13 ms·

Wealthy Americans Targeted by U.S. in Panama Tax-Fraud Probe

160 points by pueblito 5y ago

deleted 5y ago
[deleted]
glup 5y ago
This was originally reported by Bloomberg and then the Boston Globe, https://www.bostonglobe.com/2021/07/29/business/wealthy-americans-targeted-by-us-panama-tax-fraud-probe/ https://www.bostonglobe.com/2021/07/29/business/wealthy-amer... To my knowledge, Bermuda Post is not a real journalistic organization in Bermuda (the major paper is the Royal Gazette). Instead, checking their about page reveals: 'BermudaPost is a non-profit, private and self-funded, commonly-created News and info-sharing platform that enables everybody to share valuable content such as local and global news updates.' Besides two suspiciously barebones property listings, there are no references to Bermuda.
- pueblito 5y ago
  Interesting. I saw it on Drudge Report and hadn’t seen it discussed here. DDG gave it a B+ so I just assumed it was reputable
  - seventytwo 5y ago
    Looking at Drudge Report was your first mistake
    - stjohnswarts 5y ago
      It's good to see what the other team is doing sometimes. I've seen stuff on DR that other places didn't host but was still interesting. It's not in the same OMGWTF category as newsmax or OAN despite what some HN people will tell you.
      - Blankenface 5y ago
        Lately I've seen HN people linking to sites like Newswars (which is infowars rebranded, it seems) and whatnot. > It's not in the same OMGWTF category as newsmax or OAN despite what some HN people will tell you. Drudge has a history chock full of conspiracy theories, retractions and dirty-deletes. All of which center around attacking liberal politicians or causes to "own" or "gotcha" them. Seriously, read the list that includes Obama birther conspiracies, Las Vegas shooting conspiracies, "immigrants setting wildfires" conspiracies (from Breitbart), and perpetuating hoaxes like "black man attacked McCain campaign staffer!": https://en.wikipedia.org/wiki/Drudge_Report https://en.wikipedia.org/wiki/Drudge_Report
        seventytwo 5y ago
        Agreed.
      - seventytwo 5y ago
        Fair…
    - jeffbee 5y ago
      I bet it was the last of a series of mistakes.
  - paul7986 5y ago
    I think DDG's site scoring is based on how many invasive trackers and advertising it has and not if a site's information is reputable. Though someone please correct me if I'm wrong?
    - approxim8ion 5y ago
      That is correct.
      - paul7986 5y ago
        Be interesting if they started to also add reputable content info to their site ranking .... like utilize one of those non-profit fact checking sites and score them based on how many of their articles over a period (3 to 6 months) or long periods of time (a year) was not factual .. truth bent ... etc. If it was done well and became popular it might cut down on clickbait and the tons of trash that is pushed out as truth but isn't.
- hubrix 5y ago
  It'd be a really cool if there was a browser plugin that showed you the provenance of any news you read. Like first appeared here, then here then here....
  - deleted 5y ago
    [deleted]
  - justicezyx 5y ago
    Block chain is rudimanting about throwing himself into the discussion :)
    - secondaryacct 5y ago
      *Without burning coals in every corner of the planet when a simple trusted db suffices at 0.01% of the cost
      - fouc 5y ago
        But how can you trust the truth if it hasn't been NFT'd?
        deleted 5y ago
        [deleted]
- Blankenface 5y ago
  I've noticed that HN has a bizarre preference for really strange news outlets and blogs over more credible and reputable outlets. Like..there will be some major news even in tech or science and HN is like "link to a major site? Naaaaah, Joenews.com!"
  - smnrchrds 5y ago
    I think it's mostly because editorializing titles is not allowed. So to emphasize the part you deem most important in a story, you have to find an article that uses it as the title.
  - pjc50 5y ago
    This is an internet culture problem in general. People have decided they can't trust the "mainstream media", possibly for valid reasons, and then fall face-first into trusting all sorts of completely random sites. Your other comment is very correct.
  - iamben 5y ago
