3 ms·

Assuming this is anything like the US, capital gains and interest both count as income. Your (probably) not in trouble here simply for being a savvy investor.

Assuming this is anything like the US, capital gains and interest both count as income. Your (probably) not in trouble here simply for being a savvy investor. Obviously, INAL and definitely not a Russian Lawyer.

derefr 5y ago
You missed the key point: it’s lifetime-to-date net worth (heuristic: current bank account balances) vs. recent income. As in, if you make X per year; and you have >3X in savings from Y>3 years of spending (a lot) less than you make and stuffing the difference under a mattress, then all your savings in excess of 3X get confiscated. In other words, similar to people on welfare in America, public servants in Russia are now not allowed to retain assets in excess of a certain limit proportional to their income—even when that income all came directly from their (government) job. This is analogous to a progressive wealth tax, but not the same; as a wealth tax still allows disproportionate wealth growth for the highest-income earners; while the goal of this measure is to leave you with at most exactly three years of however-much you’re currently making, and nothing more, no matter what your assets looked like before that. The key “feature” to observe about this approach, IMHO, is that under this system people who are close to the savings cap already, are incentivized to spend every ruble they make, as any extra “left over” come audit time will be taken away. (It’s a bit like the game-theoretic consequences of yearly-limit insurance coverage, actually!)
- cultofmetatron 5y ago
  my first thought was "maybe they'll buy into gold or bitcoin" but then who's going to be accepting rubles for gold or bitcoin at this point. The Ruble is essentially worthless now.
- Volundr 5y ago
  > You missed the key point: it’s lifetime-to-date net worth (heuristic: current bank account balances) vs. recent income. I've now reread the original article several times, and I can't figure out where your getting that from. The phrasing used in the article is "If it turns out that the proceeds from them exceed the total income of the official and his relatives for three years by more than 10,000 rubles", which I can't parse into that and the source for the article appears to both be down and Russian, so I guess I'll take your word for it.
  - db48x 5y ago
    “proceeds from them” = the amount in all of your accounts and the accounts of your relatives (no definition given here but presumably they mean your dependents). “total income … for three years” = you and your relatives/dependents income for the last three years. “X exceeds Y by more than ₽10,000” = X > Y + ₽10,000. Let’s make up some numbers and see where they lead. Suppose that you are a middle–aged civil servant and your salary has been ₽100,000 for the last three years. Y = ₽300,000, obviously. You’ve been saving for your whole life, so the sum total of all of your accounts, X, is ₽500,000. Most of that is in whatever the Russian equivalent of pensions or 401ks are, so they have been earning money for you. Either collecting interest, or by gaining value on the stock market or whatever. Let’s say that your average growth over the last 3 years was 5%. That means you earned ₽68,000 in interest over those three years. Assuming that this adds into Y, your total income, then Y is ₽368,000. Well, ₽500,000 is certainly larger than ₽378,000, so your name comes to the attention of the prosecutor. However, I disagree that this means that you automatically lose anything. The article says: “In order not to lose money, the official will have to prove the legality of their appearance on the account.” Presumably then you won’t lose anything if your records show that you obtained it all legally. On the one hand, you do want to catch corrupt officials who have been taking bribes or kickbacks. On the other hand, choosing this means to do it seems counter–productive, since you have to expect that everyone who is saving up for retirement in some way will qualify for investigation. Since the criteria for investigation are not correlated with the crime that they are trying to detect, they are going to have all the false positives.
    - derefr 5y ago
      > Presumably then you won’t lose anything if your records show that you obtained it all legally. That presumes you have perfect record-keeping. Perhaps, if you can't prove 100% of your income and expenses (i.e. if you can't present an immaculately-balanced ledger — and who can?), you'll have your assets confiscated anyway. They can hold you as having violated the letter of the law, even if you kept to the spirit. One assumption further: the regime perhaps told the people it wanted to keep around, long in advance, to get (or fabricate) such a detailed personal accounting.
    - 5y ago

derefr 5y ago

You missed the key point: it’s lifetime-to-date net worth (heuristic: current bank account balances) vs. recent income. As in, if you make X per year; and you have >3X in savings from Y>3 years of spending (a lot) less than you make and stuffing the difference under a mattress, then all your savings in excess of 3X get confiscated. In other words, similar to people on welfare in America, public servants in Russia are now not allowed to retain assets in excess of a certain limit proportional to their income—even when that income all came directly from their (government) job. This is analogous to a progressive wealth tax, but not the same; as a wealth tax still allows disproportionate wealth growth for the highest-income earners; while the goal of this measure is to leave you with at most exactly three years of however-much you’re currently making, and nothing more, no matter what your assets looked like before that. The key “feature” to observe about this approach, IMHO, is that under this system people who are close to the savings cap already, are incentivized to spend every ruble they make, as any extra “left over” come audit time will be taken away. (It’s a bit like the game-theoretic consequences of yearly-limit insurance coverage, actually!)

cultofmetatron 5y ago
my first thought was "maybe they'll buy into gold or bitcoin" but then who's going to be accepting rubles for gold or bitcoin at this point. The Ruble is essentially worthless now.
Volundr 5y ago
> You missed the key point: it’s lifetime-to-date net worth (heuristic: current bank account balances) vs. recent income. I've now reread the original article several times, and I can't figure out where your getting that from. The phrasing used in the article is "If it turns out that the proceeds from them exceed the total income of the official and his relatives for three years by more than 10,000 rubles", which I can't parse into that and the source for the article appears to both be down and Russian, so I guess I'll take your word for it.
- db48x 5y ago
  “proceeds from them” = the amount in all of your accounts and the accounts of your relatives (no definition given here but presumably they mean your dependents). “total income … for three years” = you and your relatives/dependents income for the last three years. “X exceeds Y by more than ₽10,000” = X > Y + ₽10,000. Let’s make up some numbers and see where they lead. Suppose that you are a middle–aged civil servant and your salary has been ₽100,000 for the last three years. Y = ₽300,000, obviously. You’ve been saving for your whole life, so the sum total of all of your accounts, X, is ₽500,000. Most of that is in whatever the Russian equivalent of pensions or 401ks are, so they have been earning money for you. Either collecting interest, or by gaining value on the stock market or whatever. Let’s say that your average growth over the last 3 years was 5%. That means you earned ₽68,000 in interest over those three years. Assuming that this adds into Y, your total income, then Y is ₽368,000. Well, ₽500,000 is certainly larger than ₽378,000, so your name comes to the attention of the prosecutor. However, I disagree that this means that you automatically lose anything. The article says: “In order not to lose money, the official will have to prove the legality of their appearance on the account.” Presumably then you won’t lose anything if your records show that you obtained it all legally. On the one hand, you do want to catch corrupt officials who have been taking bribes or kickbacks. On the other hand, choosing this means to do it seems counter–productive, since you have to expect that everyone who is saving up for retirement in some way will qualify for investigation. Since the criteria for investigation are not correlated with the crime that they are trying to detect, they are going to have all the false positives.
  - derefr 5y ago
    > Presumably then you won’t lose anything if your records show that you obtained it all legally. That presumes you have perfect record-keeping. Perhaps, if you can't prove 100% of your income and expenses (i.e. if you can't present an immaculately-balanced ledger — and who can?), you'll have your assets confiscated anyway. They can hold you as having violated the letter of the law, even if you kept to the spirit. One assumption further: the regime perhaps told the people it wanted to keep around, long in advance, to get (or fabricate) such a detailed personal accounting.
  - 5y ago