Buy, Borrow, Die – Explained
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I'm not talking about the wealthy people that have 100% of their wealth tied up to company (stock) that they operate - but the wealthy people that are just asset-rich, with zero operational duties.
Their wealth is handled by wealth managers, they probably don't even know what they own. But minimizing taxes and hoarding wealth is priority number 1.
I don’t think this is true. Most people pay more in taxes, and receive the pleasure of a refund check come April.
And if they do, they’re likely not doing it with tax reasons in mind.
Regardless, most people don't like tax, and there's not much they can do about it if they are W-2 wage earners short of opening a side business or maxing out retirement investments (which isn't helpful to someone trying to buy a house before they are 65).
If you had the time and resources, wouldn't you try to affect change in government? It's not fundamentally any different than showing up to your city council meeting to get housing developments approved/blocked, for instance. Moreover, most people don't think of themselves as bad people, so they probably legitimately think they're doing the Right Thing™, rather than being some sort of cartoonishly evil villain trying to ruin society by starving government of funding.
This is going to be hard for the politically inclined to understand, but no, it's simply not the case that everyone everywhere is preoccupied with finding/creating legal ways to push their will/preferences onto other people.
I'm also not sure who you're suggesting is ideologically blind. All I'm saying is that given resources like a huge pile of money, many would not wish to use that money to coerce others or otherwise change their local political situation to better suit them. Instead they'd use those resources to increase their own resilience, i.e. simply choosing to leave the neighborhood or situation that was bothering them instead of trying to change it and assuming their own interests are the best and most appropriate ones for everyone.
As the parent is pointing out, everyone thinks they are doing TheRightThing(tm) when they collect/use power to force their views on others. Instead you could have power/wealth and just choose to not fuck with other people. That's not being ideologically blind, it's just an ideology that says, you know what, even my strongly held opinions could be wrongheaded, and maybe I shouldn't be using my arbitrarily acquired wealth/power to steer anything besides my own life.
It's only a viable option if you trust your political system to function when your back is turned.
You can either opt out, or you can wade into a corrupt system and start finally enjoying your ability to join in on all the corruption. In the 2nd case, what's the plan moving forward for an ethical actor really? Using money to bribe politicians into stop accepting bribes? Should we bribe citizens to stop electing politicians that accept bribes? If you don't want money involved in politics then I don't know how you start to fix that with money.
Not for my own benefit, no. Just like I don't base my votes in elections particularly on my own benefit, and never have.
So perhaps that's why wealthy people seem so tax-averse - they may be as averse as everyone, but for them the aversion is much cheaper and easier to do.
(This reflects a more general principle I summarize as: the only thing necessary for evil to triumph in the world is that good men are separated from it by enough layers of abstraction.)
No, most people don't care about their tax the way wealthy people do. I ended up in a wealthy family through marriage and I can tell you nobody I my original social circle spent even a fraction of the effort the wealthy do when it comes to taxes.
In that regard, most people minimize their taxes by doing nothing. The wealthy have to put effort in to get the same effect.
https://dailyyonder.com/low-income-families-risk-losing-thou...
When I got a bit more money, mortgage, stock options, investments, etc. then I started to have options - do I pay this way or that way? Do I invest in this account or that account? Does HDHP/HSA make sense for me or not? Should I sell the certain investment to harvest the tax loss or keep it? Etc. etc. then my asset structure is more varied, so are the opportunities to pay more or less tax. I imagine for really wealthy people (definitely not me, still) there are even more options how to pay less taxes, and they are doing right serious considering them (or paying people to seriously consider them) - if I ever get rich, that's what I'd do.
I don't think this is actually true. It's a nice rhetorical soundbite, but if you count properly (e.g. all taxes all assets owned by Buffett actually pay) there's no way he pays less unless his secretary is extremely exceptional for some reason. It is true that her tax structure is probably different from Buffett's, so if you creatively form your query so that taxes that Buffett predominantly pays are excluded and taxes that the secretary predominantly pays are included, you could probably find a way to justify it, but that would not be a valuable insight.
And of course the whole "pays less", as formulated, is a bit deceptive - his rate of one of the taxes is lower as a percentage, but he actually pays vastly more in actual money (Berkshire Hathaway alone, in which he holds a substantial share, pays billions in taxes every year).
What you see as "minimizing taxes" could be a necessary responsibility. If you're on the outside looking in, you may be uninformed about their circumstances and responsibilities. Its definitely a 1% of the 1st world problem, but its still a responsibility that has to be managed; Unless you're familiar their THEIR circumstances, its easy to incorrectly assume motivations.
Be glad you live in a country where you have this problem to complain about.
Is it not entirely logical that a cohort that actually pays attention to where 20%, 30%, 40% of their money is going ends up wealthier than one that doesn't?
Many if not most rich never got rich, they happened to be born rich. In the situation I'm talking about, the said family has been wealthy for two centuries. And my in-laws are significantly less well-off than the generation before. Their ancestors may have been gifted in some way that got them rich in the first place, but there have definitely be some regression to average since then and their management of their wealth has been much less efficient than the one of my parents for instance (who aren't wealthy today, but are still clearly better than their own parents).
In fact I suspect that these people are obsessed about taxes because they know their fortune is ever going downhill because they lack the thing that made their ancestors successful so they spend their efforts trying to salvage their wealth instead of making one of their own.
The rest of your comment seems to be a political commentary on whether inheritance is legitimate. You're entitled to your opinion, but it comes across a bit like sour grapes to me.
I've written the opposite actually. They would be much better off if they tried doing something else with their time rather than spending it avoiding taxes. The amount of effort (and money actually, tax attorney aren't cheap) would be much better invested elsewhere.
Edit, a fun fact I thought about: they are donating to charity so that 66% of the donation could be deduced from taxes. And yes, their main motivation is tax exemption not the charity cause (which is a nice side effect). Which means they are willing to pay a 50% premium to give money to somebody else than the state. Now talk about rationality and how it makes them richer.
What paying more in taxes gets more done in the things paid by taxes.
It's like there is a direct dependency between a money received from the taxes and the things made/built on the tax money.
"Bankrupt" doesn't makes sense as a concept when when you can print the currency of your debt
It is extremely disingenuous to put this conundrum at my feet, as if my actions, with my puny tax which I am too lazy to even calculate how much it would be in percents, but it's sure to have quite a bunch of zeros in front, had even the tiniest influence on those decisions. It never did and never will. Maybe Buffett's decisions may, but not mine. So stop trying to shame me for things that have nothing to do with me and never could have anything to do with me.
The rule of monopoly?
The rule of feudalism?
Greed isn't exclusive to to systems of government.
This, of course, doesn't work if the incumbents capture the government and pass regulations that constrain the competition which is supposed to be keeping them in check.
(defun parkinsons-law (k m p n)
(/ (+ (* 2 (expt k m))
p)
n))
Where:
The retval is the number of new employees to be hired annually
k is the number of employees who want to be promoted by hiring new employees
m is the number of working hours per person for the preparation of internal memoranda (micropolitics)
p is the difference between the age at hiring and the age at retirement
n is the number of administrative files actually completedMy conservative expectation is that we all have to start contributing a lot more over the next few decades if we want to maintain our standard of living, otherwise it will just gradually get worse. I hope I’m wrong.
The austerity policies of the neoliberal turn has already caused standards of living among the less fortunate to drop over the last few decades already. The 2008 crisis is when it started to impact the middle class and we're still feeling the impacts 16+ years later.
Federal outlays are not granular enough and increasing Federal outlays is pretty meaningless.
There are so many valuable services provided by the US federal government. People just take it all for granted.
Obviously, this was supposed to be the job of the person you elected.
But in 2024 we definitely have the technology to let people vote on smaller units of issues that they care about.
I would be completely in support of people self-allocating their taxes as long as (1) the distribution still had to add up to 100% so you can’t under contribute and (2) government offices capped their income and redistributed excess to the general funds instead of letting some feel-good departments waste money they didn’t need but were allocated.
A few counties away, the library district said without a tax increase, they’ll have to shut down. “No new taxes” carried the day. Library shut down. Now folks are howling. And again it’s the non-voting kids that suffer.
If this is the behavior of folks about issues affecting their neighbors, in their own town, I’m not too optimistic what sort of support we could see for any kind of longer-term issue, especially if it isn’t atop the media cycle.
So I don't pay Israel's defense budget, but that money is reallocated evenly to everything else.
I find it hard to believe a meaningful number of people would opt out of libraries and schools assuming their overall tax burden is unchanged.
Empty nesters or childless people will funnel their tax money to things like parks, fire trucks, and other things.
I might be too pessimistic though, I tend towards liking the idea but I'm concerned about the changes it could cause.
Members of Congress often propose things like this because it sounds good but in practice it's meaningless.
Suppose that Democrats don't want to pay for bombs and Republicans don't want to pay for makework jobs, so they both say they don't want their tax money to be used for this. Then the government takes the money from Democrats they didn't spend on bombs and uses it to make up the shortfall in the makework jobs programs and takes the money Republicans didn't spend on makework jobs and uses it to make up the shortfall in the military, and nothing changes at all.
The only way it could actually do something is if you got the money back you didn't want spent on that thing, instead of letting the government spend it on something else. But then most people would do that with large chunks of government spending because they'd rather the money than the programs.
That other stuff doesn't even cost a significant amount of money by comparison and could be well-funded from the savings.
The government doesn't lack for revenue, it lacks for efficiency.
If you go to early Reddit, you will see it a staunchly pro market, anti tax stronghold - as was HN.
