People escaping lock downs in jets and boats are annoying, but at least understandable. Given the opportunity to escape to somewhere physically safer, I’d probably do the same thing.
Expatriating your massive wealth to avoid paying taxes makes it feel like they’re performing a smash and grab job on the whole country. Doubly so because the people doing this would still be fantastically wealthy if they stayed and paid their taxes; they’re just doing it to be even richer still.
True, however right now US people can't travel to cyprus due to restrictions. Plus i m not sure why he would want to travel to europe since everything is locked down atm
countries like Malta and Cyprus have plenty schemes under which they attract HNWI's like him. I'm surprised about Cyprus considering Schmidt is from the US which is an odd choice since it's usually Russians and Russian companies that launder their money through Cyprus.
Malta is much more popular among expat Brits and native English speakers and also (still) has a cleaner reputation compared to Cyprus.
Both jurisdictions fill a void that opened when Switzerland agreed to hand over data on US citizens to the USA. Technically Cyprus/Malta too shares data but while the Swiss banking is a lot cleaner now than it was 20 years ago and certainly lot of things are now impossible that places like Nevada, New Mexico etc still allow.
Both Cyprus/Malta have no shortage of crooks dressed as lawyers, accountants, notaries and bankers that will help him bypass the tax-men if he wants to but I strongly doubt that is the reason simply because he has better chances doing that at home. The US is now the biggest tax-haven in the world. It sounds more personal than this.
Maybe he is planning to do business with wealthy Russians (unlikely) maybe he watched Mama-Mia and is now obsessed with the idea of falling in love on a Greek island, or maybe he wants to live in a city that is politically divided as much as his home planet. (Nicosia) /s
cyprus has 12.5% tax (like Ireland) and are not in OECD's tax haven list since many years ago . They also participate in every EU exchange of information programs and audits etc. They aren't even considered cheap compared to other EU low-tax places
FWIW Cyprus is kind of a shithole, so it's not exactly like "buying an expensive home anywhere in the world". These people want the citizenship, not the real estate.
Not that I think there's anything wrong with this, probably half of my friends have these passports. Until recently this was the easiest way for Russians to move to the EU.
It really is, my wives' family has property there thanks to this very citizenship scheme. Sometimes we holiday there because it's literally free, but the place really doesn't have any redeeming qualities.
There's nothing that Cyprus offers that's not done better somewhere else in Europe if you have the money to spend.
Sure, there are worse places out there. But to the Eric Schmidts of the world it firmly falls in the shithole category.
It’s not good or bad it’s whether society as a whole should be bestowing such gifts on banal office administrators, in terms of real daily work.
If they want to leave the nation that built them, it’s America’s wealth; fat tax inbound.
These are normal mortal men.
Believing they can live some decoupled free agent life on humanities tab for their accomplishments which are banal business at the core of it, not novel science, is no different from creating a monarchy and its regents, etc
They are normal men. Not deities. This is the first era where their mess being left behind isn’t just some stone fortresses and a handful of factories. This has been accomplished at great environmental cost.
THis is interesting - is this an Trump opposition dump on Biden? Pretty good timing if so :)
And for all the folks going on about taxes.
1) Rich people can already avoid taxes by investing overseas and not generating realized gains so funds stay untaxed overseas. I don't think being a citizen of EU would change that much.
2) US citizens are taxed regardless of second citizenships as US citizens.
"If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside."
For folks with a family office the question is not too complicated. Someone says, would it be beneficial to have another passport (EU). The answer is yes (sometimes also intended to benefit kids by giving them lots of options in terms of schools etc). Then someone else does all the paperwork. You need to buy property worth $400K? That is not even an expense. This is not a "high cost" approach.
Would be nice to be able to do whatever the hell you want, whenever you want. Billionaires play by their own rules, the rest of us plebs need to stay in our place.
I literally just read an article 10 minutes ago saying he is expected to lead a tech industry taskforce for the Biden administration. Not a good look to be taking on a more involved role in US governance the exact same moment you're applying for citizenship of a different country.
He is up for the head of a taskforce and not a cabinet position. That means this is neither a particularly powerful position or one that will require any congressional or other approval. I doubt there is any real political motivation to leak this info. If this was leaked nefariously, my money would be on the motivation being personal.
If this was leaked nefariously, my money would be on the motivation being personal.
