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How to Hide a Billion Dollars: Three Techniques the Ultrarich Use to Dodge Ex-Sp

111 points by based2 6y ago

hn_throwaway_99 6y ago
I'm sure not all the ultrarich are like this, but so often I can't get over how truly awful these people are, especially for a man who made his Midas fortune in something that has no net benefit to society (yeah, yeah, liquidity liquidity, blah, blah, still think it's total BS that high frequency traders are anything but leaches on capital markets).
- fxtentacle 6y ago
  Oddly enough, the more tangible benefits to society a job provides, the less it is paid for. It's almost like a "your job is not bullshit" salary deduction. From bakery to supermarket to food delivery, pretty much all of the people I interact with daily are paid badly.
  - hn_throwaway_99 6y ago
    Yeah, I have no idea what the solution is, but I was pretty down during the pandemic that all the "essential worker" jobs that we truly depend upon, e.g. delivery, grocery, sanitation, many (but obviously not all) health care workers, etc., are paid shit, and further more often have to put their health on the line to work, while honestly a huge number of highly paid tech worker jobs (that now get to happen from the safety and comfort of home) could disappear and society wouldn't notice.
    - jdkee 6y ago
      Tax wealth, not income.
      - DuskStar 6y ago
        Tax consumption, not wealth or income.
        lifeisstillgood 6y ago
        Generally that's considered regressive (so we all have to eat and eat about the same amount of food each day.) For jeff bezos the Tesco Extra Special range is a rounding error whereas for the bottom 10% it's a large fraction of daily income. taxing that basically taxes a large fraction of their daily income.
        srtjstjsj 6y ago
        Tax consumption progressively.
        Thorrez 6y ago
        How would you implement that? Isn't consumption tax generally a sales tax? At the time of a specific sale it would be hard to find out the right tax rate.
        dahfizz 6y ago
        You could have a large personal deduction. You could tax everything at the lowest rate at the point of sale but make people do the accounting and pay their real rate if they are in a higher rate. The "tax" at the point of sale would act like income withholdings do now. You could categorize good so that yatchs have a much higher rate than groceries. You could also come up with an average price for good so that really expensive e.g. clothes and cars are taxed at a higher rate than they are for "normal" goods. All it takes is some creativity.
        Thorrez 6y ago
        It requires people to save receipts on everything they buy. People (in states that charge sales tax) already sort of are required to do this for goods they buy online that don't charge tax. The vast vast vast majority of people (every single person I've asked) evade this tax. I try to pay the tax myself (I'm the only person I know who does this) by going through online receipts, putting them in a spreadsheet and calculating the tax. I know I'm missing some though, I buy too much stuff. There are even people I know who don't just evade the tax out of laziness, but evade it intentionally to save money, intentionally buying stuff online because it doesn't charge tax. My point is that this will be a very large amount of effort for people, and there will be a large amount of tax evasion due to both laziness and greed.
    - snarf21 6y ago
      We could get rid of capital gains tax and tax it as normal income. We could also get rid of like kind exchange. This money could be used to lower or eliminate income taxes for the poor. It is all about incentivizing how we want capital to be invested for the benefit of society. Today we've decided that shareholders are primary for public companies. The stock market is at all time highs but it comes with a cost.
      - hn_throwaway_99 6y ago
        Yeah, when it comes to capital gains I always thought it made the most sense to tax it as normal income but to index the basis against inflation.
      - herpderperator 6y ago
        In the US, investments held less than a year are taxed at normal income.
      - pkaye 6y ago
        Isn't Biden proposing to do that for those who earn more than $1M. Not sure how likely that will pass though.
      - innagadadavida 6y ago
        How about we abolish all taxes and just tax the total wealth? That will give people the incentive to work as opposed to making a quick buck and retiring.
        bluedevil2k 6y ago
        How many people are looking to make a quick buck and retire? The people who are billionaires are billionaires because they are super competitive and super hard workers. Gates, Bezos, Jobs - you think they worked 8 hours a day when they were growing their companies? No, those guys are driven to succeed and that doesn’t just go away when you make X dollars.
        6y ago
    - deleted 6y ago
      [deleted]
    - xorcist 6y ago
      Medical doctors are paid pretty well, and that's a real job if there ever was one. It's interesting to see how that profession has held up so well, in almost all parts of the world, while others have slowly inflated supply to lower payments.
      - coldtea 6y ago
        >Medical doctors are paid pretty well, and that's a real job if there ever was one. On the other hand, the health industry (from drugs to hospitals) makes a shittoan of money, and most of it is by pushing BS on people and (in the US) by overcharging 10x simple procedures...
      - dahfizz 6y ago