    I've also wondered this - but I assumed it was more because most people post on HN after seeing it elsewhere. As the more 'strange' outlets (often) favour clickbait titles they get more shares/go viral more often (because people love to share without reading the full article). So I figure there's a greater chance someone will see the stranger version on social media over the (perhaps) stuffier/dryer version with the decent reporting from a more credible and less clickbaity outlet. As an aside, HN is usually pretty good about switching the link for something better when prompted.
  - meragrin_ 5y ago
    I wonder whether it is more a timing issue. Mainstream sites are submitted first, but overlooked. Subsequent submissions have to use other sites and those are the ones which finally gain traction.
  - oefrha 5y ago
    Major news outlets carry a small ranking penalty on HN (it's in the software), since loads of uninteresting articles from major news outlets are constantly submitted. The URL can always be changed if there's a better source. Just email them.
vmception 5y ago
You can avoid this by having your lawyer do the contacting as well as fund transfers from their IOLTA. For you as an individual you have to realize that the state doesn't know who your lawyers are. They might know you have A lawyer, they don't know all the lawyers you have. Piercing a lawyer's records is more expensive for the government to both rationalize and do and use as evidence, and just adds another layer for them to just stick with focusing on the lower hanging fruit. This is more about avoiding scrutiny just because some other business got subpoena'd, actually report/pay your taxes though. There are other ways to shield assets and compliantly reduce taxes domestically.
- deleted 5y ago
  [deleted]
DudeInBasement 5y ago
Meh, a couple of '10% for the big guys later' and nothing will happen
mannykannot 5y ago
If the US seeks to find out which Americans are involved in tax fraud, it will, ipso facto, target the wealthy ones along with the rest.
- koolba 5y ago
  I’d expect the larger the fraud, the more likely for them to be wealthy. It likely tapers off as I don’t expect Bezos to risk jail time to save a few bucks, but I’d bet you’ll have more at the single and double digit millionaire than say the sub $100K net worth.
  - Swizec 5y ago
    Rumor has it a low 7-figure business is most likely to get audited. Big enough to be worth it, small enough to be shady.
    - fighterpilot 5y ago
      It's easier to hide when you only have 3 or 4 employees, can do all the books yourself and deal in cash. A bit harder (but still possible) when you have 200 employees and a CFO, more people need to be on board with the fraud.
Steven-Clarke 5y ago
Mapped: The World’s Biggest Private Tax Havens https://www.visualcapitalist.com/worlds-biggest-private-tax-havens/ https://www.visualcapitalist.com/worlds-biggest-private-tax-... Panama is the 15th.
- _trampeltier 5y ago
  Why is Switzerland so high on the list? We might have low taxes for companys, but since many years now, other countrys get all information about the customers. So if an us person open an account, they send all information about it to the us. I think this is at least since 15 .. 20 years now.
  - mastax 5y ago
    The score is a combination of the amount of wealth stored and the degree to which wealth is able to be hidden in that jurisdiction. Notice that the US is number 2 on the list. It may be a heavily scrutinized jurisdiction and thus not a great tax haven in the traditional sense, but there are still huge amounts of capital moved there. They can still be useful, especially to move funds away from your country of residence's jurisdiction.
    - zz865 5y ago
      Wyoming, Nevada + some others have strict secrecy laws for LLCs which are great for hiding money from tax authorities. https://www.theatlantic.com/national/archive/2016/04/panama-papers-nevada/476994/ https://www.theatlantic.com/national/archive/2016/04/panama-...
      - vmception 5y ago
