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Who died and left the US $7B?

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Re: Who died and left the US $7B?

#191

Post by opo »

_bin_ wrote: post #162
Jedd wrote: post #94

A fascinating reddit post was mentioned here about a month ago - about the mildly famous (if a little macabre) 'Buy, Borrow, Die' cycle used by the obscenely-wealthy to - multi-generationally - avoid tax obligations. https://old.reddit.com/r/BuyBorrowDieExplained/comments/1f26... HN comments: https://news.ycombinator.com/item?id=41408772

This is something people love to rage about, yet it's not one with an obvious fix. The counterpoint is that this leaves money invested, which means others invest in other things, and still entails interest payments. It exists in part because you don't want someone who inherited his parents' house and wants to move in to go broke trying to pay taxes, or have to re-mortgage it, with an even stronger case with family fa…

>This is something people love to rage about ...

Yes, people get angry about this, but no one has provided any statistics showing this is actually a common loophole.

The basic idea in the reddit post is that there were lenders giving multi-decade loans at a tiny interest rate (only payable upon death with also sharing a % share of the gains).

Maybe there are lenders who have lots of capital and also don't understand the time value of money, but no one has actually provided the names of these lenders, etc.

According to this: https://finance.yahoo.com/news/jeff-bezos-sell-5-billion-185.... Bezos has sold around $13.4 billion in stock in 2024. If he could easily avoid millions (maybe billions) of dollars of capital gains tax by this one simple trick, why didn't he?

Re: Who died and left the US $7B?

#192

Post by [deleted] »

fallingknife wrote: post #190
arcticbull wrote: post #169

Earlier quoted context omitted.

Are you familiar with the concept of noblesse oblige? Further does this include all taxes or just income taxes which are only a portion of revenues used to make less well off people look like moochers. For instance, in the US, there’s social security and Medicare taxes -- and payroll tax, the social security and Medicare tax contributed on behalf of employees by employers. Renters also pay their landlords property ta…

Renters do not pay property tax in the US. That liability is entirely on the owner.

[deleted]

Re: Who died and left the US $7B?

#193

Post by rahimnathwani »

fallingknife wrote: post #190
arcticbull wrote: post #169

Earlier quoted context omitted.

Are you familiar with the concept of noblesse oblige? Further does this include all taxes or just income taxes which are only a portion of revenues used to make less well off people look like moochers. For instance, in the US, there’s social security and Medicare taxes -- and payroll tax, the social security and Medicare tax contributed on behalf of employees by employers. Renters also pay their landlords property ta…

Renters do not pay property tax in the US. That liability is entirely on the owner.

Your statement is technically correct. It's also technically correct to say that diners, not restaurant owners, pay sales taxes.

The reality is more nuanced. Introducing a sales tax on restaurant meals affects both diners and restaurant owners: restaurant owners can't pass on the whole increase to diners, and diners cannot afford to go out as much.

Similarly, property tax levels influence landlords' decisions to enter or exit the rental market, impacting housing supply and, consequently, tenant rents. 'Paying' a tax has two distinct meanings:

- Who bears the economic burden after the tax is introduced

- Who is legally responsible for paying the tax

These two concepts are not always aligned.

Re: Who died and left the US $7B?

#194

Post by intended »

bko wrote: post #79
Kapura wrote: post #10

Pretty obscene that somebody could have so much wealth that $7,000,000,000 is just the tax bill. Also weird that it's framed as a "gift."

Why is that obscene? Presumably the person created something very valuable to the world. Sure there are zero-sum ways to generate wealth (e.g. suing people, theft, front running trades) but generally that kind of wealth comes from actually generating something that people value.

Hasn’t it largely been finance and inheritance related, until very recently when tech joined the scene ?

Given the way everything is being made into its crappier form, it’s arguable that even tech isn’t “adding value” anymore.

Re: Who died and left the US $7B?

#195

Post by fallingknife »

ksec wrote: post #98

This may be off-topic. >Billionaires are like black holes. We deduce their existence from the fundamental laws of capitalism, see their gravity pull politics into their orbit, even detect signals of their existence in the public markets. I dont know about others. This is very beautifully put. But I am wondering if anyone has an counter argument. Because this basically means money > power; > "As gravity pulls politics…

There is no counter argument because you haven't even made an argument to counter. It's just the same tired old "government is in the pocket of billionaires" canard that people who don't know how anything actually works throw out without ever actually providing any evidence of it.

Re: Who died and left the US $7B?

#196

Post by fallingknife »

rahimnathwani wrote: post #193
fallingknife wrote: post #190

Earlier quoted context omitted.