        > while others have slowly inflated supply to lower payments. Could you give some examples? Real personal income has been rising pretty steadily for as long as the data has been collected [1]. So the median person earns more as the years go on, not less. [1] https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N
        xorcist 6y ago
        Relative to other jobs, not in absolute terms (which isn't very meaningful to compare). Lots of specialized jobs start out well paid and then spread out over time as more enter the profession. Airline pilots, for example, used to be a lucrative job but isn't now. School teachers used to be paid well. Engineering is a bit of a mixed bag, but there are plenty of examples there too. Medical doctors is the common exception to this.
  - rebelos 6y ago
    Your observations are coincidental and skewed by cognitive bias. A neurosurgeon is one obvious counterexample. The predominant determinant of labor compensation is substitutability.
    - Maarten88 6y ago
      > The predominant determinant of labor compensation is substitutability. Which proves the article right: the guy labored hard to move the proceeds of his partners work into a forest of trusts that only he knows and that only benefits him personally, by statute. He can't be substituted anymore!
      - rebelos 6y ago
        Labor compensation is a subset of compensation in the abstract (or, even more broadly, "return on time and capital"). Importantly, in most economies, it's typically set by employers hiring within an efficient labor market.
        brmgb 6y ago
        I might have believed you before the covid epidemic but I think it definitely proved that wrong. We have a dearth of essential people. Nurses are a perfect example. Yet they keep being paid like crap. It is becoming clearer by the day that the job market is not an efficient market at all. Why keep pretending ?
        rebelos 6y ago
        First of all, everything is running remarkably smoothly given the circumstances. The Covid-19 statistics are largely a consequence of people acting individually out of self interest and ignorance, yielding negative systemic externalities, and not a dysfunction of the healthcare system. Furthermore, if you think about how insurance risk pooling works, it's quite easy to see how an insurance-backed, profit-motivated healthcare system may not be the best vehicle to address a systemic health problem afflicting the entire population. You may recall AIG as a rough analogue for this situation. Or even entities insuring against natural disasters in California. The government has to step in to prevent failure. And then we have the most obvious counterargument to your flawed thesis: why would labor compensation go up during a recession with high unemployment and considerable attendant macroeconomic instability? Those factors have contributed to dramatically increased substitutability and thus quite naturally suppress wage growth.
  - newguy1234 6y ago
    Labor is not valued based on the "benefits to society" it provides. It is valued based on supply and demand. The low paid jobs are jobs that basically anyone can do with minimal education or on the job training. If those jobs were harder to do then they would certainly be paid more.
    - pixelbash 6y ago
      Some of the hardest jobs are underpaid, and level of education means less than it used to. Nurses and scientists for example. Partner is a microbiologist PHD graduate and starting salary wouldn't be much different my self taught first coding job - not that getting a job right now is really possible anyway.
- lisper 6y ago
  > I'm sure not all the ultrarich are like this What makes you so sure? At some level of wealth, it is essentially zero effort to engage in these shenanigans; you just hire someone to do it for you. The more money you have, the higher the return on this investment. At some point it becomes deeply irrational not to do it.
  - hn_throwaway_99 6y ago
    It's only irrational not to do it if you're a completely self-centered asshole who derives no internal happiness from seeing others thrive. I can't believe the marginal increase in quality of life, happiness or life satisfaction is any different between someone worth $100 million compared to billions. If I was married to someone for decades, and decided to leave her for a newer model (shitty to begin with but bear with me), I would feel the value of leaving on at least decent terms would be worth a couple percent of my wealth.
    - seibelj 6y ago
      Just to play devil’s advocate we have no idea what is between this couple, or any couple for that matter, and are being presented with her side as he is silent. Sometimes people break up, and one person doesn’t want the other to get a single penny, whether they have $1 or $10 billion.
    - thrav 6y ago
      The end around this is convincing yourself that you’ll spend it better than the government would. There is a famous clip of Michael Dell saying as much at Davos. Bezos and Musk think they’re saving the human race by deploying their capitol towards the pursuit of life in space. Gates is attempting to make various diseases extinct. Soros is attempting to bring about a world more closely aligned to the philosophical ideals that shaped his early education. The richest of the rich usually have some pet project that they think is the most important thing in the world.
      - Shorel 6y ago
        And Gates, Bezos, and Musk are probably right. If anything, it is a much more efficient way to spend some resources. Instead of filling the bellies of thousands of red tape enabling workers, or spending that much money in pharmaceutical advertising.
- el_nahual 6y ago
