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Gary’s story is dystopian: jail and slavery to a big corporation. Based move would be to get min wage job or live off benefits and do open source work.

Getting a job that pays cash in hand, or largely in non-cash benefits, would be the other obvious approach. Huge tax rates are generally counterproductive for society (even if you like big government and think the state is a better steward of money than the individual) because at some point people are no longer motivated to produce anything.

Or start a start up. You can pay yourself minimum wage with wealth tied up in the startup that wont be realised for a decade or more.

Seems pointless because he will have to pay nintendo when he gets that wealth. Draconian.

The idea is to moonshot: you succeed and paying nintendo is nothing. you fail and you’ve paid nintendo nothing!

The best would be a business that purchases his things for him.

E.g. he starts an LLC, profits stay in the company, company provides meals, vehicle, and phone+plan for the execs, plus travel expenses, and he gets a low salary from which I guess he still has to pay his rent.

Can't the LLC rent some flat as "company apartment" for "employees traveling on business", that happens to be in the same town as the HQ, and, since the LLC has only one employee...

Or just plain rent it and sublet it to the CEO for peanuts.

(This is all fun speculation, but Nintendo lawyers aren't idiots - the actual settlement likely covers LLCs, startups, benefits, and all other obvious workarounds. Hell, it probably makes Nintendo entitled to the 30% of unreported cash income and proceeds from crime as well.)

And in some countries these kind of benefits are taxed as income. And limited in amount that can be provided. But that requires sensible legistlation.

I assumed it was an order imposed by a judge and that there was some kind of standard process here. It's not abnormal for a judge to order you to pay X% of your salary capped at Y dollars a month, for example in child support.

It's unclear from the article what the nature of the payment is. It's described as a "fine" rather than "damages" but also mentions an "agreement with Nintendo".

Couldn’t I just sue his interest in the LLC in rem and now his creditors own the LLC, which they could liquidate?

He might be one tick better if someone else owned the LLC?

Haha, who told you that, billionaires by any chance?

You know that billionaires don‘t have salaries in the billions of dollars, right? They are largely paid in stocks, which are not taxed until sold. And you know they don‘t sell them if they can avoid it, because they don‘t want to pay high taxes?

Any source for not being liable for income taxes at the time of receiving stocks? That seems like a very obvious gap (which is not present in many EU countries at least, here we are definitely liable for income tax when RSUs vest).

I thought the reason for delaying selling of stocks is to avoid capital gains tax, not income tax.

I did a quick google, and most sources seem to support that taxes are due at RSU vesting time, e.g.

> With RSUs, you are taxed when the shares are delivered, which is almost always at vesting. Your taxable income is the market value of the shares at vesting.

https://www.schwab.com/public/eac/resources/articles/rsu_fac...

Why would this be different for the salaries of rich people? Isn't it more that they usually get large amounts of stocks at low prices if they stick with the company for a long time?

There are different types of stock options.

> ISO – no tax liability for exercising the option. You pay capital gains tax when you sell your contract or sell the stocks in your option.

> As you can see, there are tax benefits to going with the ISO – you don’t pay any ordinary income tax at any point.

ISO = Incentive Stock Option

https://www.vectorvest.com/blog/options/how-are-stock-option...

Makes sense with ISOs. Until you sell the contract or the shares from exercising the options, you don't have any actual money, and those options or shares can go to zero tomorrow (let's say extremely unlikely to happen, but that's not relevant to the point). So there isn't really any actual money to take from you until then.

The second you convert it to actual money by selling, you get hit with taxes (or Nintendo standing behind your shoulder), and you pay off your responsibilities using a chunk of money you've just received.

> Makes sense with ISOs.

I agree.

> Until you sell the contract or the shares from exercising the options, you don't have any actual money

There are other ways of converting them into money, like lending against them. And that is what billionaires are often doing, as it is financially much more attractive. With how things currently are, it would be stupid not to.