Renters do not pay property tax in the US. That liability is entirely on the owner.

Your statement is technically correct. It's also technically correct to say that diners, not restaurant owners, pay sales taxes. The reality is more nuanced. Introducing a sales tax on restaurant meals affects both diners and restaurant owners: restaurant owners can't pass on the whole increase to diners, and diners cannot afford to go out as much. Similarly, property tax levels influence landlords' decisions to ente…

This is a silly distinction because by that standard you could equally say that my employer pays my rent because they are the source of income which I use to pay it.

Property tax in the US is a liability of the owner. This is in contrast to other systems like the UK where it is a liability of the occupant.

Re: Who died and left the US $7B?

#197

Post by jandrewrogers »

Jedd wrote: post #94

A fascinating reddit post was mentioned here about a month ago - about the mildly famous (if a little macabre) 'Buy, Borrow, Die' cycle used by the obscenely-wealthy to - multi-generationally - avoid tax obligations. https://old.reddit.com/r/BuyBorrowDieExplained/comments/1f26... HN comments: https://news.ycombinator.com/item?id=41408772

A caveat is that this strategy requires owning assets with a lot of liquidity. One of the points raised during the whole “taxing unrealized gains” episode is that the vast majority of assets (~70%) held by the ultra-wealthy effectively have very little liquidity. As a consequence, they can’t really be used as cheap collateral for secured debt.

Re: Who died and left the US $7B?

#198

Post by whatshisface »

dclowd9901 wrote: post #184
whatshisface wrote: post #105

Earlier quoted context omitted.

Taking money away from mismanaged companies, and giving it to well-managed ones, is a net positive of stock trading. Another net positive of stock trading is making buyers and sellers available all day, for anything on the market. Yet another benefit of stock trading is to make it more difficult to manipulate the market - there's a reason why pump and dump scams only occur with assets that see very little attention (…

Does the quality of management of a company actually dictate its positivity to the world at large? Seems like a quite unrelated signal.

The world's not all tobacco advertising and chemical spill coverups, there are also dishonest mechanics and dirty restaurant kitchens.

Re: Who died and left the US $7B?

#199

Post by rahimnathwani »

fallingknife wrote: post #196
rahimnathwani wrote: post #193

Earlier quoted context omitted.

Your statement is technically correct. It's also technically correct to say that diners, not restaurant owners, pay sales taxes. The reality is more nuanced. Introducing a sales tax on restaurant meals affects both diners and restaurant owners: restaurant owners can't pass on the whole increase to diners, and diners cannot afford to go out as much. Similarly, property tax levels influence landlords' decisions to ente…

This is a silly distinction because by that standard you could equally say that my employer pays my rent because they are the source of income which I use to pay it. Property tax in the US is a liability of the owner. This is in contrast to other systems like the UK where it is a liability of the occupant.

The incidence of taxation is a well-studied concept in economics, with a solid theoretical foundation and empirical evidence backing it.

You dismiss its application as a 'silly distinction' and repeat the fallacy that the incidence of taxation falls on the party who is legally liable.

If you don't believe me, and don't want to read up on 'tax incidence', consider what would happen if sales tax were paid by retailers instead of customers. Would the flow of money change at all? Would any party be worse off or better off?

Re: Who died and left the US $7B?

#200

Post by AmericanChopper »

schneems wrote: post #118
somethoughts wrote: post #51

Earlier quoted context omitted.

Interestingly a lot of the larger philanthropic organizations are just as administration heavy as the US government and suffer from the same mission creep and the same obfuscated, bureaucratic decision making process, etc. Not to mention the leadership is often richly compensated (i.e. $1M in salary) and non-elected. In fact we should probably celebrate gifts to the US government more than we do.

> we should probably celebrate gifts to the US government more than we do. I had the idea that we should put a donation box on tax forms. The 100 top donators get on the “US 100” list (like Forbes) but it’s based ONLY on how much you donate, not how much you claim to be worth. It’s one thing to claim to be rich to a Forbes reporter, it’s another to have the (tax) receipts to back it up.

Most tremendously wealthy people don’t want to be known for being tremendously wealthy. Unless being known for being tremendously wealthy is a part of your wealth accumulating strategy, the attention it brings is almost entirely negative. Being tremendously wealthy without millions of people constantly chirping about clawing as much of it away from you as possible, or demanding an explanation from you every time you wipe your ass is a far better outcome, and most people who are savvy enough to become billionaires are savvy enough to figure that out pretty quickly.
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