Utterly astounded and dismayed to see this much of HN's audience completely fail to comprehend what they've read here and paint this as some sort of sinister theft.
This is the law functioning as intended. Thiel's case is a one-in-100-million+ event. He may have the only Roth IRA in existence that's valued at over $5 billion. But he didn't do it by exploiting some sort of "loophole" or paying high-priced accountants to shield his assets in foreign entities offshore. He put his investments in a Roth IRA just like any of you can do. The only difference is his investments were in the top 0.0001% in terms of performance. That's generally how people get to be billionaires.
And that's not even to mention that the assets in a Roth IRA are essentially worthless to him - he's not old enough to make withdrawals or take distributions tax-free and you can't borrow against a Roth IRA. The funds are essentially unavailable to him for years to come unless he wants to pay taxes and penalties.
Again - this isn't a tax dodge. This is someone who used the law exactly as intended without any illegal or shady dealings and happened to be incredibly fortunate.
The whole article is a hit piece designed to get whip people into a furor. And lately I've been noticing propublica publishing a lot of those.
I think you're missing the thrust of ProPublica's reporting. This is not an article claiming that laws have been broken. It is pointing out the difference in intent and reality for a part of our financial law. It is not that Thiel is getting huge windfalls from this account now (he is a billionaire, he does not need them), it's that this is another example of a billionaire getting abnormally large absolute benefits from a financial instrument.
The message is not that Thiel has committed some crime, but that he has cleverly and successfully used an instrument designed for the 'middle class' to shelter billions in earnings. The implication is that we should reform these tax vehicles so that the ultra-wealthy cannot use them - not that Thiel is cheating the system as it exists. The lines which talk about contribution limits to Roths are to emphasize that this was not intended to shelter this kind of wealth.
> This is someone who used the law exactly as intended
I 100% agree Thiel has broken no crime and I think you should be *embarrassed* to say that the people who created the Roth intended this. There is no evidence of that. We should recognize that this Roth IRA is sheltering more money than people expected and make (or refrain from making) regulatory changes in response.
It’s pretty disingenuous to say that Thiel’s investments just happened to be “in the top 0.0001%” like he’s some 90s wunderkind. He bought non-public shares for $0.001 per share - a price that no one except a PayPal founder would have access to - years before PayPal went public and then watched it balloon after IPO and onwards. This is not the same thing as the average American making wise investments and to paint it like that is missing the point entirely. I certainly don’t agree that Thiel is “stealing” or being sinister here, but I also don’t see any other comments in this thread purporting he is. It seems the general consensus is this is just another “hack” of the system (purchasing shares of your own company before IPO with a triple tax benefit account) out of reach to 99% of people - which is true.
> This is the law functioning as intended. Thiel's case is a one-in-100-million+ event. He may have the only Roth IRA in existence that's valued at over $5 billion. But he didn't do it by exploiting some sort of "loophole" or paying high-priced accountants to shield his assets in foreign entities offshore. He put his investments in a Roth IRA just like any of you can do. The only difference is his investments were in the top 0.0001% in terms of performance. That's generally how people get to be billionaires.
No. Roth IRA's have contribution limits, and at a minimum I'm sure he exploited some loophole to get his adjusted gross income down below $110,000 so he could make that $2000 contribution in 1999 (https://www.irs.gov/pub/irs-prior/p590--1999.pdf). Look at his work history:
> https://en.wikipedia.org/wiki/Peter_Thiel: He then earned his J.D. from Stanford Law School in 1992.[7] After graduation, he worked as a judicial law clerk for Judge James Larry Edmondson of the U.S. Court of Appeals for the Eleventh Circuit, as a securities lawyer for Sullivan & Cromwell, as a speechwriter for former-U.S. Secretary of Education William Bennett, and as a derivatives trader at Credit Suisse. He founded Thiel Capital Management in 1996. He co-founded PayPal in 1999, serving as chief executive officer until its sale to eBay in 2002 for $1.5 billion.