        It's all a matter of reading comprehension. People can have a passing knowledge of "something about Delaware" for the next 100 years and never consider that there are 55+ other jurisdictions under the US brand which aim to be competitive too. All states, the district, the territories, and even reservations have incorporation laws. The reservations are very numerous and many have not even considered the possibility, just show up and ask them to pass your model incorporation law. This is the kind of opportunity that the US still has. (There are many jurisdictions that have passed good laws, but have incompetent and ill equipped executive branches. If nobody has ever shown up to form their super awesome business type, the public servants in the state might not actually know how to do it. Whereas places with validation like Wyoming and Delaware, can have turn around times of 24 hours for things they do often.) The other way that the US is somewhat unique, in comparison to other countries, is that there is no way to incorporate a business at the national level. Only Congress can create corporations, one at a time, one law at a time, and Congress has never addressed or delegated this to change this reality. The national government derives its power from the states and has never bothered them over this. (They did recently pass some registry of business owners law though, but it's more of a feel good thing for activists than anything practical.) The beauty of this is that the US has an easier time pointing its bullying efforts outwards, whereas all US jurisdictions escape scrutiny by the US or OECD or other multinational bodies that put "tax havens" on blacklists. States compete for business, so this makes more and more favorable business incorporation laws pretty easy to get. The last thing I'll say is that there are other countries similar to the structure of the US, where there are many obscure states you can actually create business entities in. Some countries have incorporation at the national and the state level, just because the separate jurisdictions passed the laws. Some countries you might not even notice are federations of smaller states. So again, its all about reading comprehension. The usefulness of this knowledge is that some countries brands might attract scrutiny now (ie. "Panama corporation"), while the state level version is completely benign to everyone because they just haven't seen the name and aren't allergic to it.
umeshunni 5y ago
This is the actual press release from the DoJ/IRS about these cases: https://www.justice.gov/usao-sdny/pr/irs-obtains-court-order-authorizing-summonses-records-relating-us-taxpayers-who-used https://www.justice.gov/usao-sdny/pr/irs-obtains-court-order...
vmception 5y ago
We all assume they're avoiding taxes but the funny thing about this is that you can treat this stuff like Roth IRAs, just pay your taxes one year and then just use the post-tax money to create entities offshore and hold assets indefinitely. The IRS doesn't care what you do with post-tax money! There is no prohibition on doing stuff outside the country, there are no capital controls for US citizens. The main difference is the secrecy and lack of scrutiny. Even if you have judgement proof trusts and retirement plans like Roth IRAs, people still get to know about them. And they have withdrawal restrictions. So there is utility in disappearing some of the money that you already paid taxes on into a better jurisdiction for that purpose. The key point is already paid taxes on. Example of utility being when you get charged with something and you get your assets frozen so you can't even pay a lawyer making it difficult to afford your rights as a US citizen. Well, now you can lol because you were still liquid. There are other ways to do it too, this is one way. It takes a pretty weird and creepy level of nationalist hubris to think your money needs to stay in the country, but I would say this brainwashing has been largely successful in creating a stigma at least. Except to people that matter. Pay your taxes though.
- pyronik19 5y ago
  As we move more and more towards collectivism... it was never your money... its the governments money.... they just let you use some of it for a time... if you have the right politics and you don't piss off the wrong people. The China model.
  - randomopining 5y ago