For eons, “competition” was the mantra along with “greed is good”. Many people who own wealth reached there with that ethos.
No one has to “contribute more”. That’s the opportunity for whichever bright eye person decides to take advantage of the gap in the market.
If you want a counter to this dogma -
1) Yes. Market inefficiencies should be open as opportunities to the industrious
2) No. Not all market inefficiencies are the same. for example, Public goods (police, military) are not better off with multiple companies. Insurance is similar.
3) Lobbying for convenient rules, lobbying for weakened regulators has given far more advantage to firms, which then use that wealth to become rent seekers. They dont need to innovate, because they can litigate.
4) “more regulation means higher compliance costs” was a new one I saw. Guess what - if your firm uses contracts, that’s a compliance cost. Why not just do it by a hand shake? Save your lawyer fees.
Compliance costs ensure fair play between entities of unequal strength. You can trade on your competitive advantage, not on the tertiary strengths, such as a firms ability to pay for a better legal team.
Edit: Soap box - This is about Personal Responsibility.
The place where most people agree today, is the desire for a fair fight.
How can I reasonably defend the idea of personal responsibility, in something like the sale of NINJA loans.
If firms field trained, resourced, networked sales people to sell loans to people who have a negligible chance of even understanding what they are getting into, then how do I reasonably bring up personal responsibility ?
Can people reasonably be expected to read all the contracts they have signed? ( Netflix, Uber, gmail, phone, etc.)
Algorithmic ads are fine tuned to grab your attention and keep you online. There is more money spent on UI UX research than the GDP of some global south countries.
Forget America for a second - imagine how regulators in smaller economies handle these things. Heck, that’s if they even have time to worry about these things.
One of the big problems here, and the lobbyists do this on purpose, is that they promote the false notion that the issue is the quantity of regulations and not their substance. Quantity can be an issue when the number of regulations becomes excessive and their sheer number thwarts competition by creating high barriers to entry, but "incumbents want fewer regulations" is not only misleading but typically the opposite of what really happens.
Incumbents want to get rid of regulations that protect competition and add regulations that inhibit it. What we need, of course, is the opposite. Which isn't as simple as "make number of regulations go up/down", it matters very much which ones and what they do.
> Compliance costs ensure fair play between entities of unequal strength.
This is completely the opposite. Compliance costs are generally fixed costs, i.e. every entity has to hire a lawyer and pay them $250,000. For a megacorp this is negligible and they don't even notice, for a small business they're now out of the market because that amount of expense would bankrupt them. The more rules you have, the higher that number gets. This is the sense in which the absolute number of rules matters.
But it still depends what they are. Even if you only have a couple of rules, the incumbents will want rules that only they can comply with. Conversely, you can hypothetically have a lot of rules and still have them easy to comply with, though this is certainly easier said than done. What you really want is to have a small number of rules, but the right rules -- the ones the incumbents don't want and their smaller competitors do.
Just to be clear, you are quoting typical lobbyist talking points here? I definitely disagree with such a simplification.
I agree with the fact that incumbents want to make it easier to make money.
> This is completely the opposite …
Yes, I am in firm agreement that the content, quality and enforceability of the regulation matters.
That said, I used contracts as an example, specifically to combat this common reduction: “Compliance cost price smaller businesses out of the market, so they are bad for competition and the little guy.”
Writing up a contract is more expensive than trusting someone’s word, it is fair to say that having no contracts would enable more small businesses to flourish (lower costs).
Many things reduce costs, however firms / businesses having to bear compliance costs is not bad for the polity.
But now we're back to "what the regulation is matters more than how many there are". There can exist rules that benefit small companies, obviously. But if the rules every company has to comply with can fill three shelves at the library, this is not going to benefit small companies because they will be unable to operate.
> Many things reduce costs, however firms / businesses having to bear compliance costs is not bad for the polity.
It depends what they are.
One of most insidious is regulations that are ostensibly neutral, i.e. there is a societal benefit of approximately $100 per company on average and to get it the rule is going to impose costs of approximately $100 on the average company. The books are full of these because they provide some ostensible benefit and the cost isn't even being calculated. Nobody fights against them too hard because they're approximately breakeven.
Except that each of them adds $100 in compliance costs to every company, and there are ten thousand of them, so now every company in that industry has a million dollars in compliance costs, which small companies can't sustain. So the rules on their own provide neither benefit nor cost to society, but impair competition, and that has a societal cost.
you and me are back to this.
Most arguments dont get this far, unless these answers are first furnished. Which was the spirit and intent of my parent comment.
And I agree, good regulation is better than absurd regulation.
> ostensibly neutral… small companies can’t sustain
Sure.
Rather than add a bunch of subsidies in the form of tax breaks, the government could just spend money on programs that accomplish the aim they want. By making this complicated system whereby subsidies are accomplished by negating taxes you would otherwise owe, this means these benefits are more likely to help people who are otherwise going to be paying more taxes, and the fact that these require legwork to opt into without being at risk of the government thinking you're defrauding them, it seems kind of inevitable that it would devolve into a subsidy mostly for wealthier people who are good at navigating the bureaucracy of it, or rather, who can pay someone in what has become a cottage industry of tax (evasion) specialists who ply the trade of doing so in service of people who can afford them
Like, yeah, given that the game is set up this way, the obvious objective of it from the standpoint of any taxpayer engaging with it is to pay as little as possible. But if the aim of the tax breaks are something besides creating said incentive (and the industry around it), it seems like bad mechanism design to have it work this way in the first place
My goal isn't to make money for money's sake. Nor even leaving oodles of money to my kids. I'd metaphorically just spend my days strumming a guitar for the rest of my days. The economy is just a distraction from what I really care about.
Is there a word for this phenomenon? What makes everyone believe they're a special case?
I have some "relative" taste of it in that I'm a lot better off than the past 3 generations of my family minimum. But I was still far from what I consider "wealthy" even within the tech community, let alone to the country at large. I didn't feel it fundamentally changed how I approached finances outside of being more willing to splurge on some tech (something I've always wanted to do) after I put away 20% for savings.
But that's only one magnitude. Who knows, money corrupts for a reason.
Consider that the type of people who are more inclined to accumulate wealth are the ones faced with this choice.
The people who'd rather strum guitars don't often find themselves in that position. So your observation is painfully anecdotal and not really useful.
ESPN recently did a movie on what happened to poor people who suddenly became multi-millionaires when they joined a pro sports team.
TLDR: they quickly spent it all and wound up with nothing. It turns out to be amazingly easy to burn through a million dollars.
On a similar note, I do understand the peer pressure that comes with being on a team like that. "tradition" where you buy your entire team dinner for a night on the order of high 5 figures as a start. I can start to sympathize with how that spirals when the environment itself pressures you. More reason to make a financial planning class mandatory in school. Won't save everyone, but it'll at least bring awareness.
After all, we live in a market society, shouldn't students be at least able to read a simple P&L statement and balance sheet?
I always wanted to start a business, so on summer break I took a course in basic accounting from the local community college, and it has served me very well ever since.
Will Smith is another cautionary tale. As a teen, he made it big with his Fresh Prince rap songs. He blew all the money on partying. Then the IRS came knocking. It had never occurred to him he had to pay income tax on his millions, which no longer existed. He made a deal with the IRS. On his show "Fresh Prince of Bel-Air", all his earnings other than an allowance went to the IRS.
The issue here is that it depends what you're trying to do. If you have eight figures then you have all the housing and vehicles you need and more money is not going to make a big difference in that regard.
But that's not what people use it for at that point. Mostly what money past that is used for is business. You own a company and you want to get into the auto industry? You're going to need to pay designers to design the cars well before you make any revenue, and then you're going to need factories and raw materials etc. Suddenly a million bucks is chump change and if you want to make it work you need a lot more.
https://cdn.xsd.cz/resize/21404adf37a83977870fe87fe0eb4ea6_r...
to this:
https://www.em.muni.cz/cache-thumbs/logo_muni_web-1580x790-2...
Why does a public university, one of the most popular in the country, need a new logo? And if it needs a new logo, why don't they assign it as a project to the students of arts/marketing faculty?
http://kenlevine.blogspot.com/2011/09/one-of-nbcs-great-blun...
I worked as a webdev for the Cornell University Library (more than 70 web sites) at the time when Cornell changed their logo from a nice little square that looked like the J.C. Penny logo except it said "Cornell" on it and then they made everybody doing any kind of visual communication change their logo including hiring a friend of mine as a consultant for almost two years to change all the letterheads and similar things for suborganizations that didn't have graphic design talent in house.
We got this thing instead
https://brand.cornell.edu/logos/
which I think is OK graphically on its own but unlike the square it is demanding on the environment that it is in and might force you to change things around it to look good whereas I liked the square because you could just put the square near an edge or a corner and it always looked OK.
To ask a team of designers to do brand and marketing research and design a new logo for a big organisation that will use said logo everywhere is not a 1K euro freelancer job.
To be fair, the new logo is a bit crap, but in the grand scheme of things, 80K is not a lot at all.
Arguably the public image of a university is its most important asset. Because that attracts the best students, researchers and third party funding (public and private).
There is overhead for the person itself (employer subsidized healthcare, office space, equipment) and there is overhead within the organization. Like a secretary and accounting departments who cannot be billed to a client. And management layers of course…
Most likely the 80k are enough to cover one person-year for a consulting agency in Eastern Europe.
That said, the new logo is atrocious.
But I believe my point stands regardless—80K is very little money indeed from a group perspective.
Damn straight, and they should do the same thing with their website. And while we are at it, they could use the students to design and engineer their buildings and do their accounting and lawyering and administration.
