3 ms·

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

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.
  - vmception 5y ago
    You might be surprised how little of the US’ (or any country’s) infrastructure is used to generate money. You also might be surprised how little of the US’ tax revenue is used to support that infrastructure. This is why it would never constitute treason, while remaining a potential criminal charge.
    - randomopining 5y ago
      So how exactly do people get educated and products make it to market etc? There's a lot of "soft" infrastructure that you're forgetting too. That was part of Biden's point. There's hard infrastructure that everybody understands, and then there's the soft infrastructure like a well-educated workforce that can quickly adapt to the new market demands. An efficient (not wasteful, which is tough to make happen) investment in either would help the US in every way, publically and privately.
pembrook 5y ago
> The IRS doesn't care what you do with post-tax money! There is no prohibition on doing stuff outside the country No, the IRS absolutely does care what you do with your money abroad. If you create a foreign bank account (anywhere) they literally require said foreign bank to send a report every year of your assets. And the bank always complies, because the US treasury can restrict its ability to transact in US dollars. Also, as an American, having a foreign investment account is possibly the dumbest thing you can do. There’s extremely punitive taxes on foreign controlled investment accounts to the point it doesn’t make sense to hold any money abroad. Your advice may have been true pre-2000s but it is no longer the case in a post-FATCA world.
- vmception 5y ago
  Yes, foreign passive and controlled accounts can have punitive taxes on them in some circumstances Yes, a report is sent by the bank No, that has nothing to do with there being a problem or any liability for you. A report goes out to the IRS, so what. Was your main point to say "and therefore the IRS cares?" okay. It means nothing to them if there is no tax event.

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.
- vmception 5y ago
  You might be surprised how little of the US’ (or any country’s) infrastructure is used to generate money. You also might be surprised how little of the US’ tax revenue is used to support that infrastructure. This is why it would never constitute treason, while remaining a potential criminal charge.
  - randomopining 5y ago
    So how exactly do people get educated and products make it to market etc? There's a lot of "soft" infrastructure that you're forgetting too. That was part of Biden's point. There's hard infrastructure that everybody understands, and then there's the soft infrastructure like a well-educated workforce that can quickly adapt to the new market demands. An efficient (not wasteful, which is tough to make happen) investment in either would help the US in every way, publically and privately.

pembrook 5y ago

> The IRS doesn't care what you do with post-tax money! There is no prohibition on doing stuff outside the country No, the IRS absolutely does care what you do with your money abroad. If you create a foreign bank account (anywhere) they literally require said foreign bank to send a report every year of your assets. And the bank always complies, because the US treasury can restrict its ability to transact in US dollars. Also, as an American, having a foreign investment account is possibly the dumbest thing you can do. There’s extremely punitive taxes on foreign controlled investment accounts to the point it doesn’t make sense to hold any money abroad. Your advice may have been true pre-2000s but it is no longer the case in a post-FATCA world.

vmception 5y ago
Yes, foreign passive and controlled accounts can have punitive taxes on them in some circumstances Yes, a report is sent by the bank No, that has nothing to do with there being a problem or any liability for you. A report goes out to the IRS, so what. Was your main point to say "and therefore the IRS cares?" okay. It means nothing to them if there is no tax event.