That is what I am trying to get across: If we managed to invert the incentives, billionaires might actually sell their stocks, and get taxed on that, rather than finding creative workarounds.

Then the state could profit, instead of banks.

> There are other ways of converting them into money, like lending against them

Isn't that essentially the same as reverse-mortgaging a part of your equity in your house (i.e., borrowing money against a chunk of ownership of your house) to get some liquid cash and then paying that off over time (which would make any income used towards paying off that loan also untaxed)? I was under an assumption that this was something that non-billionaire normal people do as well fairly often (disclaimer: i don't own any property myself, so I am not speaking from my own experience with it).

Of course you need to own a property to make use of that, so that would exclude plenty of people (i.e., non-homeowners), but it can be literally any property you own in any location (from California to Oklahoma to wherever else in the US). And the number of homeowners in the US is significantly larger and is more accessible than just billionaires and other megarich people.

Note: my comment talks about this in the context of the US-only, since that's what the rest of the comment chain is discussing + you can probably write a thick book if you tried answering it comprehensively in the context of all countries in the world.

> Any source for not being liable for income taxes at the time of receiving stocks?

Depends on the details.

For founders and early employees, the 83(b) election[1] can make a huge difference. Basically, you have the option to pay taxes on the value of the stock portion of your compensation at the time of granting, rather than when it vests. For an early stage company, that's basically $0.

I'm not 100% clear on the details, so if you're interested that's 1 good place to look.

---

1. https://www.investopedia.com/terms/1/83b-election.asp

If you received the stocks from someone who died and devised them to you, your basis will be the fair market value at the time of death and you will not owe taxes.

(They might have if they were over the $12.02m lifetime gift limit but they probably weren’t if they had $12.02m to give away).

Most of the billionaire tech CEOs that I've seen get stock comp in RSUs which are taxed at time of vest. That may be different in other industries though.

I'm surrounded by people who produce lots of things, researchers, writers, developers, teachers, ... While money matters, I'm pretty sure it's secondary in their lives. So, not convinced about the "motivation" angle. Maybe it's a US thing?

I think it depends what you mean by 'money matters'

Some people clearly like consumption. Many are probably like me where income has gone up reasonably career progression but largely live the same lifestyle as where comfortable many years back. Any increasing excess goes onto the mortgage and savings type deal.

For me I'm happy wearing whatever clothes vs designer and actually like driving an older/cheaper car for zero care factor type thing and have few things I wish to splurge on.

At the same time money really matters as I never want to think about it. Once over a threshold it's low on my motivation and I'd generally choose more interesting work. Below the threshold I will become very motivated with it.

> Maybe it's a US thing?

no. communism, wherever introduced, has never worked

Huh? No one said anything about communism.

he said that only in the US would work be disincentivized by high taxation. That is not the case.

Well, I was talking of "producing", not "work". At least in my mind, they're really not the same. Also, I'm sure that I did not mention communism. I do believe that the US has a very unique manner of looking at money, though.

By the way, can you think of a country in which taxation is so high that work is disincentivized?

> By the way, can you think of a country in which taxation is so high that work is disincentivized?

Denmark, this is a very common topic here with many people like doctors saying so

Interesting. I don't know much about Denmark, so I can't comment.

The US is a melting pot of different philosophies, including the way they treat money. Not only do they have people who worship money, they have people that don't worship money and also everything in between, including those who hate and love taxes.

I'm not so sure if we can classify a whole country into one stereotype, and to do so would most definitely be small and close-minded thinking.

That still has no visible connection to communism, unless you define "communism" as "high tax rates."

I am also curious to hear of any real-world countries where people choose not to work because taxes are too high.

Ask them all to work for minimum wage or less in those industries. You may get a few zealots they don’t care. Most will switch careers quickly.

My wife is a teacher, and pay is a huge concern for every single one, except for the handful that are rich, and just doing it for the fun of it.

I would highly recommend “basic economics” by Thomas Sowell. Will explain how profit motivation leads to people producing more with fewer resources. (efficiency) vs anything else that leads to less efficient use of resources.