Hell, while we are at it, why not get them to do the teaching as well?
They already do. They’re called TAs and grad students.
One, in many fields, the more advanced you are, the harder it becomes to remember or even understand why or how one may struggle with understanding the basic material of the field. TAs are still closer to the experience of having learned the basics themselves.
Two, teaching material is a great way to deepen one's understanding of the material.
It also happens to provide a nice balance of giving students a way to earn some money while working in the subject, while still being quite cheap for the university. (That last part does have a smell especially in US universities with their insanely high tuition fees. But that feels like a larger and largely separate issue.)
Also this is pure after the fact justification with no meaning. Most people who are rich became and remained so by maximizing their monetary position and needs to excuse nor reason to actually continue doing so. They do so because it perceptibly makes them more rich and more successful even if ultimately is just points on a score board with no real meaning for their life.
Nobody minimizes their taxes in order to ensure their money is better spent. They spend the excess on themselves like everyone else. On bigger and better castles to demonstrate their wealth, on planes, on another bigger boat.
Sad part is the US would have spent millions on a "consultant" who would barely do any work and instead be a yes man to accept accountability for some admin who just wanted to play political theater for a promotion in another campus. That's where Atlus shrugs.
And 80k for a logo is incredibly cheap.
The marketing for the school is the success of the students and the research.
I own a home and I have assets that I use to pay my daily expenses. I am, by your definition, asset rich. I don't need to "do" anything other than maintain the investments. (I also do work, but that's besides the point).
On an intellectual level I realise that if we are to have a public sector it needs to be paid for, and that I'm never going to be the arbiter of exactly how the money is spent.
But at the end of the day, I sit here and think, how much do the police, military, and the other basic functions really cost, and is the right way to do that really to say -
Hey, you bought something, give me 20% of that!
Hey, you earned something, give me 20,40,45% of that!
Hey, you sold something, give me 20,28% of that!
Hey, you died? Give me some of that!
etc. etc. If you minimise nothing and just do the "golden path", then you end up paying well over 50% when you stack it, and it feels more like theft than a "trade for civilization" as some like to put it, because I know that it doesn't cost that much.
In my country taxation functions less like "we need this to run the Government", and more like "it's politically popular for us to redistribute". Which is logically how democracy is always going to function, but it doesn't mean that I have to agree.
I prefer to pay for things that I derive benefit from and I think my family, community, country etc benefit from, I prefer not to pay for things that don't, it's honestly no different to me than say, I'll buy a TV if I want one, I won't buy a 100 inch TV because I think that's unnecessary.
And ironically enough, it costs money to figure out how to optimize budgets and labor. So your tax minimization is just ensuring that the government always performs the greedy algorithm instead of focusing on a proper traversal of the problem. It's a death spiral.
Also, we can never really say how much something costs. Most funds for taxes go to welfare. Guess what the classic conservative economic administration always targets...
A lawyer told me, this is how you scam people. Mainly Medical Doctors. Pitch an investment to them. They don't bite. Then mention, that they will save taxes with this investment, and they will say: Where do I have to sign?
edit: Hoarding is buying assets that could be used productively and storing them somewhere instead of using them. People with a political axe to grind like taking words with negative connotations and applying them to things that don't make sense to manipulate you.
If you think about it for more than two seconds you will understand we already have a word that describes someone with a lot of assets, "wealthy" or "rich". So hoarding as a term only makes sense when used in the context of someone stockpiling something that could be used by people in need. "Hoarding" shares in a company does not make sense for example.
For me, the answer is certainly not 100 and not 0, let’s say it’s 80 cents. Speaking for myself, I think that marginal 20 cents is by definition hoarding because the marginal utility of money to me at that point is negligible.
Sure it could benefit my kids or get me a nicer retirement home. But there are kids that are homeless, and our public education system is crumbling. I personally would much rather those 20¢ be redistributed to people who need it. Just speaking for myself.
Think of it this way:
Angel investors and venture capitalists are directly funding the creation of new productive businesses with the expectation of a future return / reward. This future reward is only possible with secondary markets such as the public stock exchange. Additionally, employees at these companies are typically rewarded with shares to align incentives. These stock based grants motivate them to work harder and produce more and this is only possible because they can then go and sell their shares on the public market.
An example of hoarding would be like someone buying a bunch of property to park their wealth with low risk but not renting out any of the homes or apartments they purchased because it's too much effort.
I would still posit that the second order marginal utility of those 20 cents is higher in hands of somebody who needs it. In the same way you talk about how that 20 cents impacts the derivative of “progress”, think about how those 20 cents would impact the derivative of the people it’s redistributed to.
It’s my opinion that there’s no better ROI than investment in early childhood education, for example. Because it’s an investment that pays compounding dividends integrated over an entire human lifetime.
And again, we’re not talking about removing the whole dollar from the market, just 20 cents. An amount, by the way, that is around what would be taxed if you were investing in a non-tax-advantaged account. There’s some irony in there.
The innovation that happens because people build companies and technologies that they go on to sell in public markets impacts every single human going forward as long as there is not a disaster. Meanwhile, the 20 cents of marginal utility is used once and according to the recent study on how people used a universal basic income, not to great effect.
You only need one transistor, vaccine, airplane, refrigeration level invention every few decades to justify how much more impactful it is.
I made no reference to UBI. I don't think UBI is a solution to the system of poverty. But we don't need to go there.
There are ways to redistribute wealth that are less direct than SNAP and UBI. The public education system, our transportation infrastructure, the funding of basic research (which contributed to the transistor, modern vaccines, and modern passenger air travel).
There is a whole spectrum of investment between "give a man a fish" and "fund the construction of a competitive industry of privately-owned fish farms to feed people fish"; and it's worth understanding why we're often presented with the false choice between them, instead of the options in between. It's not because the one on the right is most efficient.
https://www.pbs.org/newshour/amp/economy/houses-are-getting-...
>If you think about it for more than two seconds you will understand we already have a word that describes someone with a lot of assets, "wealthy" or "rich".
Semantics? I think your first metaphor for productivity was better. Are you simply buying a yatch you use twice in your life ever, or are you living your dreams of sailing the deep blue in a flashy way? Or in the gray area; do you turn it into a business to have other rich people pay to ride?
How you use your assets or liquidity matters a lot more than what medium you store it as. =
It’s so strange that this behaviour seems to be worshipped by so many people.
Why would we do that as a society? Do we need people that hord anything for profit, do they add value to your group?
This is the real multiplicative effect of being really rich: It's not knowing that you'll never be short of money, but how many things you don't even have to think about, because they are handled in your stead.
This is where I'd expect AI will change the world for consumers first: The tasks that now require either a lot of energy, or hiring an assistant or eight, becoming so cheap a good chunk of middle class will be able to afford it.
In democracies, the massive bulk of people are voting to steal the money of the rich. That’s not cool.
Lol, yes, steal. Hi Elon!
If you fully play out your argument, the least wealthy and least successful deserve it the most to have their remaining wealth taken because they are not assuming any risk in this society.
I think that is a very destructive world view.
No, if you fully play out his argument then the least wealthy deserve not to have their wealth stolen. His argument is that theft is bad, it isn't a complex argument with unexpected implications.
Although it does seem a bit faulty regardless, the amount of risk someone is taking has no bearing on whether taking their stuff is theft.
If this is what you believe raising taxes is like, I'm not surprised you're against it. But no wonder that you're struggling to get this point across, because it's outlandish in how far removed it is from what I perceive the instrument of taxation to be from concept to application to its morality... Forgive me for my own overblown comparison, but yours is a position I'd expect to hear in a comic from Scrooge McDuck.
It is not unreasonable to me that you have to pitch in for common goods if you live in a village, and should you refuse to take part in this you might find yourself in a situation where you have to either move out of the village or forfeit your share.
If you earned your wealth through driving on public roads, after receiving a public education, without it actually being blatantly stolen due to a public police force, etc etc etc.
Then it is also your responsibility to pay for these items so that they dan continue to be used for future generation.
Public roads can be taxed by use. Public education should be paid by people who participate.
You apply an "if" conditional here in a manner that's morally correct in my opinion. It's just that even if you didn't partake in those activities, you're forced to pay for them all the same. That's the issue.
You can move out of the country of course and find one that's more politically suitable, but the bottom line in my mind is that people in most societies are so different from each other that democracy just doesn't work at the scale it's trying to be applied. Sure, deciding what your society should collectively strive for at a neighborhood level might be possible. City level is reaching, and state or country level is ludicrous.
I think the only responsibility at the federal level should be watching the borders, and I can't convince myself otherwise no matter what material I read.
Never. No human being has ever thrived in total isolation, and no one’s accomplishments are solely their own. You may not like it, but you are unavoidably part of a society (even if you move into the wilderness and never interact with another person again, you were still raised in one). You wouldn’t have been able to gather whatever resources you’ve managed to amass without that society, and in return it requires you to share the burden of helping everyone else thrive as well.
Ethically is it right to increase the risk to accumulate wealth? That depends on what you buy with that risk. It’s well-established that people will take risks for fun, and they’ll take significantly more risk when security for themselves and their family is on the line.
Folks with hundreds of millions or billions in assets or millions in income have vastly higher levels of security compared to folks with $100 in the bank and a $15/hr job with no benefits.
So, how much is it ethical to take from the rich to ensure that the poor have decent odds to improve their situation and have a basic level of security? In America, it’s been as much as 60% in income taxes for the highly-paid. A wealth tax of 40% upon death still exists, even if the rich have found a way around that. It sounds like America has already established that 40% taxed to the benefit of all is ethically okay.
