17 ms·
What lies beneath: Evidence from leaked account data on offshore banking use
- mistrial9 5y agodiscussed here https://news.ycombinator.com/item?id=27089906 https://news.ycombinator.com/item?id=27089906
- samstave 5y agoI find it odd that the IRS does a lot of heavy lifting to go after Joe-Blue-Collar but completely seems blind to the thousands of money launderers both individuals and corps. Personally, I think the entire financial system is broken and should be squashed.
- varispeed 5y agoEven if Joe manages to evade $1000 in taxes, that won't even buy a good meal in a posh restaurant to even discuss the matter with a local politician. They are the easy target and they have no bribing power, so the have no sympathy of powers that be.
- ceejayoz 5y agoIntentional budget cuts and a harder target. https://www.propublica.org/article/irs-sorry-but-its-just-easier-and-cheaper-to-audit-the-poor https://www.propublica.org/article/irs-sorry-but-its-just-ea... > For now, the IRS says, while it agrees auditing more wealthy taxpayers would be a good idea, without adequate funding there’s nothing it can do. “Congress must fund and the IRS must hire and train appropriate numbers of [auditors] to have appropriately balanced coverage across all income levels,” the report said. > Since 2011, Republicans in Congress have driven cuts to the IRS enforcement budget; it’s more than a quarter lower than its 2010 level, adjusting for inflation.
- nostromo 5y agoBudget increases will not increase enforcement of rich, politically connected individuals. It will just increase the number of "low hanging fruit" middle-class people they will go after. Besides, many of the best tax evasion strategies are legal -- you just need an army of lawyers and a large pile of cash to deploy them.
- froh 5y agointeresting. what makes you think so?
- ipaddr 5y agoWith enough lawyers you can get a low settlement value if you are found wrong. Your average middle class person can't afford to risk taking the irs to court.
- deleted 5y ago[deleted]
- nostromo 5y agoIf you doubled or tripled the number of cops in LA, would they solve more difficult crimes in the monied and lawyered Hollywood Hills? Or would they go after more petty crime in South Central, where it’s easy to get a conviction?
- bananabreakfast 5y agothat's a poor comparison. The IRS are not cops, and the monied and lawyered do not commit petty crime at a high level whereas they do commit tax evasion at a much higher level.
- daniellarusso 5y agohttps://en.m.wikipedia.org/wiki/IRS_Criminal_Investigation https://en.m.wikipedia.org/wiki/IRS_Criminal_Investigation
- LorenPechtel 5y agoThe IRS doesn't do a lot of heavy lifting. The IRS does a lot of stuff that can be easily handled by a computer--matching up data from various sources to make sure it agrees. Once it needs a human eyeball, though, they do very little. It's just your Joe-Blue-Collar guy has most of his finances already reported to the IRS, anything wrong and the matching computer will catch it.
- NovemberWhiskey 5y agoThis is the truth of the matter. Most errors/fraud for Joe-Blue-Collar revolves around refundable tax credits as there's a pretty good chance he's not even paying any income tax. The EITC is particularly complex (blame Congress) and therefore error/fraud-prone, but many aspects of typical errors/fraud can be mechanically detected (is this a qualifying child? is this qualifying child being claimed on another return? is there undocumented non-W2/1099 income being used to support this claim?).
- TechBro8615 5y agoThey can also hire private companies to help, like they’re doing with crypto and some chain analysis company (I forget which, maybe multiple). It’s a bit frightening that the IRS can deputize a corporation but I guess with crypto you live by the sword, die by the sword. Maybe the dystopia imagined by crypto enthusiasts is a self-fulfilling prophecy. You get the government you prepare for?
- not2b 5y agoThe IRS was made to lay off of the rich by their friends in Congress. Their enforcement budgets have been cut.
- wpietri 5y agoYou might consider that your "it's all broken" feelings are exactly what is desired by the people who have worked to hamstring the IRS and generally tilt things in their favor. The more cynical individual voters are about the system, the easier it is for people with money and power to shift outcomes to the ones that benefit them. It's the political equivalent of a FUD strategy.
- germinalphrase 5y agoNext, you’re going to tell me that social security isn’t going to collapse any day now…
- pydry 5y agoThey've been saying it since the 30s. I guess eventually it has to collapse!