    So how did these people use economies of scale AND also have a legal and physical protection against other people stealing it? In the old days, the rich would have to hire their own small defense/army just to protect their riches from being stolen. And we're not even talking about the public road/education/health/communications system that allows their products to be made and delivered to customers that pay the money that becomes their profits. From the above you can see that the these people want to "ride free" off the backs of people that pay their share back into the system. It should be treason.
jokoon 5y ago
I really believe that tax dodging and evasion are the biggest source of social inequality. Less budget for the state or government means less redistribution and less public services, meaning the poor becomes poorer. What's crazy is that as a european, would I talk about taxes on hacker news or reddit, I will always encounter libertarians who are arguing that taxes are bad.
- SCUSKU 5y ago
  "Tax = bad" thinking is basically a core pillar of the American way of thinking, unfortunately.
  - danuker 5y ago
    I argue that due to this selfishness, the US has the best local purchasing power in the world: https://www.numbeo.com/cost-of-living/gmaps.jsp?indexToShow=getPurchasingPowerInclRentIndex https://www.numbeo.com/cost-of-living/gmaps.jsp?indexToShow=...
- simonh 5y ago
  Firstly inequality growth is mainly an American phenomenon, it's not really a factor in the developed world generally. The problem is the Pickety/Zucman analysis didn't fully take into account taxes and transfers, so it overestimated 1%-er incomes and underestimated low wage earner benefits. Within the US, CHIP and Medicaid expansion have made a huge difference. After all it's hard to argue Medicaid expansion has no effect on inequality. Another major area of anomaly is that the P/Z analysis assumed income from pass-through businesses was capital gains. It turns out, this includes a lot of doctors, lawyers, etc whose income comes form these kinds of business structures. That made it look like their income was capital gains from investments in businesses, where in fact it's really labour income. This is not a small discrepancy, there are a lot of these sorts of people and they earn a lot. Correct for these sorts of things and the inequality largely evaporates. Anyway, it's a messy problem with a million details and there are still distortions in the economy that disproportionately benefit the wealthy and always have done. I disagree tax evasion is such a big factor, it's a problem but a relatively constant one. I think the main problems are mostly structural distortions in the tax system that encourage passive incomes. Income from rents and inheritance are significant issues. The drastic rise in property prices across the developed world is a huge problem that disproportionately hurts low income groups.
noja 5y ago
"Targeted" implies they are a poor defenceless victim. What a weird choice of word.
randomopining 5y ago
These people use economies of scale AND also have a legal and physical protection against other people stealing their riches. In the old days, the rich would have to hire their own small defense/army just to protect their riches from being stolen. And we're not even talking about the public road/education/health/communications system that allows their products to be made and delivered to customers that pay the money that becomes their profits. From the above you can see that the these people want to "ride free" off the backs of people that pay their share back into the system. It should be treason.
- temporallobe 5y ago
  Not sure I agree with the notion of this being treason, but it’s a pretty serious crime, considering that most wage-based workers (W-2, 1099 in the US) are absolutely lambasted with taxes (especially in certain states), and there is pretty much no way around it aside from hiring an accountant to come up with legal ways to help you reduce your tax liability. But for the most part, you’ll still have to pay a pretty ridiculous rate, especially as you earn higher levels of income (when things like AMT kick in). It burns me that I, a wage-based employee, am bearing a completely unfair proportion of the burden of the infrastructure costs of my country. My effective tax rate can be around 40%, yet the “rich” (whatever that actually means) can, in many cases, avoid taxes altogether by hiding assets and obfuscating their true net worth. So yeah, maybe it should be treason.