So we should probably be killing the buy, borrow, die strategy of tax avoidance, especially on transfer taxes should be collected. But could we take more from the wealthiest and have that be ethically okay?
Let’s say we have someone with $300M in assets and those appreciate 8% annually on average. Those assets will be worth $600M in 10 years. Assuming a spend of $10M per year, they’d still be worth $400M by the end of 10 years. So we’ve had at least $100M generated compared to where we started just for existing and living a lavish life. But we could have taxed that $100M at 40% and put 40M into public services, infrastructure, or entrepreneurial grants to provide tens of thousands of people with more security without materially affecting our asset-owning individual. Even just distributing $40M to supplement incomes for low-security folks would translate to 2500+ people getting a chance to improve their situations.
So, is it ethical to tax the excess asset appreciation that the individual didn’t use for anything? It’s not that it didn’t grow, it’s that it grew a little less fast. And we were able to impact thousands based on that. I’d argue yes, and I struggle to understand how “make life no different for the individual vs make life better for thousands of people” comes down on the side of the individual. It’s not until taxes grow higher than appreciation that I start to think it might be unethical.
But as you approach taxes equaling appreciation, I can see how it could be counterproductive. I think that’s not the argument though. It wouldn’t be terribly difficult to tax assets based on appreciation above their highest appraisal, with appraisal triggering taxes being owed. Certainly no more complicated than our current taxes assets and the loopholes that lead to buy, borrow, die.
I disagree with the guy upthread, but it’s a bit dense to say that taxes being theft is oxymoronic when you clearly understand what he meant.
Reality doesn't care about your feelings.
Firstly - many developed countries have higher tax rates than America.
Secondly - the issue isn’t being rich. The issue is that tax avoidance for so many years has resulted in absurd levels of wealth capture.
Thirdly - no polity level discussion can happen effectively, because that wealth ensures productive discussion is mired in controversy by the time it reaches the voting public.
This is mostly not true. People are often confused into comparing US federal taxes to the totality of taxes in other countries, but US states levy taxes too. The total of state and federal taxes is often in excess of 50%, which is higher than the OECD average.
> The issue is that tax avoidance for so many years has resulted in absurd levels of wealth capture.
The primary cause of this is not tax avoidance, it's market concentration. If your company has 0.1% of the industry and is worth a billion dollars and you pay a 0% effective tax rate, you have a billion dollars. If your company has 50% of the industry and is worth $500 billion dollars and you pay a 70% effective tax rate, you still have $150 billion, i.e. 150 times as much. Also, effective tax rates have never actually been 70%.
> Thirdly - no polity level discussion can happen effectively, because that wealth ensures productive discussion is mired in controversy by the time it reaches the voting public.
The real problem is that the tax system is intentionally convoluted to conceal from the public who is paying what and where the money is going. This benefits the rich in many cases, but it mostly benefits Congress, who can lie to people about what's going on to get their votes even while screwing them in particular. This is not a partisan issue; both parties want more money and want it to go to their cronies, so neither of them wants to simplify the tax system into something sensible and harder to game, because it would interfere with the diversion of everyone's tax money to the politically connected.
I went to double check, and the best answer is that America collects less tax/GDP than its peers. Even accounting for state and federal taxation.
https://www.taxpolicycenter.org/briefing-book/how-do-us-taxe....
> Taxes on personal income and business profits made up 48 percent of total US tax revenue in 2021, a higher share than in most other OECD countries, where such taxes averaged 34 percent of the total (figure 2). Australia, Denmark, and New Zealand were the only OECD countries where over half of total revenue was generated from such taxes.
> In the United States, taxes on just the income and profits of individuals (not businesses) generated 42 percent of total tax revenue, compared with 27 percent for all other OECD countries combined.
So that clarification is warranted.
> Convoluted taxes
This … I mostly agree that simpler tax codes are beneficial, I am not sure its complexity is the core reason discussion is difficult.
Tax payment itself is made as painful as possible, so that it remains a focus of ire for citizens.
Hmm. I suppose in the spirit of simplicity, it would be ideal to have an automated tax generation form, and a simple tax code - making it easier for people to just pay their taxes and get on with their life.
And then have progressive taxes for people higher up the wealth ladder.
> Market concentration
Your point is that this is not the primary reasons for wealth disparity?
I dont know - we are well aware of the kind of steps firms take to avoid paying taxes, and instead move them to tax havens. The numbers indicate that firms tend to pay much lower taxes in America compared to their OECD peers.
Again - the point here is on “primary reasons” for wealth capture.
Again, this depends on the state, because all the states have different tax systems. You're also comparing by percent of GDP rather than something like tax dollars per capita, but that has two major problems. One, US GDP per capita is higher than the OECD average and so is the cost of living, so in the US the tax collected in real dollars per capita is higher and the percent of GDP that you could collect as tax without bankrupting ordinary people is lower.
And two (this is the big one), the US healthcare system represents 17% of US GDP and is mostly private insurance. In countries where the entire healthcare system is paid for out of taxes, tax rates are correspondingly higher, but in turn US citizens are paying in the form of insurance premiums. So to be comparing like with like you'd have to count those insurance premiums when comparing to countries that pay the premiums entirely out of taxes. Or to put it another way, you couldn't raise taxes in the US and spend the money on anything other than healthcare and regard that as equivalent.
> This … I mostly agree that simpler tax codes are beneficial, I am not sure its complexity is the core reason discussion is difficult.
It's the thing that enables tax avoidance.
There is a very simple way to do taxes: If a business sells a product or service in the US, they collect whatever the tax rate is and remit it, showing the customer what proportion of the purchase was tax so they can see how much they're paying. Let them advertise the pre-tax price; that should satisfy the people who want citizens to notice when they're paying taxes. The business can in turn deduct any tax paid on cost of goods sold from what they remit, like VAT.
Since this uses a single tax rate, there are no games to be played arbitraging the rate or fudging with transfer pricing, and you can get a progressive tax system by combining it with a UBI, which produces a progressive effective rate curve.
Then there's no practical way to avoid the tax. If you buy or sell something, the tax is remitted. When Apple sells an iPhone in the US they have to remit the tax regardless of where they made it or where their headquarters is or what country they stash the profit in. No more loopholes. No more pretending that the employer is paying half of FICA instead of it being a >15% regressive tax on the working class.
> Tax payment itself is made as painful as possible, so that it remains a focus of ire for citizens.
I feel like this is a talking point. Some tax reform guy says something like this and it's highly unsympathetic (Do you see? They want you to feel pain! On purpose!), so then the other side likes to point to it to deflect blame for the status quo onto their opponents. But that doesn't explain why FICA has an income cap, doesn't apply to investment income and hides half the amount being paid from the taxpayer. This is over $10,000/year in tax from the median household with half of it being hidden and all of it being collected transparently. If these "want you to feel it" people had the real power then that wouldn't be happening.
> And then have progressive taxes for people higher up the wealth ladder.
The naive legacy way we try to do progressive taxes is one of the avoidance mechanisms. People hire their kids or cousins who are in a lower tax bracket to move family business income to someone in a lower tax bracket etc. You can get the result you want from a system which is actually simpler.
We have a bunch of social programs like food stamps and housing assistance which have phase outs. The combined rates of the phase outs and ordinary taxes are higher than the effective rates imposed on the wealthy, whether now or historically. So convert the benefits to cash (UBI), eliminate the phase outs and use a flat tax system which effectively makes the phase outs implicit. The effective rates on lower income people are now low or negative. You at slightly below median income get a $12,000 UBI and "pay $10,000 in taxes" so really it's -$2000. A billionaire gets the same UBI but it doesn't make a dent in their tax burden so they're paying the full flat rate.
> I dont know - we are well aware of the kind of steps firms take to avoid paying taxes, and instead move them to tax havens. The numbers indicate that firms tend to pay much lower taxes in America compared to their OECD peers.
Companies avoid paying taxes because they can. The question is, is this the primary reason the companies are worth so much?
But it clearly isn't. Apple currently pays an effective tax rate of just under 16%, i.e. they keep 84%. If they paid three times that much (48%), they'd keep 52%. If we oversimplify and assume their valuation is proportional to how much profit they keep, this would reduce it from $3.5T to $2.2T. Which is still preposterous. A founder who owned a significant chunk of Apple would still have a million times more wealth than an ordinary person who owned the same proportion of a small business. Tripling their tax rate wouldn't even change the number of significant figures in their valuation -- because it's a percentage, so it's proportional to the base, which is the real thing out of all proportion.
Moreover, the company size is how they can pay executives such high salaries -- and those salaries are tax deductions to the corporation. A small business can't pay an individual employee tens of millions of dollars a year, they don't even have that much revenue. Concentration of wealth is caused by market concentration.
I find that hard to believe.
I highly suspect that the "materially worse" deal you speak of is simply less liquid cash, but more retained wealth.
Plus there is a concerted effort to maintain the narrative that the government should be starved, because the government is the most wasteful body that can be.
Being rich isn’t just some sort of statistical metric - it’s also a clear cut option to have your principles and desires accommodated.
It’s not hard to believe.
To determine whether its 60-40 (tax avoidance - convenience optimization) would seem to be the question to pursue.
He seems to me to be an analytical thinker with 1st percentile intelligence, who struggles with emotional intelligence and impulse moderation. Probably a pretty fun guy to hang out with, but also an asshole more often than he should be. Nobody is even nearly perfect, and hero worship tends towards the delusional in most cases, so I tend to steer clear of thinking too good or poorly of anyone.