- deleted 5y ago[deleted]
- FredPret 5y agoYes, lets go back to the old ways. We’ll exchange seashells instead
- lbriner 5y agoThere is probably an easier conclusion and that is the cost/benefit analysis of chasing illegal money. Firstly, a lot of what is happening is legal or at least a grey-area. Secondly with the complexities of multi-juristiction money and 100s of layers of obscurity that a rich person can afford to put between them and their money (legally), would you bother spending 100s of 1000s of dollars looking into it after which you might not find anything that can be prosecuted? It costs little to look at a much simpler Joe-Blue-Collar worker. Sad but true. The only way I can imagine it being resolved is by requiring full traceability for all financial transactions so I can literally tell where all the money in an account originated from. Can't see that happening.
- dragosmocrii 5y agoMost countries around the world did not have an income tax for people before the WWI. It was introduced as a way to fund the wars (defense, akhem), and as a way to come out of the ruins. It was only meant to be a temporary measure. A century later, we're still paying the income tax, and for some countries that's still funding defense/wars... https://www.investopedia.com/articles/tax/10/history-taxes.asp https://www.investopedia.com/articles/tax/10/history-taxes.a...
- sig-reduction 5y ago> Personally, I think the entire financial system is broken and should be squashed. It's uglier than you can imagine.
- gundmc 5y agoWhy is Brookings eligible for a .edu TLD?
- mushufasa 5y agoRegistrars don't enforce TLDs in the way you implicitly assume.
- will4274 5y agoCare to explain or just snark? As best I can tell, Brookings would not be eligible since the rule change in 2001 but was grandfathered in before this (domain goes back to 1996). It's not clear why they weren't purged with the other non-universities squatting on edu in 2003 - I'd guess Brookings's political connections, frankly.
- deleted 5y ago[deleted]
- deleted 5y ago[deleted]
- lgats 5y agohttps://en.wikipedia.org/wiki/.edu#Grandfathered_uses https://en.wikipedia.org/wiki/.edu#Grandfathered_uses Domains that were already registered in edu as of October 29, 2001, were grandfathered into the system. Holders of such domain names can retain their edu domain names without regard to the current eligibility criteria. Brookings.edu was first registered 07-Sep-1996, so it would appear they are grandfathered in. Similar case for the S.F. museum, the exploratorium.edu https://domain.glass/Brookings.edu https://domain.glass/Brookings.edu
- xxpor 5y ago"Please note: The .edu Cooperative Agreement allows registrants that registered .edu domain names prior to the Agreement taking effect October 29, 2001, to retain those registrations regardless of whether the registrants meet the current .edu eligibility requirements, so long as they renew their registrations and otherwise follow domain policy" https://net.educause.edu/eligibility.htm https://net.educause.edu/eligibility.htm FWIW the Smithsonian also has a .edu address.
- internetslave 5y agoI have a conspiracy theory that there are far more rich people than we are lead to believe, also that most of us are just working to prop them up and keep them rich.
- slifin 5y agoI have a conspiracy theory that Forbes created the rich list Which intentionally does not have despots oligarchs or royals to skew the conversation to a business matter which can get lost in the left/right divide
- vmception 5y agoThe Forbes rich list has some criteria such as from their own revenue or share prices. Basically private market generated wealth. There are exceptions and the line gets blurred really quickly, but thats their stated goal.
- Ekaros 5y agoPretty simple with public companies. With private companies and current market it really does get messy. I'm thinking about Valve and how much higher it would be priced on public market compared to private... And that can't be only case. So the private market is quite dark place...
- vmception 5y agoYes, and most people aren't actually trying to be on the rich list. When I was in Monaco people were saying leave the bragging to the Americans. There is no transparency in the markets, thats also a distinctly American half-goal.
- sig-reduction 5y agoOP's conspiracy theory is absolutely true. There is a whole thread of academic research estimating the right tail of the wealth distribution (spoiler: the Fed household finances microdata is garbage). Diff the Bloomberg and Forbes rich lists... they're not the same list. One oligarch on those lists had their estimated net worth double after the Appleby leaks turned up some trusts. I'm pretty sure Bloomberg just calls people up and asks them how much they have.
- vmception 5y agoHey everyone, the wording dictates how you are misled. Think about the alternate title for these benign actions: Annual Report on Isle of Man financial sector Hackers breach Cayman National Bank and Trust’s Isle of Man subsidiary, the second of major breaches for this institution Post-Mortem, Cayman National Bank and Trust breach and client behavior Aggregating Customer trends sourced from hacked bank, using pytorch
- metalliqaz 5y agomisled how? "man dies after impact with car" is rightly reported as "man booked for manslaughter after hit-and-run" the technical details are perhaps not as important than the criminality that transpired
- vmception 5y agofollowing the analogy, this article and many others like it conflate offshore with criminality while occasionally saying "although use of licensed banks in these countries is not illegal [in the host country and the client's country of residence]" and then glossing over that for the rest of the research paper, never quantifying any use case even with leaked data, all to steer your emotions. The internet is a mirror, it tells you what you want to see. You should be most skeptical when things match your worst nightmare.