  Here's a question. I find it abhorrent that 15%-30% of my tax dollars go to funding the military, dhs, nsa, etc. If one is a pacifist, is there an argument to be made that minimizing taxes is in fact the ethical thing to do?
  - AnimalMuppet 6y ago
    No. Spend more of that money on lobbying, to get funding for the military, dhs, nsa, etc cut. For added bonus morality points, spend even more money providing aid or employment training for those who lose jobs in the process. Do not get super clever to pay less taxes, leave those who cannot avail themselves to such methods to pay more (or the government to go further into debt), and call that morality. Don't kid us, and don't kid yourself.
  - egypturnash 6y ago
    Your tax dollars also go to the social safety net, education, funding the arts, maintaining roads, keeping parks nice places to visit, and a whole bunch of other stuff that is generally not in conflict with pacifism. Should these babies be thrown out with the military bathwater?
    - djKianoosh 6y ago
      The majority of these dollars in the US go to military bathwater. Perhaps there may be a way for citizens to earmark their preferences directly for where they feel their tax dollars should go. Yeah yeah go vote of course. But Congress acts too slow. I am talking about a more direct system, maybe with limits sure. But as it is, Congress has a lot of the purse strings, and maybe individual citizens could have more say-so with an improved system.
      - ashtonkem 6y ago
        Earmarking your own dollars for what you support might make you feel better, but it won’t change anything. Money is fungible by design, every dollar of yours that’s earmarked for welfare programs frees up someone else’s for the military. Sure, if everyone did that it would have an impact, but that seems pretty improbable.
- dcolkitt 6y ago
  Honest question? Do you believe it’s possible to sustain anything close to the levels of consumer wealth seen in US, Europe, or Australia without liquid and efficient financial capital markets? If so, how come since the industrial revolution, the wealthiest economies have always had the most liquid and sophisticated financial markets? (With the possible exception of a few natural resource states) Have you considered the possibility that financial liquidity is as essential for high consumer living standards as reliable electrical grids or fair court systems? Because the majority of economists would certainly say so.
  - hn_throwaway_99 6y ago
    There is more than ample financial market liquidity without needing some of the brightest people in the world spending their time trying to shave half a millisecond off trade execution times.
    - ghufran_syed 6y ago
      How do you measure if the liquidity is "ample"? And does that necessarily mean it would stay "ample" if market volatility went up?
    - dcolkitt 6y ago
      "There is more than ample database performance without needing some of the brightest people in the world spending their time trying to shave half a millisecond off query execution times" Imagine someone making such a statement, without even bothering to talk to someone with actual expertise in the field of database technology. It's fine to be a layman on the topic, but it's not a good look to presume that you no more than the domain experts without even bothering to study their positions.
      - hn_throwaway_99 6y ago
        First of all, I have experience with HFT, so I know what I'm talking about. Second, your analogy doesn't make sense. HFT is only enabled as a byproduct of how electronic exchanges order their trades. They could just as easily bulk all orders by the second and then randomly order them to eliminate the benefit of, for example, building as close as possible to the exchange so you have a speed-of-light transit time benefit over your competitors.
- neximo64 6y ago
  Not to be critical but this sounds a bit like cognitive dissonance.
- closeparen 6y ago
  “No net benefit to society” is your personal value judgement. Other people necessarily made different value judgements when they exchanged billions of dollars in value for those things.
  - thewarrior 6y ago
    Well gangsters, heroin smugglers and hit men probably got paid billions of dollars too. Pablo Escobar was one of the richest men in the world. And most of it was not stock but actual cash. Hence the fact that billions were paid for something does not in any way prove that it adds value to society.
    - closeparen 6y ago
      How has the whole “protect people from their preferences about drugs” thing been working out for us?
RestlessMind 6y ago
I support existence of Billionaires and even admire some of them, unlike the left flank of the Democratic party. However, after reading such shenanigans, I sincerely wish for a clean sweep for Democrats in the upcoming election, to be followed by an intense crackdown on all the crazy loopholes used by the ultra-rich to cheat on their partners or their governments. Ideally, if the new crop of leaders have any balls, they would make a prominent example of some asshole (Bosarge seems to fit that profile) just to send a message to everyone else. This was one mistake Obama did, when he went easy on all the Wall St idiots responsible for the GFC.
- srtjstjsj 6y ago
  What makes you think Democrats in government don't support billionaires?
  - strathmeyer 6y ago
    Their tweets? The things they say to get elected?
    - AnimalMuppet 6y ago
      I notice that you didn't say "the policies they enact when they get elected".
  - newguy1234 6y ago
    Democrats supposedly claim to want to "tax the rich" and give people social welfare programs. Of course at the same time democrats have been well known for corruption (see city of Chicago as an example) so I think their talk is rather fickle. Actions speak louder than words as they say.
