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How One of the Richest Men Is Avoiding $8B in Taxes
- indigodaddy 2y agohttps://archive.ph/mcZ2p https://archive.ph/mcZ2p
- shkkmo 2y agoWe should either close the loopholes or eliminate the tax.
- amelius 2y agoClosing the loopholes is like writing a bug-free program. I.e. practically impossible. You can criminalize any exploits though (just like with software and security exploits).
- Loughla 2y agoIsn't criminalizing the exploits in a law just closing the loopholes in the law? I don't think I'm smart enough to understand the difference.
- gruez 2y ago>You can criminalize any exploits though. From the article: >The Huangs were taking advantage of a precedent set nearly two decades earlier, in 1995, when the I.R.S. blessed a transaction [...] Regardless of your position on the current tax code, I think most would agree it's a dick move for the government to prosecute someone for something that they previously said was legal.
- Epa095 2y agoMaybe, but the American tax system seems unreasonable complicated and trickable with its 'charitable foundations' and 'Donor-advised funds'. I think it's rather defeatist to think it's impossible to make a better and less exploitable system. Of course, we are now entering the time of open oligarchy, so it probably won't happen soon.
- creer 2y agoI suspect the US tax system has far more smart people working on generally finding and exploiting its features and other holes and optimizations than your favorite OS or bloated web browser.
- hackeraccount 2y agoIt's like writing a bug-free program when some of the customers (and so some of the programmers) actually want the bugs in there. In any case most (all?) loopholes are well intended ideas that weren't fully thought out. Plus then more deductions you have the higher you can have nominal rates.
- OutOfHere 2y agoHow about we eliminate billionaires while we're at it? To auto-adjust this for inflation, it can be defined as the current cost of 10,000 kg of gold. That's 10 metric tons which is a very generous amount for any individual.
- readthenotes1 2y agoJust wait until it's your money we're going after. From where I sit, having more than the equivalent to a few grams of gold in personal property is very generous.
- OutOfHere 2y agoBillionaires exist only because of exploitation of the environment and of other people. I would never be in that position because I would never be exploitative.
- M95D 2y agoIf you invest money in other people's labor expecting a return (stock market, pension, but not crypto or a house), then you are exploitative. You just don't do it yourself, you delegated it.
- OutOfHere 2y agoYou're trying to equate capitalism with exploitation, but they're not the same. There is such a thing as fair market compensation. Exploitation exists when people are made to work over 40 hours a week, or they get stifled with bad health insurance, or lack a safe work environment, or otherwise taken advantage of such as with a visa issue. Not every stock investment is exploitative.
- inemesitaffia 2y agoMade? You think they work overtime without compensation?
- teamspirit 2y agoFirst line of the article: > Jensen Huang, the chief executive of Nvidia, is the 10th-richest person in the United States, worth $127 billion I haven't been paying attention to the bullshit that is nth-richest person but how the fuck is someone worth that much and is only in 10th place? Wasn't it not too long ago that $127B would have been 1st?
- amelius 2y agoThe wealth gap is widening.
- davisr 2y agohttps://www.visualcapitalist.com/wealth-distribution-in-america/ https://www.visualcapitalist.com/wealth-distribution-in-amer...
- Loughla 2y agoRich get richer, poor get poorer. Something like that. But mostly, because technology has ASTOUNDING margins and markets that are, essentially, winner takes all, the richest people are now tech instead of oil or resources like they used to be. We will see the world's first trillionaire. It will happen in our lifetime. Unless the trend of murdering the ultra wealthy actually kicks off. Then maybe not.
