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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 inv
by dundarious 6y ago
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...")
- pembrook 6y agoIt'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?
- keiferski 6y agohttps://en.wikipedia.org/wiki/Panama_Papers https://en.wikipedia.org/wiki/Panama_Papers
- tuatoru 6y agoAlso, https://www.icij.org/investigations/fincen-files/global-banks-defy-u-s-crackdowns-by-serving-oligarchs-criminals-and-terrorists/ https://www.icij.org/investigations/fincen-files/global-bank... Banks saying one thing and doing another.
- hobby-coder-guy 6y agoBullshit
- deleted 6y ago[deleted]
- atonse 6y agoUh what? 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.
- pembrook 6y agoFATCA 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.
- Retric 6y ago> 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.
- dismantlethesun 6y agoYour 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.
- dundarious 6y agoI'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-family-tax-havens?cat=politics&type=article https://www.theguardian.com/politics/2012/apr/20/cameron-fam...
- gamblor956 6y agoCyprus is not a tax haven. The Cyprus Papers were about people paying for Cyprus citizenship to get the benefits of being a citizen of the EU.
- dundarious 6y agoA 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.
- ratsoman2 6y agoPanama papers mean nothing to you?
- gamblor956 6y agoFor an American? They mean nothing. The list of Americans in the Panama Papers is extremely small, and all of them shifted their money before 9/11. It's simply not possible to do stuff like that anymore.
- speleding 6y agoThee are other reasons to move local than hiding money, Cyprus is famous for agreeable estate tax. Seems a likely candidate given Eric Schmidt's age.
- michaelrosmer 6y agoYes 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.
- ramblerman 6y agoSwitzerland perhaps, but there is still plenty of tax evasion going on in the middle east and Dubai for instance. That being said, I think you are right about Schmidt. It can't be for something so simple, being that high profile.
- hobby-coder-guy 6y agoWhich PR firm do you work for?
- m0zg 6y agoWouldn'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?
- tlarkworthy 6y agoIt's an easy way for European citizenship
- m0zg 6y agoA 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.
- tlarkworthy 6y agoUm, 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. [1] https://taxfoundation.org/wealth-tax-europe/ https://taxfoundation.org/wealth-tax-europe/
- ryanlol 6y agoHe does not need to be a citizen to form a business or establish tax residency in Cyprus.
- michaelrosmer 6y agoHe 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 4. You're creating a back up plan for yourself
- michaelrosmer 6y agoHaving a foreign citizenship doesn't change your ability to use international structures to reduce your taxes unless you give up your US citizenship. It is possible to use such structures in some cases without needing to give up your US citizenship. But there are plenty of non-tax reasons to get a second citizenship.