They would have rather foregone that income entirely, then be forced to pay full income taxes on it. Of course they didn’t argue it this way, or else the idiocy would have been obvious even to them. They were arguing that plan B “results in less tax paid overall.”
That is what their metric was: which plan results in less taxes paid. Not which plan results in more take-home pay.
"but then taxes would be too high!" yes, so we should also reduce income taxes when we do this.
Quit flogging the upper-middle class to pay for the technically unemployed rich.
If you tax LTCG at income rates, then you will just start incentivizing other schemes to return profits to shareholders, which is going to be economically inefficient, harder to manage, lead to consolidated ownership structures, fewer liquidity events for small shareholders, greater inequality, and less prosperity.
Long term capital gains having lower tax rates isn’t feature, not a bug, for everyone not just wealth managers.
The fantassy that one can pay for wellfare by only taxing the rich more or by reducing their loopholes is a pipedream.
Or you could have a society with very low taxes and very low to none social programs, especially if your government doesn't love fighting expensive wars all the time.
Wars and wellfare programs are all very expensive. Even miserly wellfare programs like what the US got is creating some real debt default risk over there.
I don’t think people have fully put together that the same personality type that was a slave owner prior to the 1900s is the same personality type of a venture founder, investor, venture, capitalist, banker, etc…
That is to say their goal in getting rich is to have a dictatorship, not necessarily simply to have a nice boat and a house and raise a family
The goal of the mega rich is the same as it always in history, which is to dominate enslave and basically shape the world to what they want it to look like without being intermediated by people with less power.
Further the more wealth people have, in my personal experience, the less they want to have any constraints by other organizations, specifically governments they disagree with.
If people haven’t, they should read about the “business plot”
Rich folks tend to avoid taxation at all costs, since that tends to be one of the best ways to retain their wealth.
Want to buy an expensive car? Prepare to pay upwards of 100% car value in taxes.
Same for cigarettes. Around 200% tax just to give 2 examples.
Now, you "can" save your income tax by sleights of hand, by showing more expenses than actual or by misreporting things but still, you dont always get to pay 0 tax. That never happens.
[1] - https://www.youtube.com/watch?v=xc8epam4NyY [video][3 mins]
David Mitchell on Tax Avoidance from The Last Leg
The bill gates example where someone has 100 billion in sp500 is rare. You don't get insanely rich through diversification
It's disheartening to see so much thought and deliberation going into an obviously toxic idea (taxing unrealized gains) when the obvious solution (removing the cost basis step-up when assets change hands) is being ignored.
Inherited wealth is the least earned, so it should be politically palatable to change this. But presumably because such a change would acutely affect the people who make laws in the country specifically, it is never seriously considered.
We have a limit on gifts and according to this is 13 million. Just make it that.
What would be the downside here other than extremely wealthy having to pay some taxes upon death?
It's your home. It's no more free or unfree, earned or unearned than anything else.
The home that I grew up in is.. hell, I'd consider it to be "mine" and my siblings more than almost anything else I have.
If you got a home worth that much, you can pay some taxes on it.
https://www.mansionglobal.com/articles/more-than-1-500-homes...
1,500 homes sold for over 10m in a year. We're talking about the richest of the rich. That's exactly who should be paying some taxes. The people bitching about losing 'their' home this way... are either a) delusional or b) looking for a way to protect their incredible wealth.
Is your family home worth more than 10 or 20m dollars?
In my country our threshold is significantly lower by the way - it's around a million, so bog standard houses get hit by it.
I think that inheritance taxes are wholly equivalent to wealth taxes, e.g. "you have a thing, I like that thing, give me that thing", and therefore morally wrong.
I could agree with them on the basis that the money were minimal and solely used for security e.g. police and military, it's an insurance policy against theft, the Government has a monopoly on force and that's better than warlords.
It's not used that way though, so I reject the premise.
Instead of trying to analyze hundreds of different what-makes-house-above-bare-minimum aspects we can simply use the price as a good indicator of the underlying value.
And 1mil house is definitely not bare minimum. It is clearly above average.
Everything started with another account saying "In my country our threshold [for inheritance tax] is significantly lower by the way - it's around a million, so bog standard houses get hit by it."
So my point is that 1mil house is not a "bog standard house", whether we look globally or in the USA-only.
Sure, there are some spots in the world in which the average price of the house is going to be higher. But that's irrelevant. It only means that the location is what making that house exceptional.
I understand your practical considerations/explanations about living in an extremely costly place where everything (housing, food, etc) is expensive. But the decision to stay there is on you. "if I sell here and move to North Dakota I'll be a wealthy individual there, but I am not going to be doing that" - is the crux of the issue.
That's exactly what the ultra wealthy seem to generally believe too. Sorry that many of us reject your premise that you should be freely protected to screw over everyone else and think that's a moral decision (it's not, but I won't waste my time).
More or less having to do that would be good for society and mildly annoying for the like five dozen existing corporate dynasties on the planet.
Second, it is irrelevant. The capital gains tax that would be due on a normal step-up in basis during life is independent of the estate tax.
Assume there was no exemption and you bought stocks 20 years ago for 100 K$ that are now worth 1 M$. If you die, then your estate would need to pay estate taxes on 1 M$.
However, if instead you sold it the day before you died, you would need to pay capital gains on 900 K$. Then you pass away with N $ = (1 M$ - taxes) in cash. Your estate would then additionally need to pay estate tax on N $.
The step-up in basis is the difference between these cases. Your inheritors get your capital gains (step-up in basis) tax-free, but you still need to pay the estate tax.
A - In a universe with cost basis step-up on death, they die with gains taxed at 0% and then pay 40% estate tax on everything.
B - In a world without cost basis step-up on death, they die with gains taxed at the 20% long term rate and then pay 40% estate tax on what remains.
Thus:
The step-up causes less tax revenue by percentage from the >$300M crowd who use the BBD strategy, but it causes more tax revenue by percentage from the $13M<crowd<$300M who do not use the BBD strategy. The latter pay more tax with option A! 20% on a chunk and 40% on the remaining chunk is less government revenue than just 40% unchunked, especially if the capital gains being realized on death are a majority of the net worth.
I wonder which crowd has more worth-at-death in aggregate (in the absence of BBD and the like -- if estate tax were to be paid by all, no loopholes), given that the less wealthy crowd is a much larger population.
N is your cost basis. M is the gain. E is the estate tax. G is the gains tax.
((N + M) * E) is tax on the automatic step-up, option A.
(M * G) + (N + M - (M * G)) * E is the tax on the non-automatic step-up, option B.
Reorganized to ((N + M) * E) + (M * G) * (1 - E), it is clear that option B is strictly more taxes for any estate tax less than 100%.
Of course, it would be long term (20%) and estate (40% but on slightly less), not one or the other. Mea culpa.
If farms and ranches are the best place to hide family wealth, then family wealth will pour into agricultural land. That inflates values and pushes out the actual ranchers and farmers. If farming is just a byproduct of your tax-avoidance strategy then you are unlikely to try too hard at it. We actually need farms, and nobody wants them to become tax-avoidance shells.
Even public businesses are not trivial to value for very large shareholders who don’t have the ability to easily sell all shares at once without moving the market quite a bit. But in any case, removing this loophole would just encourage the ultra wealthy to put their money into opaque businesses and then try to “value” them as low as possible. So it’s not so easy to fix.
You would pay an estate tax (on the total value of something, regardless of its cost). And then you'd still (when you eventually sold it) owe capital gains tax.
Regardless of whether you think that particular reasoning makes sense, it definitely doesn't make sense if there's no estate tax (which there effectively isn't for most due to the multi-million dollar exclusion) since there's no risk of double taxation.
Step up basis was actually repealed in 1976. But there was immense pushback at the time around record keeping and Congress eventually agreed and retroactively cancelled the new law.
Whether the answer would be different today in this age of computerised record keeping .... ?
Let's be real. No wealth is 'earned'. It's almost entirely luck and social connections. No different from inheritance.
Besides, inheritance can be hard work, psychologically. Your parents may be in a very different socioeconomic group than you for most of your adult life. Your baseline expectation for a 'normal' lifestyle is somewhat elevated (due to the lifestyle you experienced in your childhood) but, for most of your adult reality, you're broke and you feel guilty knowing that your child (the only one you can afford to have) can't have the same childhood that you had.
You work like crazy just to try to earn a living to get back to 'normal' (what you experienced in your childhood) but, deep down, you know you that your best shot at getting there is inheritance in about 30 years' time when you're at death's door (because, with all the stress you experienced, you know you're not going to live as long as your parents). Your biggest worry is that your government will fall to communism and there will be no inheritance.
Your life was basically ruined since the start of adulthood as soon as you were confronted with the ugly reality that labor of any kind is worthless and capital is everything. A reality that your parents will never have to face.
If the government wants to be perfectly consistent and tax people based on how easy it was for them to earn money, then it should impose wealth tax since the amount of wealth tells you the amount of luck and social connectedness at play... And this will also impact inheritance to some extent, but to a fairer extent.
Sure you could call a long life and decent job luck, but a lot of people live into their 90’s.
What about the crazy hours that doctors often work?
If the system was fairer and doctors experienced close to 'free market' competition, then I would agree 100%, but it's not the case.
I'm sure it's very difficult but doctors have it really good compared to other professionals who also work late and have to compete on a global marketplace with no professional protections/regulatory constraints.
1. Allow unrealized losses to be deducted.
2. Once a certain percentage of the gain is taxed, step up the cost basis by the amount of tax paid. That way you avoid double taxation (once under the unrealized value and again when the asset is sold).