160 points by pueblito 5y ago

deleted 5y ago

[deleted]

glup 5y ago

This was originally reported by Bloomberg and then the Boston Globe, https://www.bostonglobe.com/2021/07/29/business/wealthy-americans-targeted-by-us-panama-tax-fraud-probe/ https://www.bostonglobe.com/2021/07/29/business/wealthy-amer... To my knowledge, Bermuda Post is not a real journalistic organization in Bermuda (the major paper is the Royal Gazette). Instead, checking their about page reveals: 'BermudaPost is a non-profit, private and self-funded, commonly-created News and info-sharing platform that enables everybody to share valuable content such as local and global news updates.' Besides two suspiciously barebones property listings, there are no references to Bermuda.

pueblito 5y ago
Interesting. I saw it on Drudge Report and hadn’t seen it discussed here. DDG gave it a B+ so I just assumed it was reputable
- seventytwo 5y ago
  Looking at Drudge Report was your first mistake
  - stjohnswarts 5y ago
    It's good to see what the other team is doing sometimes. I've seen stuff on DR that other places didn't host but was still interesting. It's not in the same OMGWTF category as newsmax or OAN despite what some HN people will tell you.
    - Blankenface 5y ago
      Lately I've seen HN people linking to sites like Newswars (which is infowars rebranded, it seems) and whatnot. > It's not in the same OMGWTF category as newsmax or OAN despite what some HN people will tell you. Drudge has a history chock full of conspiracy theories, retractions and dirty-deletes. All of which center around attacking liberal politicians or causes to "own" or "gotcha" them. Seriously, read the list that includes Obama birther conspiracies, Las Vegas shooting conspiracies, "immigrants setting wildfires" conspiracies (from Breitbart), and perpetuating hoaxes like "black man attacked McCain campaign staffer!": https://en.wikipedia.org/wiki/Drudge_Report https://en.wikipedia.org/wiki/Drudge_Report
      - seventytwo 5y ago
        Agreed.
    - seventytwo 5y ago
      Fair…
  - jeffbee 5y ago
    I bet it was the last of a series of mistakes.
- paul7986 5y ago
  I think DDG's site scoring is based on how many invasive trackers and advertising it has and not if a site's information is reputable. Though someone please correct me if I'm wrong?
  - approxim8ion 5y ago
    That is correct.
    - paul7986 5y ago
      Be interesting if they started to also add reputable content info to their site ranking .... like utilize one of those non-profit fact checking sites and score them based on how many of their articles over a period (3 to 6 months) or long periods of time (a year) was not factual .. truth bent ... etc. If it was done well and became popular it might cut down on clickbait and the tons of trash that is pushed out as truth but isn't.
hubrix 5y ago
It'd be a really cool if there was a browser plugin that showed you the provenance of any news you read. Like first appeared here, then here then here....
- deleted 5y ago
  [deleted]
- justicezyx 5y ago
  Block chain is rudimanting about throwing himself into the discussion :)
  - secondaryacct 5y ago
    *Without burning coals in every corner of the planet when a simple trusted db suffices at 0.01% of the cost
    - fouc 5y ago
      But how can you trust the truth if it hasn't been NFT'd?
      - deleted 5y ago
        [deleted]
Blankenface 5y ago
I've noticed that HN has a bizarre preference for really strange news outlets and blogs over more credible and reputable outlets. Like..there will be some major news even in tech or science and HN is like "link to a major site? Naaaaah, Joenews.com!"
- smnrchrds 5y ago
  I think it's mostly because editorializing titles is not allowed. So to emphasize the part you deem most important in a story, you have to find an article that uses it as the title.
- pjc50 5y ago
  This is an internet culture problem in general. People have decided they can't trust the "mainstream media", possibly for valid reasons, and then fall face-first into trusting all sorts of completely random sites. Your other comment is very correct.
- iamben 5y ago
  I've also wondered this - but I assumed it was more because most people post on HN after seeing it elsewhere. As the more 'strange' outlets (often) favour clickbait titles they get more shares/go viral more often (because people love to share without reading the full article). So I figure there's a greater chance someone will see the stranger version on social media over the (perhaps) stuffier/dryer version with the decent reporting from a more credible and less clickbaity outlet. As an aside, HN is usually pretty good about switching the link for something better when prompted.
- meragrin_ 5y ago
  I wonder whether it is more a timing issue. Mainstream sites are submitted first, but overlooked. Subsequent submissions have to use other sites and those are the ones which finally gain traction.
- oefrha 5y ago
  Major news outlets carry a small ranking penalty on HN (it's in the software), since loads of uninteresting articles from major news outlets are constantly submitted. The URL can always be changed if there's a better source. Just email them.

vmception 5y ago

You can avoid this by having your lawyer do the contacting as well as fund transfers from their IOLTA. For you as an individual you have to realize that the state doesn't know who your lawyers are. They might know you have A lawyer, they don't know all the lawyers you have. Piercing a lawyer's records is more expensive for the government to both rationalize and do and use as evidence, and just adds another layer for them to just stick with focusing on the lower hanging fruit. This is more about avoiding scrutiny just because some other business got subpoena'd, actually report/pay your taxes though. There are other ways to shield assets and compliantly reduce taxes domestically.

deleted 5y ago
[deleted]

DudeInBasement 5y ago

Meh, a couple of '10% for the big guys later' and nothing will happen

mannykannot 5y ago

If the US seeks to find out which Americans are involved in tax fraud, it will, ipso facto, target the wealthy ones along with the rest.

koolba 5y ago
I’d expect the larger the fraud, the more likely for them to be wealthy. It likely tapers off as I don’t expect Bezos to risk jail time to save a few bucks, but I’d bet you’ll have more at the single and double digit millionaire than say the sub $100K net worth.
- Swizec 5y ago
  Rumor has it a low 7-figure business is most likely to get audited. Big enough to be worth it, small enough to be shady.
  - fighterpilot 5y ago
    It's easier to hide when you only have 3 or 4 employees, can do all the books yourself and deal in cash. A bit harder (but still possible) when you have 200 employees and a CFO, more people need to be on board with the fraud.

