> Over the last 20 years, Thiel has quietly turned his Roth IRA — a humdrum retirement vehicle intended to spur Americans to save for their golden years — into a gargantuan tax-exempt piggy bank, confidential Internal Revenue Service data shows. Using stock deals unavailable to most people, Thiel has taken a retirement account worth less than $2,000 in 1999 and spun it into a $5 billion windfall.
> On paper. As far as I know there are a myriad of ways to circumvent paying taxes.
Please let me know then! 37% top income tax bracket + 15.3% self employment social security and medicare is 52.3% right there! and we aren’t included state or local or other taxes and fees involved in running a business.
It seems people get confused about capital gains taxes vs income taxes. That $927/4220 is almost certainly capital gains taxes.
> It seems people get confused about capital gains taxes vs income taxes.
Among them, you! The people in this article aren’t buying them out of paychecks. Capital gains rates are their worst case scenario.
They’re paying next to nothing into Social Security (remember, only the first $160k income gets taxed there) and they aren’t paying into Medicare (Jobs’ famous $1 salary would result in about a penny).
> Among them, you! The people in this article aren’t buying them out of paychecks. Capital gains rates are their worst case scenario.
I know that however unless they are selling assets they will still need to pass through as income.
The idea that capital gains taxes are low is also insane. Those are assets that are being sold. Yes they may have started as worth zero when the company was formed but when they sell stock someone else now owns it. The fact we accept the government is entitled to 15% of that asset value increase is frankly insane.
I’d also like to mention that most people on paychecks are not aware of how much they are being taxed as they believe the absurd euphemistically named “employer” taxes aren’t a tax on them directly. Any tax the employer wouldn’t pay if they weren’t employed is a tax on them, regardless of how you name and collect it. Without payroll collection of taxes there is no way the government would politically get away with the extreme high tax rates on the general populations of western governments.
> The fact we accept the government is entitled to 15% of that asset value increase is frankly insane.
That capital gains rate - and again, that’s their worst-case scenario here; tricks like the Thiel Roth IRA article I linked elsewhere in this thread - pays for the education, healthcare, protection, etc. of their workforce.
How about we have employers pay all the money to employees directly, everything, no payroll taxes, no “employer” taxes, and then collect everything directly from the citizens. The current tax regime would result in a revolution in 1 year. Perhaps have them also pay for health insurance. Pay all that money directly to the payroll employees. Everyone would go ballistic if the numbers weren’t hidden from them and they weren’t tricked with the tax refund gimmick of giving people $5/100 they paid back.
As someone who pays for insurance directly (at $3k/month for a family), I'm all for making these costs more visible. A significant amount of the resistance to single-payer healthcare is people incorrectly thinking they pay $50/month for theirs because that's what their employer makes them chip in.
People making what they are told is $70K/year are actually paid significantly more than that and their overall actual tax rate, because employer tax doesn’t actually exist economically since any tax the employer pays due to hiring the employee is a direct tax on the employee period, the real tax rate for common people is already nearing 50%! If we add the medical side in, which I agree is connected when comparing to other healthcare systems, which I do NOT agree are better, but still adding those in and a typical upper middle class suburban household is taking home a shockingly small chunk of their total economic compensation the employer is paying them. That healthcare costs are compensation, period, benefits is another euphemism ingrained in all of us, being used to hide the ugly truths from the general population.
Why sell assets when you can get a loan against them and the appreciation covers the interest cost? Then you have no taxes to pay and plenty of money to spend.
I don’t get it, eventually you have to pay back the loan and pay the capital gains tax, so what? People do what you suggest and there isn’t anything wrong with it, they still pay same taxes eventually.
If you have $10 billion in shares, you take out a billion in a loan with the shares as collateral. You repay it out of that billion, at low interest. Start running low? Take another loan. The shares are worth $20B now anyways!
I don’t see there being any issue. Eventually the final loan will be repaid with income. Like most of these types of articles they are just Envy clickbait nonsense.
> Eventually the final loan will be repaid with income.
Scroll down to #2. Thiel, for example, managed to get $5B into a Roth IRA.
> What’s more, as long as Thiel waits to withdraw his money until April 2027, when he is six months shy of his 60th birthday, he will never have to pay a penny of tax on those billions.
There are too many tricks available for them to wind up paying a fair share of taxes.
Isn’t Roth IRA available to anyone? It seems like the complaint is that somehow since he is so successful it isn’t fair he uses the same system regular people do also? Because he has billions he should be extra taxed. It’s also not fair hollywood stars are so much more attractive than most of us, let’s kick their faces in to even it out?
The reality is taxes on everyone are actually crazy high, but hidden from everyone, via “employer” labeling and inflation. One latest euphemistic collectivist scheme is “corporate” taxes, total joke,
corporations are investors and employees, every tax is either an investor tax or employee tax, taxing an abstract organizational concept is nonsensical.
