Live data from Hacker News

How to have a billion dollar exit with zero capital gains tax

axiomalpha.com

161–170 of 305 posts

Re: How to have a billion dollar exit with zero capital gains tax

#161
post #68

Unfashionable thought: pay your damn taxes. Loopholes are one thing and IMO should be closed but morality is another. The whole idea that you can make a billion dollar business without being hugely dependent on the infrastructure, education, history, societal background etc that has largely been paid for by...taxes...is utter fallacy. Maybe if massively profitable businesses spent a bit more time doing the right thin…

I live in a former socialist country, and I hate the "we will tax the rich" (as in higher tax percentages) paroles I hear from our current left-leaning (even communist) parties here.

Why? (and I have mentioned this before, many times, even here)

Poor people already pay almost zero taxes.

Rich people avoid paying taxes at all.

And me, someone with an above average but below "rich" (engineers) paycheck get fucked by the taxes.

I don't want higher taxes for the rich, I just want the rich to pay the same tax rate as I do in the first place.

Re: How to have a billion dollar exit with zero capital gains tax

#162
post #125
post #57

Earlier quoted context omitted.

There are two groups slicing the worker's cheese. One is the state, they claim tax. The other is the investors, they claim profit. Calling out other parasites, don't forget you also are one.

This can only be true if you hold humans in such low regard that you think they cannot make an informed choice about where to work and under which conditions. Any example of a cooperative usually descends into chaos, an example being worker's unions which descend into criminality, corruption and pure evil (teacher's unions regularly defend sexual predator teachers, for example) more often than not. It's also a pure f…

> sexual predator teachers

You need to chill, dude. I am not defending child molesters. I am not even claiming that capital investment is evil. I am simply pointing out the fact that the relation is parasitic.

> As an investor, I don't see a single cent of profit in this case.

Then you aren't paying capital gains tax either, so I don't see the problem.

I'm curious though, do you also not expect to get any profit for this particular investment in the future? When you have got back your inflation adjusted initial capital + a modest interest + a reward for the risk, do you mail your share certificates back to Cloudflare with a note, thank you, good doing business with you?

Re: How to have a billion dollar exit with zero capital gains tax

#165
post #68

Unfashionable thought: pay your damn taxes. Loopholes are one thing and IMO should be closed but morality is another. The whole idea that you can make a billion dollar business without being hugely dependent on the infrastructure, education, history, societal background etc that has largely been paid for by...taxes...is utter fallacy. Maybe if massively profitable businesses spent a bit more time doing the right thin…

I live in a former socialist country, and I hate the "we will tax the rich" (as in higher tax percentages) paroles I hear from our current left-leaning (even communist) parties here. Why? (and I have mentioned this before, many times, even here) Poor people already pay almost zero taxes. Rich people avoid paying taxes at all. And me, someone with an above average but below "rich" (engineers) paycheck get fucked by th…

given that they often precisely pay less taxes than you, you can't really avoid wanting them to pay "higher" taxes - higher than the ridiculously low numbers they pay, given their army of lawyers, accountants and loopholes. So, wanting them to pay a similar percentage to you, DOES amount to them paying "higher" taxes.

  In my country, foreign (or rather, multinational) corporations  that invariably make huge profits, pay zero taxes, by doing the following:
  - they transfer 'ownership' of critical company resources,
e.g. the software WE develop, to a remote entity that is also them, typically on e.g. cayman islands. Then our local subsidiaries rent/lease OUR OWN SOFTWARE back from the cayman part, in order to serve it to our clients. Our local subsidiaries pay a silly huge leasing fee for using "its own software" - as much or more than what our clients pay for using the software services. The net result is, that our local subsidiaries always operate with a loss, no profits, which both results in no taxes having to be paid, and the "losses" being tax deductible (depending on details, both can be useful). The real net result is, that a huge profit is funnelled out of our countries, with no taxes paid for local services, wear and tear.

When your size allows you to hold the pen when writing the tax laws, tax does not apply to you.

Tax is something the wealthy and society extracts from the taxable classes. They don't extract it from the rich, it is in direct opposition to the nature of being rich - rich is something you become, by being exempt from the rules that apply to 'lesser' creatures.

And if the low-income classes do not provide taxable income, I wonder why the republicans are so hellbent from prohibiting poor people from getting abortions. It suggests to me, they DO believe poor people serve some purpose, given that they insist on creation of new poor people.

Re: How to have a billion dollar exit with zero capital gains tax

#166
post #68

Unfashionable thought: pay your damn taxes. Loopholes are one thing and IMO should be closed but morality is another. The whole idea that you can make a billion dollar business without being hugely dependent on the infrastructure, education, history, societal background etc that has largely been paid for by...taxes...is utter fallacy. Maybe if massively profitable businesses spent a bit more time doing the right thin…

My brother's life was paid for by taxes. Went to the ER with a headache, turned out to be a brain annurism leading to 2 8rh plus surgeries and a month in the hospital. Bill was paid out of Minnesota state taxpayers fund. Otherwise he would have been bankrupt for life -- and without the surgery that life would not have been long. My wife's life was saved twice by tax-funded health care. Won't share details here. I hap…

It makes sense that people who benefit disproportionately from social spending would be pro-social spending, and vice versa for people who pay disproportionately more into the system. It troubles me to see comments here acting like the rich are all sociopaths, when really, everybody rich and poor is generally going to favor what is in their own best interests.