3. (optional) Keep the tax rate on unrealized gains low. Even 3% would be significantly higher than what we have today.
Under this logic, it almost seems like a no brainer. People who have a ton of wealth in unrealized gains would pay taxes progressively over time instead of being hit with a massive tax bill when they sell (or potentially no tax bill when they die due to the step up in cost basis). Feel free to poke loopholes in this idea.
Also, there is a real debate to be had about if housing should be primary considered an investment or a basic need by society. Many argue that the focus on housing as an investment in the US is a primary driver of our housing problems.
Property taxes are a use tax (roads, police, fire, schools, etc), apportioned base on property value, it is not a capital gains tax.
This seemed really reasonable to me until I started thinking about how it might work in practice. The sequence of returns can make this proposal ineffective in practice, even if it makes sense on first blush.
By way of explanation: Let's say you're the founder of Pets.com in an alternate universe where unrealized gains have always been taxed (and correspondingly unrealized losses can be deducted). It's 2000, and you've just had an incredible run. You have also paid incredible taxes along the way.
Then your company blows up and goes to zero.
Now you've payed an incredible amount of taxes on your paper gains, and have realized no gains whatsoever. So the entire enterprise only resulted in an enormous real loss to you. Sure you can now carry forward those losses, but so what? You're never going to make up the difference, unless we're also letting your heirs carry forward those losses into the next century or two.
Given the exposure to massive tax bills without any actual profits, who in their right mind would start or invest in a business under that tax code? Who would dare invest a large portion of their personal worth in public equities given the risk that they plummet, as they did in 2022, 2020, 2008, 2001, 2000, 1987, 1962, 1929, 1907, etc.? Who would take a gamble on a big real estate development? And so on.
It seems to me that a tax on unrealized gains massively disincentivizes investment and the creation of anything new, and therefore the only way to tax capital gains that makes sense is if we calculate the tax due based on when chips are taken off the table. Issues like Buy, Borrow, Die are better addressed with other changes to the tax code that undo the weird incentivizes presently in place (e.g. eliminating the step-up basis, possibly at some threshold if the goal is to make the tax code more progressive). Unless, that is, your goal is to actively disincentivize entrepreneurship and investment. Which if it is, I guess fair enough, but then none of us should be surprised to find ourselves with a lower standard of living in a decade as a result.
That said, I don't see why there's a need for a deduction here. There isn't one for property taxes. Sure there is one when you sell your property at a loss, and that's also already the case when selling stock. Additionally such a tax like this won't ever cause you to lose your entire stock ownership as it's always based on a fraction of your ownership. And, last but not least, you could also impose caps or progressions.
And property taxes are deductible in the US. I’m not sure where you got the impression they aren’t.
In all seriousness, that is extremely unlikely to be the case, especially in broad terms. I mean, to purchase public stock at all you already must do so from a licensed broker, who mind you, is already required by law to report the cost basis of shares purchased by investors. To require them to regularly move 2% of shares owned by investors, to the government's ownership, would be rather trivial in cost to do. Hell, it could be completely automated.
And the cost of it doing that would likely be much less than property taxes, which, is a far less liquid asset, and much more costly to assess than equities, but is nonetheless profitable to tax. I mean the SP500 alone has a market cap of ~$47 trillion, which is, surprising almost the same exact value as the entire US real estate market, but much more liquid.
Additionally, whether it is even profitable at all could be besides the intent of the tax here. It doesn't necessarily have to be profitable, from which perspective, poor liquidity and changes in outcomes isn't a problematic at all. It could be even the intent.
> And property taxes are deductible in the US. I’m not sure where you got the impression they aren’t.
Okay fair. I suppose you could do something similar, but also don't see why it's necessary, just because we do so for other taxes.
Otherwise, when do you expect the government to actually realize its gains? If I have a house I intend to live in until I die and the govt take 2% of my stake away each year, when would it be allowed to force a sale to realize it?
Do I just lose my house once it has a majority stake? Does it just wait until I die? If it does, how is this better than an inheritance tax that is significantly easier to implement?
Not as simple as it sounds...when you can set up original ownership of an asset into a trust and have control of that trust change hands.
We need the political will, the legal problems are solvable.
Taxing unrealized gains in general I think is impractical since many assets simply don't have well-defined valuations, but if you take out, say, a $10 million loan using, say, shares in a privately traded company, then those shares are apparently worth $10 million dollars because the owner and the bank agreed they were.
Presuming you can continue to service your debt payments as interest rates and your income varies over time, and are never subject to a margin call due to a drop in the value of your collateral, something even the most powerful are at risk of: https://www.ft.com/content/cf78d815-7ade-40fc-a68d-ec73accb7...
It’s not really any different than what the average American family does with their home.
Why should inheriting a property reset the basis?
What a ridiculous notion. Someone's already getting an asset for free (inheriting it), and we're further subsidizing the tax liability on it. Taxes that were due to the government are wiped out.
If an asset was worth $50k in 1950, and is now worth $100k, it would feel really weird when capital gains tax is collected on an asset that actually lost more than 80% of it's value over the years.
But whether it's on you or not is beyond the point. Being taxed on top of a loss is not a good thing.
Also there are plenty of reasons not to sell a depreciating asset. For example, CEO willing to maintain control over company, or simply not wanting to send bad signals to the public by selling their shares (because that would depreciate the asset even more).
A better argument would be to adjust basis for inflation instead of resetting it.
Let's say you have $10M in in index funds. You don't want to cash out and pay capital gains, so you get a $5M credit line with your stock as a collateral. Then, there's a market crash, your collateral is all of sudden worth just $4M, and you have a bank knocking on your door - but you already spent $5M on a McMansion. Now what?
You can opt for "risk-free" assets, but then, if they're truly risk-free, they're probably not appreciating in a way that would make this tax gamble worth your time.
People preoccupied with strategies like that are the ones who are burning through their net worth at a much higher rate, so the difference in tax burden actually makes a difference. They're usually just wealthy enough to have a "wealth advisor". Doctors, successful techies, business owners, etc.
It’s greatly ironic: in the interest of avoiding minor taxes, they lose major assets to their bankers. It wouldn’t surprise me if the same bankers who profit in the downturn from the margin calls are the ones who sold their clients on the strategy.
Any time you go into debt you need to make sure you have a margin of safety. It’s an instrument of some value but it’s a sharp blade to be wielded carefully.
You take out a few % a year to pay for your cost of living. For example, you rent a house, or take out a mortgage and pay for the house over time using the few % a year.
Even ignoring all tax considerations it's often better to buy with a mortgage rather than full cash.
For example a few years back you could get 1-2% mortgage rates in the UK. Right now it's more like 4-5%.
Ignoring tax fun, if you have 10 mil in a share index returning say 7-8% annually and you want to buy a 5 mil house then your best strategy is to sell say 500k for the deposit, then sell just enough to pay the interest + minimum repayment in all following years.
I may be missing your point but the example you give looks like an argument to tax unrealized gains.
> Let's say you have $10M in in index funds. You don't want to cash out and pay capital gains, so you get a $5M credit line with your stock as a collateral. Then, there's a market crash, your collateral is all of sudden worth just $4M, and you have a bank knocking on your door - but you already spent $5M on a McMansion. Now what?
Now you have a problem caused by leverage - and it was at least in part because you didn't want to pay taxes. If unrealized gains had been taxed just the same the concern about paying taxes when cashing out would disappear.
Think about this: how much would you pay to Bobby to avoid paying $1000 to your Uncle Sam? You are technically better off even if you pay $999…
I have no doubt that Mortimer Silverspoon III is better off, and that the taxpayers as a whole are worse off. But I bet that the real winners are the partners at Quahog Sachs and Dewey Cheatem & Howe LLP. The complex paperwork and the decades between origination and conclusion probably make it nearly impossible for anyone else to know who came out on top. But we definitely know who lost.
Assuming the write-up is correct, it provides substantial evidence that the ultra-wealthy are capable of sheltering gains in ways that I am not.
As to the risk issue, I see no reason why the “asset” couldn’t be a combination of multiple assets, or an asset like an index ETF that tracks a diversified bundle of things. E.g. a substantial portion of my net-worth is tied up in a Vanguard target retirement fund (one asset). Most financial advisors consider this fine from a risk perspective.
Anyone can borrow against assets (securities and otherwise) they own. Home equity loans are big business, and securities-backed loans aren’t obscure below $300M.
Frankly, it’s the “but the ultra-rich get special low-interest loans” bit that’s the most unbelievable part of the write up. But it’s also the keystone: Without these magic loans, it’s just standard estate planning (which is all about tradeoffs of taxes vs. control) + a likely suboptimal investment strategy.
*shakes fist* "Damn you, Lucky Ducky!"
If you are rich, and is not borrowing at high LVR, it means the lender has a reasonable belief that you can pay back the loan (and the collateral is also good). The lender _can_ give you a lower interest rate, due to the loan market being pretty competitive, because they take on less default risk compared to a non-rich person taking the same loan.
it's not gonna be a massive difference, but for large sums, probably does make a difference worth doing.
Given the other comments pointing to the SEO benefits of creating a subreddit just for a single post, it has shades of an effort to seed the information space and shape the narrative in advance of the tax fight by gaming the search results prior to uninformed journalists and legislative aids developing an interest in the topic, many of whom will search Google for background information and context as the tax fight plays out.
Nice catch, and interesting regardless of the motives.