Yep, me too. If there is any truth to some of the gossip out there about his personal life, that would explain both the source and motivation for blowing this up for him.
When Mars is ready in a few years, many will buy a one way ticket to escape from governments, tax collectors and other similar criminal organizations on earth. The only question will be, for how long will you be safe?
The article does not mention why, but considering that cypress has an extradition treaty with the States of America, It’s likely for tax reasons as all rich people do
Edit: Oh, I see, you’re responding to GP about tax advantages. Yes, as a US citizen he will still owe US tax on worldwide income. Doesn’t mean there aren’t a bunch of loopholes around unrealized gains though.
Optics aren’t great when a well-known democratic donor who may be a part of the new administration is simultaneously evading the taxes that the administration might adjust.
I cannot stand this manufactured outcry over a nothing burger.
The EU wanted to make a big deal out of selling citizenship.
Like how DARE Cyprus sell citizenship that comes with EU membership!
No, rich people should sign up for an """investment""" VISA from the Netherlands instead!
That's how they should be let in.
The Netherlands is an honorable upstanding country that most definitely would NEVER allow questionable people to get into the EU, definitely no mafia clans or terrorists, not like that place is a hub for narcotics and weapons trafficking.
But Cyprus, bunch of brown quasi-orientals selling EU membership!
How DARE they!
A visa is in fact very different from citizenship in many ways. For example but not limited to: judicial protection, extradition privileges, voting rights, travel rights in other member states, social security, diplomatic protection in other countries, ...
Can he even get a second citizenship? As far as I was aware (as a US citizen myself), the US doesn't allow you become a citizen of another country without renouncing your US citizenship except in the very specific dual-citizenship scenarios regarding birth or familial ties.
I know under the Obama administration the federal government had turned a blind eye to people not renouncing a prior citizenship when becoming a naturalized US citizen, but I'm curious about the reverse.
They were not too kind to Eduardo Saverin. (The Facebook cofounder who had to fight zuckerberg over diluted shares, when the case was resolved in his favor he took the money and ran to Singapore and renounced his US citizenship).
From .gov site:
"U.S. law does not mention dual nationality or require a person to choose one nationality or another. A U.S. citizen may naturalize in a foreign state without any risk to his or her U.S. citizenship. However, persons who acquire a foreign nationality after age 18 by applying for it may relinquish their U.S. nationality if they wish to do so. In order to relinquish U.S. nationality by virtue of naturalization as a citizen of a foreign state, the law requires that the person must apply for the foreign nationality voluntarily and with the intention to relinquish U.S. nationality. Intent may be shown by the person’s statements and conduct."
"...it’s important to recognize that the USA follows a ‘master nationality’ rule. What this means is, it recognizes only the US nationality of an individual, regardless of whether that individual holds any other citizenship."
So it's not that it doesn't allow it so much as it just pretends that your additional citizenship(s) don't exist. The USG will come after you for entering/leaving the US using a non-US passport though.
> In 1995, one of the first and most promising MDDS grants went to a computer-science research team at Stanford University with a decade-long history of working with NSF and DARPA grants. The primary objective of this grant was “query optimization of very complex queries that are described using the ‘query flocks’ approach.” A second grant—the DARPA-NSF grant most closely associated with Google’s origin—was part of a coordinated effort to build a massive digital library using the internet as its backbone. Both grants funded research by two graduate students who were making rapid advances in web-page ranking, as well as tracking (and making sense of) user queries: future Google cofounders Sergey Brin and Larry Page.
> The research by Brin and Page under these grants became the heart of Google: people using search functions to find precisely what they wanted inside a very large data set. The intelligence community, however, saw a slightly different benefit in their research: Could the network be organized so efficiently that individual users could be uniquely identified and tracked?
Not to mention In-Q-Tel's investment into one of their key products, Google Maps via Keyhole. And DARPA's Grand Challenge that led to the Stanley car that was acquired and scaled up to make Google's automated car division.
Google has done an admirable job of taking Government sponsored R&D and maturing it into products. They deserve their success. But, in my opinion, the systemic lack of reinvestment into the pipeline that created them and their most successful products is equivalent to sawing off the branch that they're sitting on.
The US Govt couldn't have invented the iPhone or Google's search engine, but they did fund the first Integrated Circuits, the first IC-based computer, the internet, GPS, discrete problems in computer science involving searching large amounts of data, display technologies, battery technologies, MEMS sensors etc etc.