Re: How to have a billion dollar exit with zero capital gains tax

#167

Earlier quoted context omitted.

I live in a former socialist country, and I hate the "we will tax the rich" (as in higher tax percentages) paroles I hear from our current left-leaning (even communist) parties here. Why? (and I have mentioned this before, many times, even here) Poor people already pay almost zero taxes. Rich people avoid paying taxes at all. And me, someone with an above average but below "rich" (engineers) paycheck get fucked by th…

given that they often precisely pay less taxes than you, you can't really avoid wanting them to pay "higher" taxes - higher than the ridiculously low numbers they pay, given their army of lawyers, accountants and loopholes. So, wanting them to pay a similar percentage to you, DOES amount to them paying "higher" taxes. In my country, foreign (or rather, multinational) corporations that invariably make huge profits, pa…

I edited my post and added the "(as in higher tax percentages)", because this is the main thing that our left-leaning parties do.

We had a really shitty government for two years now, who did only one good thing, and that was to raise the general tax deduction, making our workers get a bit more net out of their gross income, and even the unions protested, because they "cared" about te governments budgets.

Now with the government change, we expect them to scrape that (because that would mean more money for the government, and the poor (their voters) would be least affected), and the paroles they'll use go along "taxing the rich". On the other hand, as you said, if you're rich, the "progressive" tax rates make it worth it to avoid taxes by funneling money around, and we (engineers, developers, etc.) get fucked, because we earn above average (and get hit with taxes hard), but still not enough to make it worthwile to do the whole tax-avoidance (legal) thing.

Re: How to have a billion dollar exit with zero capital gains tax

#168
post #138

Earlier quoted context omitted.

But if the rules don't enforce that, and allow far-away rich arseholes to use these zones to cheat money out of the taxman, then that's sloppy legislating. The loopholes need to be closed. Relying on the goodwill of people whose primary unifying characteristic is the hoarding of extreme amounts of money is a bad idea.

The problem is a fundamental disadvantage in available manpower. Billionaires employ literal armies worth of extremely well paid lawyers, accountants and other professionals continuously working on finding and exploiting loopholes involving multiple jurisdictions, whereas most of the public services sector is barely keeping up. (Yes I'm aware that especially at the federal scale, the ultra rich sometimes outright buy…

The solution is tax reform. Make taxes and social programs broad and simple.

Re: How to have a billion dollar exit with zero capital gains tax

#169
post #68

Unfashionable thought: pay your damn taxes. Loopholes are one thing and IMO should be closed but morality is another. The whole idea that you can make a billion dollar business without being hugely dependent on the infrastructure, education, history, societal background etc that has largely been paid for by...taxes...is utter fallacy. Maybe if massively profitable businesses spent a bit more time doing the right thin…

I live in a former socialist country, and I hate the "we will tax the rich" (as in higher tax percentages) paroles I hear from our current left-leaning (even communist) parties here. Why? (and I have mentioned this before, many times, even here) Poor people already pay almost zero taxes. Rich people avoid paying taxes at all. And me, someone with an above average but below "rich" (engineers) paycheck get fucked by th…

Let's look at it this this way - say you live in Texas and make $7.25 / hr. That's $7.25 * 8 hours * 260 days = $15080 / year. According to this tax calc (https://smartasset.com/taxes/income-taxes), you still have to pay $1407 in total federal income taxes, or 9.33%.

It may not sound a lot, but remember - when you're making that little money, every dollar counts. You could be living on the edge of poverty, where you just make enough money to cover your basic needs, but never make enough to save up anything.

Compare that to someone making, let's say $60k in Texas. You're not anywhere near a six-figure salary, but you'd still make 4 times more than minimum wage.

Same calculator shows that at $60k in Texas, you'll have to pay $10778 in taxes, or %17.96. Higher percentage, but you'll probably have a lot more to save than the minimum wage person in the previous example.

The "rich" engineers making $250k will have to pay 28.23% in taxes, even more than you.

Now the wealthy, they will probably never pay more than capital gains taxes at most - which is a capped figure, most places. And as others have mentioned, there's a whole industry dedicated to bringing down the taxes for wealthy people.

So while the middle and upper-middle class is bankrolling the nation in terms of tax %, I think it's important to remember that these things have to be seen in context. I have a 3-4 times higher tax rate than "poor people", but I make more than enough money to everything I need, post-taxes.

Re: How to have a billion dollar exit with zero capital gains tax

#170
post #133
post #68

Unfashionable thought: pay your damn taxes. Loopholes are one thing and IMO should be closed but morality is another. The whole idea that you can make a billion dollar business without being hugely dependent on the infrastructure, education, history, societal background etc that has largely been paid for by...taxes...is utter fallacy. Maybe if massively profitable businesses spent a bit more time doing the right thin…

Still, if the tax loophole exists, it's hardly surprising that people use it. People should pay their taxes, but the government should also close these tax loopholes, or at least be a lot more strict about how they're used; I can imagine these opportunity zones exist to make it more attractive to set up shops and small businesses here in order to develop the area. It's not meant for app startups with billion dollar e…

> It's not meant for app startups with billion dollar exits, so the rules should exclude those.

Adding more rules is generally favorable to the rich. The real solution is removing special-interest tax benefits like this in the first place.

Post reply on HN