> Ask them all to work for minimum wage or less in those industries.

You're introducing an interesting counterpoint but I feel that it's not the question I was attempting to respond to. I was commenting on the matter of huge taxes demotivating everyone from creating anything.

I am assuming that any more or less reasonable taxation would either decrease the revenue of everyone or decrease the revenue of most of the members of the wealthier N% of the population (as usual, the richest will somehow manage to avoid most taxes). Do you believe that such a scheme would make your wife leave her career for something less creative/generally useful?

> I would highly recommend “basic economics” by Thomas Sowell.

Adding to my looong list of books to read, thanks!

Move somewhere Nintendo doesn’t reach and go live your life again? I hear Russia’s nice this time of the year.

There are lots of places where you can work illegally without a contract and therefore without declaring an income.

Get a job he has to pay money to work at and invoice Nintendo.

At what point are you expecting the Pinkerton Agents to break down your door and drag you to a private black site on WotC's request? =)

I'm not sure if you're kidding, but Hasbro is notoriously litigious and might well do the civil equivalent. They are huge fans of the-process-is-the-punishment too.

The comment is referencing this story where hasbro did indeed hire pinkerton to show up at someone's house and intimidate them which has been shaking the mtg world recently. https://www.dicebreaker.com/categories/trading-card-game/new...

In case you missed it, WotC did in fact sent the Pinkertons to a Magic player's home. Not a great look, even for a litigious firm.

https://kotaku.com/mtg-aftermath-leaks-pinkertons-wotc-magic...

Props for fairly accurately describing what Gary Bowser actually did. Everyone just calls him a pirate when he was basically a middle-man for circumvention hardware... AFAIK he's not even a hacker?

That defense is not really believable given the emails that came out.

The punishment is egregious (esp. jail time), should've been something like 3x his profits, but the guy definitely sold ROMs (and other people's circumvention software!) (which apparently they added their own switch-bricking anti-circumvention to!) for profit.

He wasn't convicted of any of those things, though. You can look up what the actual conviction was:

> The official charges are "Conspiracy to Circumvent Technological Measures and to Traffic in Circumvention Devices" and "Trafficking in Circumvention Devices", both of which are federal felonies in the United States.

Perfectly reasonable to assume the worst about the guy, but given that Nintendo is involved I will assume that anything the government couldn't prove is false.

Great article, thanks! I had a thought regarding something you said.

> this left me stumped as to why the client-side calculation even exists

I suspect it is to validate that the price they showed you in the client was the same price they actually charged you. It seems reasonable enough anyway.

Well done! Can you expand on what this means? "we can just patch our binary with the appropriate opcodes"

Yeah, check out my response here:

https://old.reddit.com/r/MagicArena/comments/1385b90/heistin...

> Hack the planet!

Honestly this reads as "how do you do, fellow kids?"

You found a cool bug, then immediately reported it. That's not what the movie is about at all. Please don't corporatize hacker culture.

The kinds of people who do these exploits and cash in on them tend not to write blog posts about it on their personal website that links to their real-world LinkedIn.

It's strange this comment is being downed, because the "Hack the planet" quote from the movie (Hackers, 1995) and the tone of the entire movie is individual hacker vs corporate hacker. There is no way the main protagonist (Dade Murphy) would have disclosed a security vulnerability to the any of the companies in the movie. The quote in question is yelled by Dade while he is being dragged away by federal agents after saying "They're trashing" as a hint to the floppy disk he hid near the trash.

Disagree with what the poster is saying if you want, but he is accurate that the quote is being misused IMO

That's fair, although that movie is itself a little bit "how do you do, fellow hackers?"

You take that back, the film Hackers is a 100% accurate portrayal of the life of all hackers.

It's 10% exploiting zero days, 90% deploying demoscene animations

lol, "fellow kids" being people who get a roughly 30 year old movie reference.

You commented this on a site named "Hacker News" run by a venture capital firm