- IG_Semmelweiss 2y agoIt thought the CEO of a company is not ultra wealthy by a longshot. He's just an employee, well connected, ex-banker or ex-consulting who happens to be a multi-millionaire. Great gig if you can get it, especially if you avoid divorce -or death from stress.. or murder. The founder of a company -who may or may not be be CEO- is where the the money is at. That's where the value-creation is, and where the ultra wealthy reside. They also usually have somewhat functional families. But I wanted to answer this question objectively, so here's what I did: I suppose you can start with a definition of ultrawealthy[1] which is $30m assets minus primary residence. That seemed low to me, but its on wiki, so OK. Median CEO pay for publicly listed companies was 16.3M, gross. [2] . Take 50% off the top for taxes (US-avg so aggressive), then you are around ~$8M , before expenses. Factor expenses of $1M (probably low, considering consumption goes up relative to income), that means $7M for assets, meaning the avg CEO is working about 5 years to become hit ultra wealth. However, the average tenure for a CEO is 4.8 years [3] So i suppose a few of the CEOs are eventually making it into the ultra rich, if they can outlast the average tenure on the job. I stand corrected. [1] [1] https://en.wikipedia.org/wiki/High-net-worth_individual https://en.wikipedia.org/wiki/High-net-worth_individual [2] https://www.resourcefulfinancepro.com/wp-content/uploads/2023/11/45455-GBS-2023-Exec-Comp_RPT-FINAL-2.pdf https://www.resourcefulfinancepro.com/wp-content/uploads/202... [3] https://corpgov.law.harvard.edu/2023/08/04/ceo-tenure-rates-2 https://corpgov.law.harvard.edu/2023/08/04/ceo-tenure-rates-...
- whalesalad 2y agoDon't hate the player, hate the game. Can't blame someone for trying to protect their wealth. A loophole is... a loophole. Close them, redesign the tax code. Lame to single out individuals in posts like this as though they are doing anything wrong.
- awfulneutral 2y agoThe law does not define what is ethical. Of course you can blame somebody for trying to hoard an unreasonable amount of wealth. As George said, we live in a society.
- whalesalad 2y agoThis nation was literally founded on a desire to give the middle finger to the tax man. Ethics is a very subjective thing. I disagree with your take.
- awfulneutral 2y agoIf you're referring to the desire to avoid unreasonable taxation without representation, it does not seem like the same thing to me. I don't know - maybe he is avoiding taxes so he can give it all to charity. But greed seems pretty commonly accepted to be unethical.
- whalesalad 2y agoLEGALLY protecting something that is your own, I don’t know how you see that as unethical. Take this up with the IRS if you disagree with it. Don’t blame the individual for following the law.
- awfulneutral 2y agoIt sounds like you do think the law defines what is ethical then. I disagree with that take.
- SoftTalker 2y agoSo according to the NYT, legally avoiding a tax is a "dodge." I'm glad they don't run the IRS.
- yieldcrv 2y agosummary: this is an article about: “I Dig It” trusts GRATs Private Foundations in combination with Donor Advised Funds interestingly this article has no evidence of an “I Dig It” being used by Huang, which is an overly complex and unnecessary strategy to limit taxes, when it does have evidence of the Private Foundations and Donor Advised Fund being used, at far greater values and is a far simpler way of having tax exempted gains and tax deductions. There is also a GRAT being used, which is also more complex than necessary. PF + DAF is all you need It would have been interesting to see a very aggressive use of QSBS in action, as this would be even more tax free instead of tax exempt, but seems like a missed opportunity
- indigodaddy 2y agoWhy flagged I wonder?
- indigodaddy 2y agoI am actually asking without sarcasm, if anyone can answer.. why the quick trigger on downvoting as well?
- ThrowawayR2 2y agoThe downvotes are probably because of the "Please don't comment about the voting on comments. It never does any good, and it makes boring reading." guideline in the HN guidelines linked at the bottom of the page, which HN readers seem to interpret as including comments discussing flagging on submissions as well. Nobody seems to be permitted to explain the flagging either because of the "Please don't complain that a submission is inappropriate. If a story is spam or off-topic, flag it. Don't feed egregious comments by replying; flag them instead. If you flag, please don't also comment that you did." guideline. Anybody who does post to explain their reasons for flagging seems to often have their comment downvoted and flagged. I'm not arguing for or against the guidelines, just pointing them out.
- moogly 2y agoCan't be raising fuss over the new royalty, y'know.
- keernan 2y agoAnyone with a billion dollars only owes taxes as a result of changing how an asset is invested... which only happens because the new investment will generate more wealth after taxes than before.
- belter 2y agoAll the temporarily embarrassed billionaires in HN flagged this article :-)