  - RestlessMind 6y ago
    Fair question - that's why I specifically called out Obama, and specifically referred to the left flank of Democrats (Bernie, Warren, AOC) who would back their rhetoric with some action. Warren, in particular, has demonstrated some good track record here with CFPB. I would certainly not expect anything from Biden, Schumer or Pelosi.
lifeisstillgood 6y ago
There are two approaches to this - one says something like "they have too much money, tax it and spend it on the poor / shaping society". The other is "if you stop people from earning bazillions you won't get innovation. I am not a fan of either particularly (well of course we want to tax people and spend it to create a better society, it's just that sentence is basically all politics ever, not a specific policy to enact) I prefer the idea that a billionaire is a market failure. It's not like there are no millionaires looking up and going, well that guy deserves his wealth and I am just going to accept my lot in life" If we see a billionaire in a given industry - let's ask "what regulations will they really really hate to see removed or created?"
- coldtea 6y ago
  >* The other is "if you stop people from earning bazillions you won't get innovation.* We had tons of innovation in the past (even more important things than today) when people didn't earn bazillions from them...
  - robertlagrant 6y ago
    And now we have global reach. Windows can be sold everywhere for no extra cost. That was never the case before software. Spotting a trend is not as good as understanding a trend.
  - ummonk 6y ago
    When? We’ve had more innovation in the last 200 years than any era before, and billionaires have been a fact of life during this period.
    - ironman1478 6y ago
      A lot of the innovations come from funding from the government. Things like green energy, the internet, and soon self driving cars all come from funding for the government, either through incentives (like the DARPA self driving challenges a few years ago) or just straight up state sponsored research. You don't need billionaires to make things happen. Also, I will ask, where are all the billionaires who actually spend their money to do good once they've amassed their wealth? Bill Gates has done this, but lots of these people are abject failures at actually using their money directly to do good. They might have innovated in while they were acquiring their money, but once they get it they don't seem so innovative anymore.
julius_set 6y ago
Think we need something better than the concept of money.
- robertlagrant 6y ago
  Money is just "the relative value of things and services". Whatever system put in place to measure relative value will be gameable, and will also have many legitimate winners whose win lots of people don't understand.
  - dredmorbius 6y ago
    No, the relative value of stuff is independent of money, certainly of any one currency. Money facilitates exchange. Adam Smith argues this has primacy: "The sole use of money is to circulate consumable goods." Wealth of Nations. Other authors argue for characteristics. William Stanley Jevons properties aren't bulletproof in my view, but are a good departure point: utility and value, portability, indestructability, homogeneity, divisibility, stability of value, and cognisability. https://archive.org/details/cu31924013816172 https://archive.org/details/cu31924013816172
- newguy1234 6y ago
  Money is simply a tool used to facilitate the transfer of goods/services among people. You can use cryptocurrencies just as well or you can use direct barter but a common-use currency provides benefits that people enjoy.
  - julius_set 6y ago
    I would say still thinking too narrowly, some interesting science fictions novels had knowledge as a form of currency in some technocratic societies (The Omar ~> Deus Ex Invisible War) Not saying this is the best solution but again different form of “currency / money.” Imagine you are a human who is part of a hive mind, (think Deus Ex Helios AI) you wouldn’t have a need for money.
- dredmorbius 6y ago
unchocked 6y ago
Awful tabloid theatrics aside, the story illustrates the serious point that there is way too much opacity regarding money in our society. Bring it all out into the sunlight. Then figure out what policy should be.
AmericanChopper 6y ago
It's worth noting that this specific situation is only possible due to the insane complexity of gift tax laws. Payments made into a trust are supposed to be gifts, and taxed accordingly. However there's a number of ways to get around this. This strategy doesn't work if you have to pay a 40% tax on transferring your assets into a trust, and another 40% tax when you want to transfer those assets into another trust.
deleted 6y ago
[deleted]
arminiusreturns 6y ago
If are interested in this topic and you haven't seen the independent documentary "The Spider's Web: Britain's Second Empire", you owe it to yourself. It's a superbly done documentary on a budget of ~4k£. https://www.youtube.com/watch?v=np_ylvc8Zj8 https://www.youtube.com/watch?v=np_ylvc8Zj8
m3kw9 6y ago
How is this legal at all: “ For example, it allows assets to be decanted from one trust to another without any notice to beneficiaries who may be cut out of the new trust. It also allows DAPT assets to be protected from alimony, divorce and child support claims—so long as those claims didn’t exist when assets were first transferred into the DAPT. ”
- FireBeyond 6y ago
  Because there are influential, and rich people who have a vested interest in making sure "loopholes" like this. And when enough outcry is raised, if ever, it'll be closed "just as soon as we can".

