Comment by Jhsto | Hacker News Reader

Comment by Jhsto | Hacker News Reader

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I understand where you are coming from, but let me add that this method of counting income applies to any investment income.

So say you put money into an index fund, but something unexpected happens. If you need to liquidate your savings while being a student, the government will slap your fingers for trying to think long-term.

Either way, I admit this only affects the poor -- if you are a bit better off you should be able to afford to incorporate an LLC for 2500€ (half a year rent where I live). By making yourself the sole owner of the company, you can get around all these problems, as juridically the LLC is a separate entity from you doing all the trading. This kind of setting is legal, but practically off limits for many.

Government aid for students is also practically unconditional in Finland and usually covers your rent and then some, basically making your own life instantly ramen profitable. This sounds utopistic to many, and it certainly is, but I think so much potential is lost by the government discouraging young people to take risks on their own.

So say you put money into an index fund, but something unexpected happens. If you need to liquidate your savings while being a student, the government will slap your fingers for trying to think long-term.

Not really much of a concern, as you would have to be wealthy enough to have spare money to put into an index fund while retaining enough liquid assets to cover your living expenses.

By making yourself the sole owner of the company, you can get around all these problems, as juridically the LLC is a separate entity from you doing all the trading. This kind of setting is legal, but practically off limits for many.

Not even remotely true. SMLLCs are disregarded entities for tax purposes, so their transactions are taxed directly to their owners. And legally, the concept of veil-piercing applies to SMLLCs generally, and especially to undercapitalized SMLLCs (meaning any LLC without sufficient independent assets to pay off all liabilities against it).

> Not even remotely true. SMLLCs are disregarded entities for tax purposes, so their transactions are taxed directly to their owners. And legally, the concept of veil-piercing applies to SMLLCs generally, and especially to undercapitalized SMLLCs (meaning any LLC without sufficient independent assets to pay off all liabilities against it).

This is true in Finland, which has fewer forms of corporations than the US for example. The corporation can decide to not pay out all of its earnings to its sole shareholder, but in such situation, the company needs to pay an additional 20% tax for the retained amount of money, for conducting a successful year of operations. This is rarely a good idea, but in this case where the owner is subject to constraints of personal income imposed by the government, it might make sense.

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