Renaissance executives agree to pay around $7B to settle dispute with IRS • Hacker News Board

Re: Renaissance executives agree to pay around $7B to settle dispute with IRS

#71

Post by matheusmoreira » Fri, Sep 03, 2021, 8:16 AM UTC

ceilingcorner wrote: post #41

The amount of human capital that has gone into financial engineering is depressing. Thousands of brilliant minds who are designing complex financial products instead of useful technology.

Frustrating, isn't it? I feel the same way about YouTube celebrities and sports players making millions while actually useful professions make significantly less. From what I've read the better paid doctors make about 300k/year.

I also feel the same way about most consumer technology being developed today. It's mostly advertising and intellectual property exploitation. Nothing particularly useful, really. Yet the people involved are making ridiculous amounts of money. Actually useful technology brings us closer to a science fiction utopia, not some corporate world cyberpunk dystopia.

Re: Renaissance executives agree to pay around $7B to settle dispute with IRS

#72

Post by carnitine » Fri, Sep 03, 2021, 8:49 AM UTC

ceilingcorner wrote: post #48

chii wrote: post #45

Earlier quoted context omitted.

> designing complex financial products who's to say it wasn't useful? after all, somebody paid for this complex financial products, so objectively speaking, they must have found it useful enough to have paid for it.

No, that isn’t what “objectively useful” means. Wealthy people pay for this engineering because it helps maintain and increase their wealth. That’s about it. There is zero societal benefit from something like a CDO.

All the people who bought houses due to the ability of financial engineers to lower mortgage requirements by quantifying and hedging risk probably disagree.

Re: Renaissance executives agree to pay around $7B to settle dispute with IRS

#73

Post by carnitine » Fri, Sep 03, 2021, 9:49 AM UTC

mikeyouse wrote: post #25

cidquick wrote: post #13

Earlier quoted context omitted.

0, the Medallion fund is capacity constrained.

Sure - but they do have a stable of other funds with no such constraints (although with "worse" performance).

Not sure why you say worse in quotes - they are much, much worse.

Re: Renaissance executives agree to pay around $7B to settle dispute with IRS

#74

Post by mattalex » Fri, Sep 03, 2021, 10:12 AM UTC

loeg wrote: post #12

Barrin92 wrote: post #10

It's always amazing to me how in the world of high profile white collar criminality you can make billions and your punishment is to pay a few percent of it back. I wish ordinary theft worked like this. Steal 500 bucks and your punishment is to return 100.

Your figures are sort of backwards. The article claims they saved $6.8B in taxes and will owe $7.7B in fines.

After some quick following, the fund had an 71.8% annual return from 1994 through mid 2014. I don't know how the numbers look like nowadays, but assuming that this continued throughout the time in question here, we can conclude that they made a lot of money through this

Re: Renaissance executives agree to pay around $7B to settle dispute with IRS

#75

Post by throwaway0a5e » Fri, Sep 03, 2021, 10:50 AM UTC

hellbannedguy wrote: post #47

Barrin92 wrote: post #10

It's always amazing to me how in the world of high profile white collar criminality you can make billions and your punishment is to pay a few percent of it back. I wish ordinary theft worked like this. Steal 500 bucks and your punishment is to return 100.

It's time to tie alll Fees/Fines to 1040 income. (Patent fees, DMV fees, judicial fines, municipal code citations, school tuition, and even property taxes, etc.)

Get ready to see a lot of poor people ignoring the law just as much as the white collar crowd does then.

A democratic society won't stand for the % of income that these fines and fees are to them being applied to everyone.

Re: Renaissance executives agree to pay around $7B to settle dispute with IRS

#76

Post by cpcallen » Fri, Sep 03, 2021, 10:59 AM UTC

Aside from the technical difficulties (requiring a time machine and all that), is the IRS even authorized levy taxes on executives who lived and died before the US was even founded??

Re: Renaissance executives agree to pay around $7B to settle dispute with IRS

#77

Post by jpadkins » Fri, Sep 03, 2021, 11:41 AM UTC

matheusmoreira wrote: post #71

ceilingcorner wrote: post #41

The amount of human capital that has gone into financial engineering is depressing. Thousands of brilliant minds who are designing complex financial products instead of useful technology.

Frustrating, isn't it? I feel the same way about YouTube celebrities and sports players making millions while actually useful professions make significantly less. From what I've read the better paid doctors make about 300k/year. I also feel the same way about most consumer technology being developed today. It's mostly advertising and intellectual property exploitation. Nothing particularly useful, really. Yet the peo…

here is a way to rationalize it (not sure if this helps you)

doctors provide very valuable services to dozens - hundreds of people (treating disease). youtube/sports celebrities provide a small amount of value to 100k - millions of people (amusement or entertainment).

so the value they get back from society is because of the number of people touched, not the depth of value for each person. If we figure out how to scale disease treatment like we scaled entertainment, then (fewer) doctors would be wayyy richer than entertainment stars.

Re: Renaissance executives agree to pay around $7B to settle dispute with IRS

#78

Post by ProjectArcturis » Fri, Sep 03, 2021, 12:41 PM UTC

ceilingcorner wrote: post #57

kvathupo wrote: post #56

Earlier quoted context omitted.

Why work for society's benefit at the expense of your well-being? I once asked an Oxford-educated post-doc, who had worked as a quant, "are you going to go back to finance?" He replied that he simply doesn't know. He wants to do mathematical research, but both academia and industry stifle such ambitions. For the former, unless you're in the literal handful at IAS, you'll have to waste the majority of your time teachi…

Yes, one can’t really blame the individuals themselves. Especially when the incomes are double or triple that of academia. It is a deep structural problem.

Yeah, I moved from neuroscience to a hedge fund. Since then I've had individual days where I made more money than my annual salary as a neuroscientist.

Re: Renaissance executives agree to pay around $7B to settle dispute with IRS

#79

Post by xtracto » Fri, Sep 03, 2021, 12:52 PM UTC

mattalex wrote: post #74

loeg wrote: post #12

Earlier quoted context omitted.

Your figures are sort of backwards. The article claims they saved $6.8B in taxes and will owe $7.7B in fines.

After some quick following, the fund had an 71.8% annual return from 1994 through mid 2014. I don't know how the numbers look like nowadays, but assuming that this continued throughout the time in question here, we can conclude that they made a lot of money through this

Id i understood correctly the teick they tried allowed them to treat short term gains as long term. Reducing their tax fron 35% to maybe 20%. So those 6.9 billion was 20% of their profits. Meaning the full amount of their profits were around 35 billion. That's crazy! A money printing machine.

Re: Renaissance executives agree to pay around $7B to settle dispute with IRS

#80

Post by dailo10 » Fri, Sep 03, 2021, 1:15 PM UTC

justinjoshuak wrote: post #67

Barrin92 wrote: post #10

It's always amazing to me how in the world of high profile white collar criminality you can make billions and your punishment is to pay a few percent of it back. I wish ordinary theft worked like this. Steal 500 bucks and your punishment is to return 100.

That's not really what's happening here. Tax obligations under the law are not clear cut. There's ambiguity. The law is often general in nature and old. It may not be clear how the law applies to a specific business. A large business could seek out the opinion of ten different tax professionals and get a range of answers of how much tax the law requires them to pay. Even the IRS may not be certain. It's not unusual o…

Except in this case they went too far and the IRS busted them - to the tune of $7B.

Let’s not pretend like they weren’t trying to get away with not paying their fair share of taxes here.

And to OP's point - if the punishment was in proportion to how much they tried to steal - well, you’d probably see a lot less “creativity” in these tax schemes.