111 points by based2 6y ago

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

fxtentacle 6y ago
Oddly enough, the more tangible benefits to society a job provides, the less it is paid for. It's almost like a "your job is not bullshit" salary deduction. From bakery to supermarket to food delivery, pretty much all of the people I interact with daily are paid badly.
- hn_throwaway_99 6y ago
  Yeah, I have no idea what the solution is, but I was pretty down during the pandemic that all the "essential worker" jobs that we truly depend upon, e.g. delivery, grocery, sanitation, many (but obviously not all) health care workers, etc., are paid shit, and further more often have to put their health on the line to work, while honestly a huge number of highly paid tech worker jobs (that now get to happen from the safety and comfort of home) could disappear and society wouldn't notice.
  - jdkee 6y ago
    Tax wealth, not income.
    - DuskStar 6y ago
      Tax consumption, not wealth or income.
      - lifeisstillgood 6y ago
        Generally that's considered regressive (so we all have to eat and eat about the same amount of food each day.) For jeff bezos the Tesco Extra Special range is a rounding error whereas for the bottom 10% it's a large fraction of daily income. taxing that basically taxes a large fraction of their daily income.
        srtjstjsj 6y ago
        Tax consumption progressively.
        Thorrez 6y ago
        How would you implement that? Isn't consumption tax generally a sales tax? At the time of a specific sale it would be hard to find out the right tax rate.
        dahfizz 6y ago
        You could have a large personal deduction. You could tax everything at the lowest rate at the point of sale but make people do the accounting and pay their real rate if they are in a higher rate. The "tax" at the point of sale would act like income withholdings do now. You could categorize good so that yatchs have a much higher rate than groceries. You could also come up with an average price for good so that really expensive e.g. clothes and cars are taxed at a higher rate than they are for "normal" goods. All it takes is some creativity.
        Thorrez 6y ago
        It requires people to save receipts on everything they buy. People (in states that charge sales tax) already sort of are required to do this for goods they buy online that don't charge tax. The vast vast vast majority of people (every single person I've asked) evade this tax. I try to pay the tax myself (I'm the only person I know who does this) by going through online receipts, putting them in a spreadsheet and calculating the tax. I know I'm missing some though, I buy too much stuff. There are even people I know who don't just evade the tax out of laziness, but evade it intentionally to save money, intentionally buying stuff online because it doesn't charge tax. My point is that this will be a very large amount of effort for people, and there will be a large amount of tax evasion due to both laziness and greed.
  - snarf21 6y ago
    We could get rid of capital gains tax and tax it as normal income. We could also get rid of like kind exchange. This money could be used to lower or eliminate income taxes for the poor. It is all about incentivizing how we want capital to be invested for the benefit of society. Today we've decided that shareholders are primary for public companies. The stock market is at all time highs but it comes with a cost.
    - hn_throwaway_99 6y ago
      Yeah, when it comes to capital gains I always thought it made the most sense to tax it as normal income but to index the basis against inflation.
    - herpderperator 6y ago
      In the US, investments held less than a year are taxed at normal income.
    - pkaye 6y ago
      Isn't Biden proposing to do that for those who earn more than $1M. Not sure how likely that will pass though.
    - innagadadavida 6y ago
      How about we abolish all taxes and just tax the total wealth? That will give people the incentive to work as opposed to making a quick buck and retiring.
      - bluedevil2k 6y ago
        How many people are looking to make a quick buck and retire? The people who are billionaires are billionaires because they are super competitive and super hard workers. Gates, Bezos, Jobs - you think they worked 8 hours a day when they were growing their companies? No, those guys are driven to succeed and that doesn’t just go away when you make X dollars.
        6y ago
  - deleted 6y ago
    [deleted]
  - xorcist 6y ago
    Medical doctors are paid pretty well, and that's a real job if there ever was one. It's interesting to see how that profession has held up so well, in almost all parts of the world, while others have slowly inflated supply to lower payments.
    - coldtea 6y ago
      >Medical doctors are paid pretty well, and that's a real job if there ever was one. On the other hand, the health industry (from drugs to hospitals) makes a shittoan of money, and most of it is by pushing BS on people and (in the US) by overcharging 10x simple procedures...
    - dahfizz 6y ago
