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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

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?

keiferski 6y ago
https://en.wikipedia.org/wiki/Panama_Papers https://en.wikipedia.org/wiki/Panama_Papers
- tuatoru 6y ago
  Also, 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 ago
Bullshit
deleted 6y ago
[deleted]
atonse 6y ago
Uh 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 ago
  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.
  - 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 ago
      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.
dundarious 6y ago
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-family-tax-havens?cat=politics&type=article https://www.theguardian.com/politics/2012/apr/20/cameron-fam...
- gamblor956 6y ago
  Cyprus 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 ago
    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.
ratsoman2 6y ago
Panama papers mean nothing to you?
- gamblor956 6y ago
  For 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.
  - ratsoman2 6y ago
    Thanks, I didn't realize what a small percentage the Americans were.
  - Fnoord 6y ago
    Cryptocurrencies get used for this purpose.
speleding 6y ago
Thee 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 ago
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.
ramblerman 6y ago
Switzerland 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 ago
Which PR firm do you work for?

keiferski 6y ago

https://en.wikipedia.org/wiki/Panama_Papers https://en.wikipedia.org/wiki/Panama_Papers

tuatoru 6y ago
Also, 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 ago

Bullshit

deleted 6y ago

[deleted]

atonse 6y ago

Uh 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 ago
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.
- 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 ago
    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.

dundarious 6y ago

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-family-tax-havens?cat=politics&type=article https://www.theguardian.com/politics/2012/apr/20/cameron-fam...

gamblor956 6y ago
Cyprus 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 ago
  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.

ratsoman2 6y ago

Panama papers mean nothing to you?

gamblor956 6y ago
For 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.
- ratsoman2 6y ago
  Thanks, I didn't realize what a small percentage the Americans were.
- Fnoord 6y ago
  Cryptocurrencies get used for this purpose.

speleding 6y ago

Thee 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 ago

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.

ramblerman 6y ago

Switzerland 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 ago

Which PR firm do you work for?