Steven-Clarke 5y ago

Mapped: The World’s Biggest Private Tax Havens https://www.visualcapitalist.com/worlds-biggest-private-tax-havens/ https://www.visualcapitalist.com/worlds-biggest-private-tax-... Panama is the 15th.

_trampeltier 5y ago
Why is Switzerland so high on the list? We might have low taxes for companys, but since many years now, other countrys get all information about the customers. So if an us person open an account, they send all information about it to the us. I think this is at least since 15 .. 20 years now.
- mastax 5y ago
  The score is a combination of the amount of wealth stored and the degree to which wealth is able to be hidden in that jurisdiction. Notice that the US is number 2 on the list. It may be a heavily scrutinized jurisdiction and thus not a great tax haven in the traditional sense, but there are still huge amounts of capital moved there. They can still be useful, especially to move funds away from your country of residence's jurisdiction.
  - zz865 5y ago
    Wyoming, Nevada + some others have strict secrecy laws for LLCs which are great for hiding money from tax authorities. https://www.theatlantic.com/national/archive/2016/04/panama-papers-nevada/476994/ https://www.theatlantic.com/national/archive/2016/04/panama-...
    - vmception 5y ago
      It's all a matter of reading comprehension. People can have a passing knowledge of "something about Delaware" for the next 100 years and never consider that there are 55+ other jurisdictions under the US brand which aim to be competitive too. All states, the district, the territories, and even reservations have incorporation laws. The reservations are very numerous and many have not even considered the possibility, just show up and ask them to pass your model incorporation law. This is the kind of opportunity that the US still has. (There are many jurisdictions that have passed good laws, but have incompetent and ill equipped executive branches. If nobody has ever shown up to form their super awesome business type, the public servants in the state might not actually know how to do it. Whereas places with validation like Wyoming and Delaware, can have turn around times of 24 hours for things they do often.) The other way that the US is somewhat unique, in comparison to other countries, is that there is no way to incorporate a business at the national level. Only Congress can create corporations, one at a time, one law at a time, and Congress has never addressed or delegated this to change this reality. The national government derives its power from the states and has never bothered them over this. (They did recently pass some registry of business owners law though, but it's more of a feel good thing for activists than anything practical.) The beauty of this is that the US has an easier time pointing its bullying efforts outwards, whereas all US jurisdictions escape scrutiny by the US or OECD or other multinational bodies that put "tax havens" on blacklists. States compete for business, so this makes more and more favorable business incorporation laws pretty easy to get. The last thing I'll say is that there are other countries similar to the structure of the US, where there are many obscure states you can actually create business entities in. Some countries have incorporation at the national and the state level, just because the separate jurisdictions passed the laws. Some countries you might not even notice are federations of smaller states. So again, its all about reading comprehension. The usefulness of this knowledge is that some countries brands might attract scrutiny now (ie. "Panama corporation"), while the state level version is completely benign to everyone because they just haven't seen the name and aren't allergic to it.

umeshunni 5y ago

This is the actual press release from the DoJ/IRS about these cases: https://www.justice.gov/usao-sdny/pr/irs-obtains-court-order-authorizing-summonses-records-relating-us-taxpayers-who-used https://www.justice.gov/usao-sdny/pr/irs-obtains-court-order...

vmception 5y ago

We all assume they're avoiding taxes but the funny thing about this is that you can treat this stuff like Roth IRAs, just pay your taxes one year and then just use the post-tax money to create entities offshore and hold assets indefinitely. The IRS doesn't care what you do with post-tax money! There is no prohibition on doing stuff outside the country, there are no capital controls for US citizens. The main difference is the secrecy and lack of scrutiny. Even if you have judgement proof trusts and retirement plans like Roth IRAs, people still get to know about them. And they have withdrawal restrictions. So there is utility in disappearing some of the money that you already paid taxes on into a better jurisdiction for that purpose. The key point is already paid taxes on. Example of utility being when you get charged with something and you get your assets frozen so you can't even pay a lawyer making it difficult to afford your rights as a US citizen. Well, now you can lol because you were still liquid. There are other ways to do it too, this is one way. It takes a pretty weird and creepy level of nationalist hubris to think your money needs to stay in the country, but I would say this brainwashing has been largely successful in creating a stigma at least. Except to people that matter. Pay your taxes though.