      > while others have slowly inflated supply to lower payments. Could you give some examples? Real personal income has been rising pretty steadily for as long as the data has been collected [1]. So the median person earns more as the years go on, not less. [1] https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N
      - xorcist 6y ago
        Relative to other jobs, not in absolute terms (which isn't very meaningful to compare). Lots of specialized jobs start out well paid and then spread out over time as more enter the profession. Airline pilots, for example, used to be a lucrative job but isn't now. School teachers used to be paid well. Engineering is a bit of a mixed bag, but there are plenty of examples there too. Medical doctors is the common exception to this.
- rebelos 6y ago
  Your observations are coincidental and skewed by cognitive bias. A neurosurgeon is one obvious counterexample. The predominant determinant of labor compensation is substitutability.
  - Maarten88 6y ago
    > The predominant determinant of labor compensation is substitutability. Which proves the article right: the guy labored hard to move the proceeds of his partners work into a forest of trusts that only he knows and that only benefits him personally, by statute. He can't be substituted anymore!
    - rebelos 6y ago
      Labor compensation is a subset of compensation in the abstract (or, even more broadly, "return on time and capital"). Importantly, in most economies, it's typically set by employers hiring within an efficient labor market.
      - brmgb 6y ago
        I might have believed you before the covid epidemic but I think it definitely proved that wrong. We have a dearth of essential people. Nurses are a perfect example. Yet they keep being paid like crap. It is becoming clearer by the day that the job market is not an efficient market at all. Why keep pretending ?
        rebelos 6y ago
        First of all, everything is running remarkably smoothly given the circumstances. The Covid-19 statistics are largely a consequence of people acting individually out of self interest and ignorance, yielding negative systemic externalities, and not a dysfunction of the healthcare system. Furthermore, if you think about how insurance risk pooling works, it's quite easy to see how an insurance-backed, profit-motivated healthcare system may not be the best vehicle to address a systemic health problem afflicting the entire population. You may recall AIG as a rough analogue for this situation. Or even entities insuring against natural disasters in California. The government has to step in to prevent failure. And then we have the most obvious counterargument to your flawed thesis: why would labor compensation go up during a recession with high unemployment and considerable attendant macroeconomic instability? Those factors have contributed to dramatically increased substitutability and thus quite naturally suppress wage growth.
- newguy1234 6y ago
  Labor is not valued based on the "benefits to society" it provides. It is valued based on supply and demand. The low paid jobs are jobs that basically anyone can do with minimal education or on the job training. If those jobs were harder to do then they would certainly be paid more.
  - pixelbash 6y ago
    Some of the hardest jobs are underpaid, and level of education means less than it used to. Nurses and scientists for example. Partner is a microbiologist PHD graduate and starting salary wouldn't be much different my self taught first coding job - not that getting a job right now is really possible anyway.
lisper 6y ago
> I'm sure not all the ultrarich are like this What makes you so sure? At some level of wealth, it is essentially zero effort to engage in these shenanigans; you just hire someone to do it for you. The more money you have, the higher the return on this investment. At some point it becomes deeply irrational not to do it.
- hn_throwaway_99 6y ago
  It's only irrational not to do it if you're a completely self-centered asshole who derives no internal happiness from seeing others thrive. I can't believe the marginal increase in quality of life, happiness or life satisfaction is any different between someone worth $100 million compared to billions. If I was married to someone for decades, and decided to leave her for a newer model (shitty to begin with but bear with me), I would feel the value of leaving on at least decent terms would be worth a couple percent of my wealth.
  - seibelj 6y ago
    Just to play devil’s advocate we have no idea what is between this couple, or any couple for that matter, and are being presented with her side as he is silent. Sometimes people break up, and one person doesn’t want the other to get a single penny, whether they have $1 or $10 billion.
  - thrav 6y ago
    The end around this is convincing yourself that you’ll spend it better than the government would. There is a famous clip of Michael Dell saying as much at Davos. Bezos and Musk think they’re saving the human race by deploying their capitol towards the pursuit of life in space. Gates is attempting to make various diseases extinct. Soros is attempting to bring about a world more closely aligned to the philosophical ideals that shaped his early education. The richest of the rich usually have some pet project that they think is the most important thing in the world.