Envy is one of the most dangerous human emotions, helping destroy numerous productive societies with collectivist ideas, your war on billionaires is nothing but another envy driven scheme to help collectivists continue to rob the productive members of society.
You die and then you don't have to pay back the loan and any capital gains taxes. The assets are marked to market for tax purposes, then the estate can liquidate them to satisfy the debt and the heirs get the remaining assets and can sell with no tax due.
SS and Medicare are largely capped at around $150k, and the 37% tax bracket doesn't kick in until an income well above $500k. Using those figures and claiming it means that your "tax rate is 50% right there" is extremely disingenuous, bordering on outright lying.
A realistic expectation of most small entrepreneurs is to generate something around $1M/year and the overall tax rate for them will be around 50% or more.
I believe a civil war might be a real risk. Or big recession, both which might lead to unrest.. Never know what is the next political system when people are actually starving.
More like for their bodyguards. Because why a bodyguard needs a billionaire, who suddenly has no money and thus no status in this new apocalyptic world?
Is anyone building a directory of these bunkers? That list would be worth quite a few boxes of ammunition if the apocalypse ever comes our way.
Someone needs to turn that into a TV show about a apocalypto-Robin Hood gang going from bunker to bunker, liberating supplies for the desperate survivors using any means necessary.
Fallout was supposed to be satire. In general, be suspicious of somebody selling you insurance against the apocalypse. The very transaction implies they aren't as concerned as you.
It also speaks about the disconnect the future vault-dwellers feel about the world, as if they expect their place in the world will remain static. Looking at the Roman empire's fall, it was less cataclysmic than an orderly retreat by the Core from the Periphery [0], leaving local elites in charge of protection and development when the legions left. This means a current slice of high-elite is leaving physically and economically critical infrastructure abandoned to another elite to take up. A smarter elite would be building redoubts along these strategic lines rather than disconnecting entirely.
Or. This is just one of the things ultra rich to do pass time.
I am not ultra rich, but I do day dream. And if I was ultra rich I would be building one too. Not because I thought I would ever use it. But because it would just be fun.
It’s kind of like playing a video game you mastered. You might go build or do things that simply are for the joy of doing it.
The ultra rich are quick to tell us that they are so busy running their businesses. Either they are doing a lot less than they say or actually don’t have time to play in their bunkers…
If you're ultra-wealthy and want to survive the apocalypse while keeping your status, it's probably better to stockpile loyalty rather than gas-guzzling SUVs in a world where the oil refineries are blown up.
I wonder if the ideal compound would be one that can shelter thousands of people and a massive soup kitchen. When the bombs drop, you're the only person bothering to help others and so you amass followers that you can now use to raid other billionaires that instead spent their money on pools or saunas.
Every litre of water you put into a pool is a litre of water you could be using to supply a soldier to steal some other guy's pool to hydrate more soldiers within a drought-stricken wasteland. Every 500k you spent on a luxury bulletproof SUV is enough to buy 10x the Toyota Hiluxes that can outflank the SUV and pin it in. And the 6x6 luxury SUV is a prime target since anyone riding in one of those has a lot of stuff to steal.
If the rule of law disappears and society collapses, I doubt anybody is going to maintain a pre-war standard of living because the competitive pressures are going to push people to spend a lot more on weapons/violence. The best you can hope for is to become a charismatic warlord, but now you personally have to spend your wealth on providing protection and welfare for the people, plus you have to win against every other person with the same idea.
It'd be cheaper to just pool your wealth together with everyone else in a given area to create a government that enforces certain basic rules, provides for certain basic needs, and allows everyone to stop worrying about killing each other.
Yeah. Anyone building a bunker just for themselves and a few other people is planning for a very boring and lonely future that will exist only so long as they can access/produce sufficient food and water. It should basically go without saying that a "real" plan is for provisioning an army.
Well what'll end up happening is you will use the army to control territory and extort regular tribute from farmers in exchange for you protecting them from other raiders + you not taking their stuff. You can also provide your army with stolen farms, and call them up to service when needed. Congrats, you are now a feudal lord.
This is what the current government does but in the post-apocalyptic world it'll be less fair and more expensive.
The reason why government exists is because it solves very real problems. If there is state failure, we're not going to devolve into a libertarian utopia. What is more likely to happen is what has already happened in countries such as Somalia or the Democratic Republic of the Congo or Western Europe after the fall of the Roman Empire.
42 comments
[ 2.5 ms ] story [ 129 ms ] threadhttps://www.propublica.org/article/lord-of-the-roths-how-tec...
> Over the last 20 years, Thiel has quietly turned his Roth IRA — a humdrum retirement vehicle intended to spur Americans to save for their golden years — into a gargantuan tax-exempt piggy bank, confidential Internal Revenue Service data shows. Using stock deals unavailable to most people, Thiel has taken a retirement account worth less than $2,000 in 1999 and spun it into a $5 billion windfall.
"In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes."
between 2014 and 2018, Bezos paid $972 million in total taxes on $4.22 billion of income.
https://www.propublica.org/article/the-secret-irs-files-trov...
