4 ms·

It's one thing to say "a potential loophole exists" to "someone has successfully exploited the loophole on a massive scale already".

• lotsofpulp 4y ago
  And it is yet another thing to say “in 1999, someone gambled $2k worth of equity and got lucky it grew to be worth a few billion 22 years in the future.”
  • tootie 4y ago
    It's another thing to say this was a program designed to help working people retire more comfortably and not as a tax shelter for risky investments. I know Thiel didn't do anything explicitly illegal so there's no recourse to recoup the taxes, but it's obviously skirting the spirit of the law. And a pretty easy regulatory update to cap the value of Roth withdrawals. No tax on gains up to $10M or something would protect 99.9% of savers and prevent this tactic from being weaponized.
    • lotsofpulp 4y ago
      >but it's obviously skirting the spirit of the law. This is not obvious to me, as it would have been trivial for legislators to specify a CPI adjusted maximum for the tax advantaged gains. >And a pretty easy regulatory update to cap the value of Roth withdrawals. Yes, and I encourage Congress to do that. That has always been one of the risks with opting for Roth.
  • tootie 4y ago
    That's not really what happened if you read the article. The Bush admin created a deliberate hole in the program to allow investors to convert holding to Roths. It's a weaponized tax shelter program. And it's one that can be exploited over and over. This is less a story that Thiel broke the rules and more that Republican policy used a clever trick to allow this to happen. You can still blame this on Thiel in a roundabout way since he is such a heavy Republican donor, this seems like a pretty straightforward case of regulatory capture.