    - Shorel 6y ago
      And Gates, Bezos, and Musk are probably right. If anything, it is a much more efficient way to spend some resources. Instead of filling the bellies of thousands of red tape enabling workers, or spending that much money in pharmaceutical advertising.
el_nahual 6y ago
Here's a question. I find it abhorrent that 15%-30% of my tax dollars go to funding the military, dhs, nsa, etc. If one is a pacifist, is there an argument to be made that minimizing taxes is in fact the ethical thing to do?
- AnimalMuppet 6y ago
  No. Spend more of that money on lobbying, to get funding for the military, dhs, nsa, etc cut. For added bonus morality points, spend even more money providing aid or employment training for those who lose jobs in the process. Do not get super clever to pay less taxes, leave those who cannot avail themselves to such methods to pay more (or the government to go further into debt), and call that morality. Don't kid us, and don't kid yourself.
- egypturnash 6y ago
  Your tax dollars also go to the social safety net, education, funding the arts, maintaining roads, keeping parks nice places to visit, and a whole bunch of other stuff that is generally not in conflict with pacifism. Should these babies be thrown out with the military bathwater?
  - djKianoosh 6y ago
    The majority of these dollars in the US go to military bathwater. Perhaps there may be a way for citizens to earmark their preferences directly for where they feel their tax dollars should go. Yeah yeah go vote of course. But Congress acts too slow. I am talking about a more direct system, maybe with limits sure. But as it is, Congress has a lot of the purse strings, and maybe individual citizens could have more say-so with an improved system.
    - ashtonkem 6y ago
      Earmarking your own dollars for what you support might make you feel better, but it won’t change anything. Money is fungible by design, every dollar of yours that’s earmarked for welfare programs frees up someone else’s for the military. Sure, if everyone did that it would have an impact, but that seems pretty improbable.
dcolkitt 6y ago
Honest question? Do you believe it’s possible to sustain anything close to the levels of consumer wealth seen in US, Europe, or Australia without liquid and efficient financial capital markets? If so, how come since the industrial revolution, the wealthiest economies have always had the most liquid and sophisticated financial markets? (With the possible exception of a few natural resource states) Have you considered the possibility that financial liquidity is as essential for high consumer living standards as reliable electrical grids or fair court systems? Because the majority of economists would certainly say so.
- hn_throwaway_99 6y ago
  There is more than ample financial market liquidity without needing some of the brightest people in the world spending their time trying to shave half a millisecond off trade execution times.
  - ghufran_syed 6y ago
    How do you measure if the liquidity is "ample"? And does that necessarily mean it would stay "ample" if market volatility went up?
  - dcolkitt 6y ago
    "There is more than ample database performance without needing some of the brightest people in the world spending their time trying to shave half a millisecond off query execution times" Imagine someone making such a statement, without even bothering to talk to someone with actual expertise in the field of database technology. It's fine to be a layman on the topic, but it's not a good look to presume that you no more than the domain experts without even bothering to study their positions.
    - hn_throwaway_99 6y ago
      First of all, I have experience with HFT, so I know what I'm talking about. Second, your analogy doesn't make sense. HFT is only enabled as a byproduct of how electronic exchanges order their trades. They could just as easily bulk all orders by the second and then randomly order them to eliminate the benefit of, for example, building as close as possible to the exchange so you have a speed-of-light transit time benefit over your competitors.
neximo64 6y ago
Not to be critical but this sounds a bit like cognitive dissonance.
closeparen 6y ago
“No net benefit to society” is your personal value judgement. Other people necessarily made different value judgements when they exchanged billions of dollars in value for those things.
- thewarrior 6y ago
  Well gangsters, heroin smugglers and hit men probably got paid billions of dollars too. Pablo Escobar was one of the richest men in the world. And most of it was not stock but actual cash. Hence the fact that billions were paid for something does not in any way prove that it adds value to society.
  - closeparen 6y ago
    How has the whole “protect people from their preferences about drugs” thing been working out for us?