Is this person SEO scamming? I don’t know for sure, but the subject matter is the same that I frequently see frontpaged from /r/FluentInFinance by obvious bots, although the motive seems to be political rather than commercial.
It sounds like someone is just trading taxation for paying the lender some portion of their stock appreciation.
Presumably that's lower than what they would pay in taxes, but I wonder if that's always the case. The investment bank has a unambiguous motivation to maximize the amount of money they can make.
It seems like the most frugal approach is to minimize costs and periodically sell small amounts of your asset to cover your costs.
"When a loved one passes, the last thing on most people’s minds is taxes, but they do play an important role in settling the estate. In Canada, there is no inheritance tax. You don’t have to pay taxes on money you inherit, and you don’t have to report it as income. But this doesn’t mean your inheritance is immune from taxation.
Why? The moment someone passes away, the Canada Revenue Agency (CRA) considers all their assets as part of their estate and taxes this estate directly, before any money is released to beneficiaries. In other words, the reason you don’t pay taxes on your inheritance is because it has already been taxed.
Here’s what else is worth knowing about how taxes impact your inheritance." https://turbotax.intuit.ca/tips/do-you-pay-taxes-on-money-yo...
In the USA, while there is an inheritance tax, there are a few widely used loopholes.
There are many web sites that claim this is rampant and from what I can tell the idea of “buy, borrow, die” was developed by Professor Edward McCaffery back in the 1990s, but are there any actual reliable stats on how many lifetime low interest loans are being given out? How would such a lender stay in business? Lenders with that kind of capital can't find something more profitable than letting someone have hundreds of millions of dollars of money for decades and maybe hopefully the stock market isn't in a bear market at that time and they can get their money + .5% interest and some of the capital appreciation? It is very common to make short terms based on using stocks, etc as collateral. But how common is it to have a lender be ok with deferring interest for decades until the person dies? Not saying there aren't stupid lenders, but doing a quick search, I have not found one stat on how many lifetime loans like this are actually being done.
There is a treasury department page claiming that about 160 billion dollars in unrealized gains are not being taxed, but that isn't talking about stock being used as collateral, that is talking about simply the value of assets increasing - that is entirely different.
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 wouldn't he have?
Quite a lot of value creation going on. Good on them!
The demand for shares in a company incentivizes entrepreneurs to create companies so that they can then sell the shares.
So even passive investing contributes to innovation.
That's like $40K/hr if they take no sick days or time off to go yachting. Their labour must be super important.
https://www.indeed.com/career-advice/pay-salary/average-hour...
of course it is important. They spent $10B dollars on plant and equipment, and/or R&D, and it generates more value over time (which translates to the $80[0]M earned).
Why would "labour" only be valuable if it was the person _doing_ the work?
If it's a fake post, someone put a lot of time into making it convincing? They cite tax law and precedent cases etc..
I have not personally validated any of it myself though.
So this one random lawyer on reddit has hundreds of clients with a net worth of $300M+?
Or, they're LARPing.
I wonder which is more likely.
Those are not the only options. That's a pretty bad strawman.
I don't think that's necessary.
So, they are either a lawyer who has done it for hundreds of clients worth $300M+, or they are lying.
I see they claimed to "do it for a living". I see where they say it only makes sense for clients with 300M+ net worth.
There are plenty of other ways to interpret those two points. For instance, it may be a thing they do at their job, but not the only thing they do.
Could this guy be LARPing? Sure.
I looked up a few of the references, they look accurate. They would need to be an excellent LARPer to get that detailed. Or they actually know what they are talking about.
https://www.sfgate.com/news/article/Inside-look-at-a-billion...
I'm not sure many financial advisors for the super rich would be recommending this method based on this.
And most ultra-rich that own lots of shares of large publicly-traded corporations own them outright. So this seems suspicious I would say.
I mean I often see news about some CEO or other selling shares, and how this is announced in advance to not be insider trading. I have even seen sometimes the documents submitted to the SEC posted on the net. There are no trusts involved.
His advisor did his job by warning that this could go wrong if Oracle stock dropped massively. But it never dropped that far, so he was fine.
https://www.cnbc.com/2023/10/10/number-of-people-with-100-mi...
Once your money timeline stretches to the second generation one can start thinking in much bigger ways that have nothing to do with individual ownership of assets. The amount of assets doesn’t have to be large to start thinking in longer term cash flow cycles.
They were asked the question:
> If you take a loan out to live off of of 80 million you would at least need to pay 5% to make it a true loan. The IRS That is 40 million in interest over 10 years. You said .05% loans, that is not realistic because you would get hit with inputted interest and phantom income from the difference between your loan and the IRS AFR rate.
To which they answered as follows:
> To your third bullet point - that’s a great observation, but by law these products are actually securities, not “loans” as the term is used in Code § 7872. That’s why it’s important that the stock appreciation rights are the predominant means of profit from the transaction for the investment bank. Where the taxpayer and investment bank can’t come to an agreement that would result in these products being characterized as securities, the interest rate will be much higher - SOFR plus 1.5-5 basis points - but may be “paid-in-kind” (i.e., the interest is not required to be paid in cash currently but added to principal).
It seems like the most plausible explanation.
> Generally, in exchange for such favorable terms (i.e., interest-only, matures on death), the bank will ask for a share of the collateral’s appreciation (essentially, "stock appreciation rights"), and this obligation will be settled upon the borrower’s death along with the loan. The amount of the bank’s share of the collateral’s appreciation depends on many factors and it is fundamentally a matter of the bank’s underwriting process.
The reddit post claims the inheritors get to avoid taxes. If that is false, the reddit post is a lie, nothing philosophical about it. It does not depend on anything.
Using the numbers in the report, the $17M in taxes would be paid after just 10 years, not 40 years, because the asset appreciated from $50M to $108M in 10 years and the buyer wanted liquidity at that point. After 35 years, the FMV of the asset is $740M, and tax liability would be (740 - 50) * 1/(20 + 3.8 + 5) = $198.72M
So, the question is not whether it would be cheaper than paying $17M in taxes, but whether it would be cheaper than paying ~$198M in taxes.
A couple of other things:
1) it's not clear they are taking out a loan against the asset. The report uses line of credit interchangeably with loan. If it's just a line of credit then they are only paying interest on the credit they use not the full loan amount upfront.
2) loan/LOC allow the capital to be liquid while continually having exposure to appreciation. This is valuable in itself because otherwise you have to make a choice between having exposure or remaining liquid. It's challenging to put figures to this aside from the obvious statement that a liquidation event results in a loss of 8% compounded YoY appreciation. This can be partially mitigated by repurchasing cheaper assets at the cost of some of the liquidity.
The report says:
> I’ve seen anywhere from 0.5 percent to 3 percent, even in the current interest rate environment
So, in the scenario where one takes out a loan for $97M at 3% interest after an asset of $50M appreciates for 10 years, if we assume that provides sufficient liquidity for the borrower to not take out subsequent loans during the following decades, then after 25 additional years the borrower would have paid ~$41M in interest. At 0.5% they'd pay ~$6M.
In an alternate scenario, if we assume the borrower takes out a loan for 90% of equity at 10 years, 20 years, and 30 years, then at 35 years they would have paid $127M in interest on a 25 yr loan + 15 yr loan + 5 yr loan at 3%. At a 0.5% interest rate they would have paid just $20M in interest.
All these scenarios are less than the $198M in taxes they'd owe while also giving them 8% exposure.
I do not have figures for how much the bank gets. My assumption is that they would negotiate terms where the interest rate is lower if the bank receives more of the asset or vice-versa. There's no reason for the loan recipient to take the terms if it's bad value for them relative to paying taxes at time of liquidation.
On the whole, I think the report makes sense as a reasonable approach for avoiding excess taxation.
> At a 0.5% interest rate they would have paid just $20M in interest.
Plus these "stock appreciation rights", whatever and however much they are.
30 year bond is ~4.2%. You'd pay $60M in interest on a single loan at 10yrs and $183m if you took out repeated loans at 10yr/20yr/30yr and repaid at 35.
I assume that the math works out such that if you had a LOC for 100% of the asset, at the 30 year bond rate, and continually maxed out the LOC, that the interest rate paid would equal the taxation rate.
The point is that the worst case scenario is paying equivalent fees without having to trade-off between liquidity and appreciation and the best case scenario is significantly lower fees because you didn't need 100% liquidity.
> Is there any indication that this would be cheaper than just paying the $17M in taxes?
You wrote a lot of words besides the point, and the only thing that is on point is:
> I assume that the math works out
Maybe it does, maybe it doesn't. We don't know. You don't know, and you assuming it does proves nothing and is not a useful argument.
Anyway, I bet at that level of loan the customer has a lot more power; no lender is going to want a billionaire to do their business elsewhere. The human lender who signs the loan gets a promotion for increasing the bank's future-money. And if it goes sour, that human won't lose money. Even the bank doesn't need to worry about its existence if it will be bailed out by the tax payer anyway.
So firstly I use this strategy. I am not anywhere near $300M in net worth but anyone can do this with a few hundred K in stock and a margins account at IBKR.
Anyway, the reason has nothing to do with tax and everything to do with cash. Cash is dangerous. Once you have cash, the value can decline. On the other hand equity in actual companies is always going to have value. Companies like coca cola, Johnson Johnson, etc provide necessary things. They will always have cash flow regardless of how the dollar is doing. Equity is a huge inflation hedge. For me personally I was unaffected by inflation because stock prices inflated as revenues increase anyway. Cash is dangerous.