- metalliqaz 5y agoit is not technically criminal but deeply unfair. that's what people care about
- vmception 5y agoI can see that perspective From my view the absurdity is that people are concerned about why they arent being hosed equally by their own government’s revenue efforts instead of why they are being hosed at all This leads to a greater absurdity of demanding that another country - that has a balanced budget - take money that it doesnt need by taxing its customers and being mad when they say no. This requires a very special kind of hubris that I think people need to 1) recognize they have bought into 2) recognize that their neighbors don't subscribe to that train of thought and have been operating by a much more effective set of rules. So whatever you’ve been told is probably just a lie if it bothers you that this is usually legal. I'm not saying it is practical for their own country to balance their budget, or that their own country and citizens/representatives have a consensus mechanism for having a more fair revenue system whether by taxation or otherwise. I am saying that has nothing to do with countries that have figured out how to fund themselves by offering financial services, or the people that use them.
- TOSSAWAY_1 5y agoIf the IRS knows how much money I owe why dont they just send me a bill?
- tialaramex 5y ago1. There exist politicians who believe that forcing you to fill out the paperwork reminds you that taxes are evil. They're doing it for your own good, see? 2. There exist tax preparation companies which profit enormously from doing the paperwork for you and they'd miss out on that profit if the government just billed you.
- cle 5y agoIt's because they don't actually know how much taxes you owe. They aren't omniscient (thankfully) so they don't know e.g. how much in deductions you should have. (I agree that #2 is a big problem, but I don't think it's actually the reason we file taxes.)
- maxerickson 5y agoPeople mostly take the standard deduction. (85-90% of households in recent years)
- bananabreakfast 5y agoIt will be far more now after the Trump tax bill as well. You now have to be able to deduct over $24k to not take the standard deduction.
- jandrese 5y agoYes, but only because I got capped out on deductions before I exceeded what the standard deduction would give me. Increased my tax burden about 1.5% overall that year. Not as much the next year because I had much less charitable giving. Sure am glad I'm getting to pay for all of the stuff those rich people aren't anymore thanks to their massive tax break. Oh, and my taxes are supposed to increase even more once the Trump tax holiday for the middle class expires in 2025. Luckily for corporations it is permanent for them. That tax plan was the most blatant government handout to the 1% and for some reason 40% of Americans think it's the best tax plan ever.
- Layke1123 5y agoAnd people wonder why I make posts titled, "I hate capitalism, am I alone?"
- supernova87a 5y agoCan someone ELI5, what entities or convoluted mechanisms or businesses do very rich people create / have access to that they can minimize taxes, which the rest of us simply cannot take advantage of here in regular life?
- sumtechguy 5y agoYou can have the same tools but not necessarily the same connections. The issue is usually capital. Most people do not have it. For example take Paris Hilton. When she had her DUI a few years ago her 500k car got repo'd. Wah? She stopped making payments on it. Payments?! Because she probably had it going through some business expense structure and was probably literally writing off the interest and payments. More than likely the original money was borrowed against an existing capital asset. If the sale price of the car did not make up the difference they had to come up with whatever cash was left over. Like most repos. But in this case it was a fairly flashy car that held its value decently well. So they probably took a small loss. But there was never any real risk to owning it. Think of getting a HELEOC but running everything through that type of borrowing structure. But since you 'know a guy' you get the super awesome low interest rates. Which are business expenses. That flashy show of hers was a way to write a bunch of stuff off. Everything is an expense and a way to write it off your taxes. In some cases it does not even affect your taxes if you bury it in another company that is doing something similar that you control 100% of and just happens to be in a lower tax bracket. But gave you a sweetheart deal of leasing a yacht for a small amount per year for being such a good customer!
- Ekaros 5y agoAlso in some cases with cars by my understanding leasing makes lot more sense than buying. Like Rolls Royces where lease payments might be lower than depreciation. So do you actually buy this thing, or just the use of it. When later might overall be cheaper. It's get bit weird with some commodities.
- sumtechguy 5y agoGood point. Cars are not really a good asset except in very special cases. I should have probably picked a better example. They will many times borrow against an existing asset to basically buy/grow another asset. The 'fluff' is usually for tax writeoff if they can.