pyronik19 5y ago
As we move more and more towards collectivism... it was never your money... its the governments money.... they just let you use some of it for a time... if you have the right politics and you don't piss off the wrong people. The China model.
- randomopining 5y ago
  So how did these people use economies of scale AND also have a legal and physical protection against other people stealing it? In the old days, the rich would have to hire their own small defense/army just to protect their riches from being stolen. And we're not even talking about the public road/education/health/communications system that allows their products to be made and delivered to customers that pay the money that becomes their profits. From the above you can see that the these people want to "ride free" off the backs of people that pay their share back into the system. It should be treason.

jokoon 5y ago

I really believe that tax dodging and evasion are the biggest source of social inequality. Less budget for the state or government means less redistribution and less public services, meaning the poor becomes poorer. What's crazy is that as a european, would I talk about taxes on hacker news or reddit, I will always encounter libertarians who are arguing that taxes are bad.

SCUSKU 5y ago
"Tax = bad" thinking is basically a core pillar of the American way of thinking, unfortunately.
- danuker 5y ago
  I argue that due to this selfishness, the US has the best local purchasing power in the world: https://www.numbeo.com/cost-of-living/gmaps.jsp?indexToShow=getPurchasingPowerInclRentIndex https://www.numbeo.com/cost-of-living/gmaps.jsp?indexToShow=...
simonh 5y ago
Firstly inequality growth is mainly an American phenomenon, it's not really a factor in the developed world generally. The problem is the Pickety/Zucman analysis didn't fully take into account taxes and transfers, so it overestimated 1%-er incomes and underestimated low wage earner benefits. Within the US, CHIP and Medicaid expansion have made a huge difference. After all it's hard to argue Medicaid expansion has no effect on inequality. Another major area of anomaly is that the P/Z analysis assumed income from pass-through businesses was capital gains. It turns out, this includes a lot of doctors, lawyers, etc whose income comes form these kinds of business structures. That made it look like their income was capital gains from investments in businesses, where in fact it's really labour income. This is not a small discrepancy, there are a lot of these sorts of people and they earn a lot. Correct for these sorts of things and the inequality largely evaporates. Anyway, it's a messy problem with a million details and there are still distortions in the economy that disproportionately benefit the wealthy and always have done. I disagree tax evasion is such a big factor, it's a problem but a relatively constant one. I think the main problems are mostly structural distortions in the tax system that encourage passive incomes. Income from rents and inheritance are significant issues. The drastic rise in property prices across the developed world is a huge problem that disproportionately hurts low income groups.

noja 5y ago

"Targeted" implies they are a poor defenceless victim. What a weird choice of word.

randomopining 5y ago

These people use economies of scale AND also have a legal and physical protection against other people stealing their riches. In the old days, the rich would have to hire their own small defense/army just to protect their riches from being stolen. And we're not even talking about the public road/education/health/communications system that allows their products to be made and delivered to customers that pay the money that becomes their profits. From the above you can see that the these people want to "ride free" off the backs of people that pay their share back into the system. It should be treason.

temporallobe 5y ago
Not sure I agree with the notion of this being treason, but it’s a pretty serious crime, considering that most wage-based workers (W-2, 1099 in the US) are absolutely lambasted with taxes (especially in certain states), and there is pretty much no way around it aside from hiring an accountant to come up with legal ways to help you reduce your tax liability. But for the most part, you’ll still have to pay a pretty ridiculous rate, especially as you earn higher levels of income (when things like AMT kick in). It burns me that I, a wage-based employee, am bearing a completely unfair proportion of the burden of the infrastructure costs of my country. My effective tax rate can be around 40%, yet the “rich” (whatever that actually means) can, in many cases, avoid taxes altogether by hiding assets and obfuscating their true net worth. So yeah, maybe it should be treason.