If you sell equity, it can be difficult to buy back in. Instead it's better to borrow. The equity will eventually go up and you can borrow more. Also, borrowing is instant, whereas selling is volatile as huge dumps of shares can easily manipulate the price on the open market.
Either way, you de-risk not being exposed to equity, which is a valuable store of income. Cash is an extremely dangerous way to store value, in my view, and I'm guessing many of these people.
> First, this type of planning is generally not economically feasible unless the taxpayer has a net worth exceeding around $300M. If you’re worth less than that, you’re not going to be able to command attractive loan/line of credit terms from investment banks. You’re going to have to get a plain vanilla product from a retail lender which is going to have relatively high interest rates (typically the Secured Overnight Financing Rate plus some amount of spread) and other terms that make implementing “buy, borrow, die” expensive enough that you aren’t much better off (or you’re much worse off) than you would have been had you sold the asset and taken the after-tax proceeds. (Caveat: even loans/lines of credit at retail interest rates can still be very useful for short-term borrowing needs.) Clients with a net worth exceeding around $300M, however, can obtain bespoke products from the handful of lenders that specialize in this market, and the terms and conditions of these products make “buy, borrow, die” a no-brainer for virtually everyone who has this level of wealth.
Banks and investment firms are not allowed to loan money out privately for less than the AFS, which is 3.72% right now: https://www.investopedia.com/terms/a/applicablefederalrate.a...
The entire post reads like a LARP.
From the lender's perspective this is a relatively straightforward transaction. A lender will lend to just about anyone if the spreadsheet numbers work out.
There's only so much you can blow on intangibles. Should there be a major write down in the value of the asset, chances are not bad that there are tangibles to reclaim.
But I try to understand why one would give me a loan at loss for them, unless they expect a favor in return
1) All investments are tax deductible, not just 401Ks.
2) The sale of investments is treated as income.
3) Money from loans is also taxed as income, unless used for (1).
Is having fewer investments worthwhile for society?
Unlike a 401k there's no limit to how much he can save paying taxes on it, or any limit on what he can use it on when he spends it. But when investments don't have their cost basis deducted when sold and are rolled in with regular income rather than getting a flat 20% tax.
Any way to bypass this?
For the new, crappier Reddit frontend (which has more dark patterns funneling people to the app): https://reddittorjg6rue252oqsxryoxengawnmo46qy4kyii5wtqnwfj4...
However, the TLS certificates on both have been expired since August 28.
or host a private instance.
It’s the same reason why it’s better to sponsor a “we’ll double your donation up to $X” charity campaign, than to just donate $X directly. It attracts others in with you.
Nobody is going to take a loan provided in the reddit example, since even a minor market fluctuation will trigger a margin call and cause you to lose all your assets used as collateral (and pay taxes on it).
The higher the loan amount, the higher the risks. The longer you have left to live, the higher the risks.
Since you have to commit to this strategy till the end of your life in order for it to work, you're essentially betting that your asset will always appreciate faster than losses accumulate on your compound rate on the loan. Making a bet like that for the rest of your life is quite the gamble (unless you're planning to die in the near future).
This strategy is only viable if you use it for a tiny fraction of your wealth, so it can potentially be used to fund your day-to-day expenses. But it's still a lifelong gamble. What if you happen to die during a market crash?
A owns assets worth of $500M and wants to turn it into cash. Selling it would require him to pay income taxes on past appreciations. So, instead he'll get a loan worth somewhat less than $500M and uses the asset (as is or transferred to a Trust) as a collateral. He wastes the cash from the loan and eventually dies. Now the bank gets the collateral and nobody ever paid a significant amount of taxes.
Is that it?
The general schtick is make tax equal (ie even without buy borrow die, capital gains is taxed lower then income tax). Equalising the two increases the tax take, and frankly seems like “encouraging getting into work”
Anyhow, if we as a society want a fairer society we know how, we just need to overcome the special interests problem
In this case (and cannot see this refuted in the article) I think treat collateralising an asset should be a realisation event. Both parties have come to a free agreement as to the value of the asset - tax the realised gains.
You can actually achieve much the same effect by buying property and taking out a normal mortgage against it for living expenses which can be done by people of more normal means.
First, that interest rates for loans like that are higher than if you have the asset valuation to get loans from lenders that specialize in that kind of thing.
Second, that when you die you're subject to a 40% tax on your estate over your lifetime tax free gift limit, so it makes more sense to use irrevocable trusts to help shelter your estate from that in the event of your death.
I think the piece that's missing (from my scenario and yours) is the assumption that your yearly gains from appreciation of the asset exceed your living expenses. That usually only happens reliably once the asset is worth tens of millions of dollars, at least. Especially if you have a family.
When you say "the rich" don't pay enough, you're essentially saying "don't tax me" then launch into a selfish, ad hominem tirade about how greedy "those" other people are
I read a New Yorker article recently about the Getty Family office, Vallejo Investments, that estimated they control $6 trillion in assets. Trillion! And here we are worrying about the billionaires.
With these kinds of wealth accumulation strategies, and hidden wealth through family offices, these people have more than enough power to control absolutely everything in our societies from the shadows.
"That lucrative maneuvering is the realm of specialized attorneys, accountants, and money managers, many of whom work for family offices: in-house financial teams that typically include a dozen or so full-time attendants. Family offices, which have roots in nineteenth-century operations that served John D. Rockefeller and a handful of his peers, have proliferated in the past two decades, to at least ten thousand worldwide. They tend to have no public presence—Gordon Getty’s family office is known, inconspicuously, as Vallejo Investments—but by some estimates they control about six trillion dollars in assets, a larger sum than is managed by all the world’s hedge funds."
By some estates. Yeah ok. There's absolutely zero actual evidence to suggest the Getty family controls even a hundred billion in assets. No major wealth investigators (Forbes, Bloomberg to name two) in the past three decades has turned up such a large stash by that family.
When this whole "tax unrealized gains" thing first came up I first thought it was absurd...but then I learned how it is abused in ways like this and I have to say I am on board with it if its a way to shut down this loophole.
I think taxing unrealized gains for Joe Schmo sitting on $100K in NVDA isn't going to do any good, but it's also clear there is a real problem here that the ultra wealthy are taking advantage of. I'm not quite sure how you do it fairly, but something has to change.
reddit ranks really well. and now it went viral here and elsewhere = higher ranking
Source: https://www.irs.gov/faqs/interest-dividends-other-types-of-i...
This is just incorrect, at least in the US. The estate does not have to pay capital gains tax for assets passing through to the inheritors.
It's a great policy proposal though - this is one fix for the problem!
That said, I think you may be correcting only the simplified strawman version at the top of the post, while the "actual" version offered at the bottom corrects for this by substituting borrowed cash for the actual asset. That is, I think the version at the top (1A,2A,2C) is intentionally flawed, and represents the popular misconception, while the version at the bottom (1B,2B,3B) corrects for this.
The author might not have chosen a clear format for his argument, but I don't think this is an actual error he is making. I think he addresses this directly in the bottom half of the post. But if you read through the whole thing and still feel he's wrong, I'd certainly like to hear more!
For example, Mark Zuckerberg has a lot of money. So much that he can buy a mega-yacht and it not really affect him financially. But, he could buy lots of things that don't affect him financially, and he chooses not to do so.
I always assumed that acquiring a massively valued asset like a yacht that's assumed to appreciate was part of this "buy, borrow, die" strategy.
Especially not at a rate that pays to keep it shipshape.
That phrasing deserves a pause. If someone has money, it came from somewhere - income - which is taxed. If you play that in reverse: someone who paid no tax had no income, and therefore no money.
Zuckerberg paid 13.7% tax [1]. Ballpark figure income [2,3] for that effective tax rate is $95K/year. You couldn't maintain a yacht on that income, let alone rent or buy one.
[1] https://www.theguardian.com/us-news/2022/apr/13/wealthiest-a... [2] https://smartasset.com/taxes/income-taxes#9S4WHcw5WA [3] https://www.taxact.com/tools/tax-calculator
Also, someone could have received lots of income, say 5 years ago, at which point their income tax would be very high. The following years their income tax might be low if they, e.g., don't sell any stocks or take distributions from various trusts they have set up.
Whether or not that’s actually true is a totally different matter and depends largely on the actually structure of the compensation, but that’s the theory.
https://www.propublica.org/article/the-executive-pay-cap-tha...
Easy peasy. You going to the asset shop and buying there a brand new shiny asset, which will appreciate 8 percent for the next 30-40 years. This is a great plan. Swiss watch.
Does 200M or 750M make any difference to the point ?
If those are equal, this scheme is a terrible idea. You’d be much better off selling some % of the assets and paying LTCG as a fraction of the gains than paying all of the gains in interest.
So now the question is simple: If you can “buy” a risk-free 8%-earning asset, so can your friend the banker. But you can’t. You can buy a risky asset and hope it does better than the interest rate long-term, so your banker doesn’t invoke his rights to a lower yield but safer investment, which involve being able to seize your asset if its price declines.
If the rich could buy a risk-free 8% asset and borrow against its value with a 4% loan, they’d have a perpetual money machine. No such magic exists.
Rate only matters if you still worried about asset growth. At 300M+ net worth you are more worried about securing the wealth for generations to come rather than focusing on growth.
These products are niche for a reason, there are only few with the kind of generational wealth to structure their assets in this way.
The author puts it at 300M+ net worth, I cannot attest to that, but I expect it the costs associated and starting conditions needed of how much of your portfolio is in extremely low risk assets to make this worth while, so only sensible for the ultra rich.
I can receive funds via CashApp at: https://cash.app/$mk2022akmar/