> Again - this isn't a tax dodge. This is someone who used the law exactly as intended without any illegal or shady dealings and happened to be incredibly fortunate.
To quote Daniel Ellsberg: the scandal isn't that they're breaking the law, the scandal is that what they're doing is legal.
That's not how I read the article at all. Honestly how I read it shows how he was able to abuse the system in ways that weren't intended. It also lays out clear and simple solutions:
- Only let publicly traded stocks/investments be part of an IRA
- Stock grants should be included in the maximal income to determine if someone should be able to contribute to an IRA
Honestly with just these two factors he couldn't have done what he did (implicitly nor anyone else with mega IRAs). The intent of the IRA was for a retirement vehicle for the average person, not as an investment vehicle where you could dodge taxes. You're right that he didn't commit any crimes. But that also doesn't make the thing right. When we find people using edge cases and breaking the intent of the system we say "well played" then patch the framework.
Without commenting on whether this was legal at the time Thiel made this transaction, it appears it would not be permissible under current tax law. (Update: the relevant text in the statute appears to have been in effect as early as 1995: https://uscode.house.gov/view.xhtml?hl=false&edition=1994&re...)
Specifically, the law explicitly disqualifies anyone who is:
>an officer, director (or an individual having powers or responsibilities similar to those of officers or directors), a 10 percent or more shareholder, or a highly compensated employee (earning 10 percent or more of the yearly wages of an employer) of a person described in subparagraph (C), (D), (E), or (G)
What I don't understand about this whole maneuver is that Roth transactions must be made at arms length; ie, "Transactions must be made at arm’s length and not involve the IRA owner or a member of his or her family."
An example of this is that if you use a Roth to invest in property, you are not allowed to use it personally, not allowed to manage it or do maintenance yourself, etc.
Prohibited transactions risk tainting (and thus exposing) the entire account.
How is Thiel investing in his own company not considered a prohibited investment?
I am aware of the fact its popular to dislike the ultra-rich, but is this not worrying to the general public?
ProPublica has obtained a trove of IRS tax return data on thousands of the country’s wealthiest people, covering more than 15 years.
Someone leaked not only Gates, Bezos, Musk, etc data, but thousands of private citizen's intimate financial disclosures (edit: seemingly for the purpose of weaponizing the data against them).
What crime were these thousands of people convicted of to deserve this?
One of the thing that sucks about all these billionaires running end run around the tax system (outside of the obvious pay your fair share) is that they then have a bigger and bigger war chess to splash around. Anyone else who is competing the investment arena has to either play by the same rules or can't compete. It inherently makes more people have to buy into these end-run tax scenarios or risk being left behind. In this case it looks Peter Thiel just went all in on the ROTH IRA beyond what anyone else did.
Its not to dissimilar from the Countrywide CEO saying he was in a forced situation to get into subprime even though he had not interest and though it was a bad investment. If he didn't the board would vote him out. Recognize it is different but its kind of not unless the rules of the game change (which they may be in real time if this propublica billionaire take down works).
What seems most unfair here is how difficult dealing with private equity is as a normal person; the entire purpose of the Roth IRA is that you do not pay any taxes afterwards, and that is how it functions for everyone, whether you are rich or not. On the other hand, the same cannot be said about the ability to purchase, find, and work with private equity. I understand many publications may dislike certain people (as one can note from who they choose to mention the most), but I don't see a reason why he would decline using tax-advantaged accounts just because he has attained significantly larger wealth and roi than most others using them.
> Yet, from the start, a small number of entrepreneurs, like Thiel, made an end run around the rules: Open a Roth with $2,000 or less. Get a sweetheart deal to buy a stake in a startup that has a good chance of one day exploding in value. Pay just fractions of a penny per share, a price low enough to buy huge numbers of shares. Watch as all the gains on that stock — no matter how giant — are shielded from taxes forever, as long as the IRA remains untouched until age 59 and a half. Then use the proceeds, still inside the Roth, to make other investments.