Please let me know then! 37% top income tax bracket + 15.3% self employment social security and medicare is 52.3% right there! and we aren’t included state or local or other taxes and fees involved in running a business.
It seems people get confused about capital gains taxes vs income taxes. That $927/4220 is almost certainly capital gains taxes.
Among them, you! The people in this article aren’t buying them out of paychecks. Capital gains rates are their worst case scenario.
They’re paying next to nothing into Social Security (remember, only the first $160k income gets taxed there) and they aren’t paying into Medicare (Jobs’ famous $1 salary would result in about a penny).
I know that however unless they are selling assets they will still need to pass through as income.
The idea that capital gains taxes are low is also insane. Those are assets that are being sold. Yes they may have started as worth zero when the company was formed but when they sell stock someone else now owns it. The fact we accept the government is entitled to 15% of that asset value increase is frankly insane.
I’d also like to mention that most people on paychecks are not aware of how much they are being taxed as they believe the absurd euphemistically named “employer” taxes aren’t a tax on them directly. Any tax the employer wouldn’t pay if they weren’t employed is a tax on them, regardless of how you name and collect it. Without payroll collection of taxes there is no way the government would politically get away with the extreme high tax rates on the general populations of western governments.
That capital gains rate - and again, that’s their worst-case scenario here; tricks like the Thiel Roth IRA article I linked elsewhere in this thread - pays for the education, healthcare, protection, etc. of their workforce.
Never actually having to sell shares means no taxes, plenty of operating funds. Quite common. https://www.propublica.org/article/billionaires-tax-avoidanc...
Scroll down to #2. Thiel, for example, managed to get $5B into a Roth IRA.
> What’s more, as long as Thiel waits to withdraw his money until April 2027, when he is six months shy of his 60th birthday, he will never have to pay a penny of tax on those billions.
There are too many tricks available for them to wind up paying a fair share of taxes.
The reality is taxes on everyone are actually crazy high, but hidden from everyone, via “employer” labeling and inflation. One latest euphemistic collectivist scheme is “corporate” taxes, total joke, corporations are investors and employees, every tax is either an investor tax or employee tax, taxing an abstract organizational concept is nonsensical.
Envy is one of the most dangerous human emotions, helping destroy numerous productive societies with collectivist ideas, your war on billionaires is nothing but another envy driven scheme to help collectivists continue to rob the productive members of society.
Someone needs to turn that into a TV show about a apocalypto-Robin Hood gang going from bunker to bunker, liberating supplies for the desperate survivors using any means necessary.
It also speaks about the disconnect the future vault-dwellers feel about the world, as if they expect their place in the world will remain static. Looking at the Roman empire's fall, it was less cataclysmic than an orderly retreat by the Core from the Periphery [0], leaving local elites in charge of protection and development when the legions left. This means a current slice of high-elite is leaving physically and economically critical infrastructure abandoned to another elite to take up. A smarter elite would be building redoubts along these strategic lines rather than disconnecting entirely.
[0]: https://www.researchgate.net/publication/23756480_Cyclical_D...
I am not ultra rich, but I do day dream. And if I was ultra rich I would be building one too. Not because I thought I would ever use it. But because it would just be fun.
It’s kind of like playing a video game you mastered. You might go build or do things that simply are for the joy of doing it.
I wonder if the ideal compound would be one that can shelter thousands of people and a massive soup kitchen. When the bombs drop, you're the only person bothering to help others and so you amass followers that you can now use to raid other billionaires that instead spent their money on pools or saunas.
Every litre of water you put into a pool is a litre of water you could be using to supply a soldier to steal some other guy's pool to hydrate more soldiers within a drought-stricken wasteland. Every 500k you spent on a luxury bulletproof SUV is enough to buy 10x the Toyota Hiluxes that can outflank the SUV and pin it in. And the 6x6 luxury SUV is a prime target since anyone riding in one of those has a lot of stuff to steal.
If the rule of law disappears and society collapses, I doubt anybody is going to maintain a pre-war standard of living because the competitive pressures are going to push people to spend a lot more on weapons/violence. The best you can hope for is to become a charismatic warlord, but now you personally have to spend your wealth on providing protection and welfare for the people, plus you have to win against every other person with the same idea.
It'd be cheaper to just pool your wealth together with everyone else in a given area to create a government that enforces certain basic rules, provides for certain basic needs, and allows everyone to stop worrying about killing each other.
it doesn't matter if you have a 1000 guns and plan on stealing what you need -- if no one can farm you're not going to last.
This is what the current government does but in the post-apocalyptic world it'll be less fair and more expensive.
The reason why government exists is because it solves very real problems. If there is state failure, we're not going to devolve into a libertarian utopia. What is more likely to happen is what has already happened in countries such as Somalia or the Democratic Republic of the Congo or Western Europe after the fall of the Roman Empire.
Hell, Larry Ellison owns most of Lanai.