RestlessMind 6y ago

I support existence of Billionaires and even admire some of them, unlike the left flank of the Democratic party. However, after reading such shenanigans, I sincerely wish for a clean sweep for Democrats in the upcoming election, to be followed by an intense crackdown on all the crazy loopholes used by the ultra-rich to cheat on their partners or their governments. Ideally, if the new crop of leaders have any balls, they would make a prominent example of some asshole (Bosarge seems to fit that profile) just to send a message to everyone else. This was one mistake Obama did, when he went easy on all the Wall St idiots responsible for the GFC.

srtjstjsj 6y ago
What makes you think Democrats in government don't support billionaires?
- strathmeyer 6y ago
  Their tweets? The things they say to get elected?
  - AnimalMuppet 6y ago
    I notice that you didn't say "the policies they enact when they get elected".
- newguy1234 6y ago
  Democrats supposedly claim to want to "tax the rich" and give people social welfare programs. Of course at the same time democrats have been well known for corruption (see city of Chicago as an example) so I think their talk is rather fickle. Actions speak louder than words as they say.
- RestlessMind 6y ago
  Fair question - that's why I specifically called out Obama, and specifically referred to the left flank of Democrats (Bernie, Warren, AOC) who would back their rhetoric with some action. Warren, in particular, has demonstrated some good track record here with CFPB. I would certainly not expect anything from Biden, Schumer or Pelosi.

lifeisstillgood 6y ago

There are two approaches to this - one says something like "they have too much money, tax it and spend it on the poor / shaping society". The other is "if you stop people from earning bazillions you won't get innovation. I am not a fan of either particularly (well of course we want to tax people and spend it to create a better society, it's just that sentence is basically all politics ever, not a specific policy to enact) I prefer the idea that a billionaire is a market failure. It's not like there are no millionaires looking up and going, well that guy deserves his wealth and I am just going to accept my lot in life" If we see a billionaire in a given industry - let's ask "what regulations will they really really hate to see removed or created?"

coldtea 6y ago
>* The other is "if you stop people from earning bazillions you won't get innovation.* We had tons of innovation in the past (even more important things than today) when people didn't earn bazillions from them...
- robertlagrant 6y ago
  And now we have global reach. Windows can be sold everywhere for no extra cost. That was never the case before software. Spotting a trend is not as good as understanding a trend.
- ummonk 6y ago
  When? We’ve had more innovation in the last 200 years than any era before, and billionaires have been a fact of life during this period.
  - ironman1478 6y ago
    A lot of the innovations come from funding from the government. Things like green energy, the internet, and soon self driving cars all come from funding for the government, either through incentives (like the DARPA self driving challenges a few years ago) or just straight up state sponsored research. You don't need billionaires to make things happen. Also, I will ask, where are all the billionaires who actually spend their money to do good once they've amassed their wealth? Bill Gates has done this, but lots of these people are abject failures at actually using their money directly to do good. They might have innovated in while they were acquiring their money, but once they get it they don't seem so innovative anymore.

julius_set 6y ago

Think we need something better than the concept of money.

robertlagrant 6y ago
Money is just "the relative value of things and services". Whatever system put in place to measure relative value will be gameable, and will also have many legitimate winners whose win lots of people don't understand.
- dredmorbius 6y ago
  No, the relative value of stuff is independent of money, certainly of any one currency. Money facilitates exchange. Adam Smith argues this has primacy: "The sole use of money is to circulate consumable goods." Wealth of Nations. Other authors argue for characteristics. William Stanley Jevons properties aren't bulletproof in my view, but are a good departure point: utility and value, portability, indestructability, homogeneity, divisibility, stability of value, and cognisability. https://archive.org/details/cu31924013816172 https://archive.org/details/cu31924013816172
newguy1234 6y ago
Money is simply a tool used to facilitate the transfer of goods/services among people. You can use cryptocurrencies just as well or you can use direct barter but a common-use currency provides benefits that people enjoy.
- julius_set 6y ago
  I would say still thinking too narrowly, some interesting science fictions novels had knowledge as a form of currency in some technocratic societies (The Omar ~> Deus Ex Invisible War) Not saying this is the best solution but again different form of “currency / money.” Imagine you are a human who is part of a hive mind, (think Deus Ex Helios AI) you wouldn’t have a need for money.
dredmorbius 6y ago

unchocked 6y ago

Awful tabloid theatrics aside, the story illustrates the serious point that there is way too much opacity regarding money in our society. Bring it all out into the sunlight. Then figure out what policy should be.

AmericanChopper 6y ago

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

deleted 6y ago

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arminiusreturns 6y ago

If are interested in this topic and you haven't seen the independent documentary "The Spider's Web: Britain's Second Empire", you owe it to yourself. It's a superbly done documentary on a budget of ~4k£. https://www.youtube.com/watch?v=np_ylvc8Zj8 https://www.youtube.com/watch?v=np_ylvc8Zj8

m3kw9 6y ago

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

FireBeyond 6y ago
Because there are influential, and rich people who have a vested interest in making sure "loopholes" like this. And when enough outcry is raised, if ever, it'll be closed "just as soon as we can".