You need a MAGI of less than $139,000 to do that. That includes dividends and capital gains, so it's unlikely post-Paypal Thiel ever made that little. Pre-Paypal Thiel might have.
> Get a sweetheart deal to buy a stake in a startup that has a good chance of one day exploding in value.
This might happen for post-Paypal Thiel. Definitely not pre. This is way easier said than done unless you have good access to deal flow (he does) and founders willing to pay for the privilege of having you as an investor vs. some random VC.
> Pay just fractions of a penny per share
You're not paying fractions of a penny per share for something that has a "good chance of one day exploding in value." This investment doesn't exist.
I'd love to see his specific investments. I have a feeling a handful from a specific time window made up the bulk his his returns.
I also wonder if they can borrow against it. It would seem a pretty low risk loan for a banker to make, and it would allow people to access the money arbitrarily, negating the one downside or limitation. So yet another way that the rich can basically avoid paying any taxes. Does anyone know of any limitations or rules restricting what you can invest the contents of an IRA in? Can you set up a business, sell your IRA shares of the business, then borrow against that value? Basically a foolproof way to avoid paying any taxes ever. The best part is the interest rate just has to be lower than the tax rate, not even the rate of return, right? Incredible. I think Romney was roasted for doing the same thing with his IRA. Seems like any wealthy person could and should be doing this.
I hope a law is passed that hits this kind of behavior with stiff penalties. Thiel isn't the first to do something like this. It is incredibly common. The letter of the law is that annual contributions are capped, and the spirit of that law is that this is done to keep these accounts from becoming tax-free, judgement-proof shelters for insane amounts of wealth.
Perhaps caps on Roth the value of Roth IRAs and a limit of the type of assets held in them to certain bonds and publicly traded stocks. Somewhere between $1MM and $10MM with an annual CPI adjustment is probably a fair cap amount.
IMO the only thing he did "wrong" was to make excellent returns within the bounds of a tax vehicle and with investment classes that most of us are typically excluded (accreditation, VC exclusivity)
If we should be mad about anything it's that it's so difficult for the general public to get a good slice of diversification including the asset classes that turn 1000s into millions.
Yes we can go work at a startup, but that is all the eggs in one basket. Better to spread that risk around 10+ investments like VCs do
I think the fraud to be found here is whether or not the purchases these IRA's made were made at fair value. Given the astronomical rates of return realized by some, not all, of these mammoth IRAs, you can probability establish such facts. Similar to Madoff's eternally steady fund returns being impossible.
A good litmus test would be, what is the rate of return of a person's investments made outside an IRA vs inside the IRA.
I agree. All the annoying animations and hyperbole in the article notwithstanding, it does not seem as malicious as the article tries to portray it. It is rather disappointing that there are barriers to some of these investments but I think without these barriers you would open the gates for all sorts of malicious actors taking advantage of unsophisticated investors.
Capital gains tax is stupid. So is income tax. Why? They both tax changes to wealth. They are damping terms in the system. They actually slow down change. I thought Social Change is what you wanted?
Instead, there should be a WEALTH tax, with a rate slightly exceeding historical returns to capital (say 15%), and with a standard deduction of at least $5M. The purpose of income reporting would then be to influence the tax agency's estimate of your cumulative wealth.
Capital gains tax perverts incentives: It tells people to hold on to investments, even if they now think those investments are crap, even if they would rather now allocate their capital in some other way. This is one of the reasons why ETFs are a thing, and one reason why zombie companies continue to shamble on. Roths are the only accounts WITHOUT this feature.
And income tax hurts people who actually work for their money. Really rich people -- do people think some boss gives them a SALARY? That's not how it works: They live off investment income. Capital gains and dividends. Both of which are taxed less than regular income.
This wealth tax would directly stabilize the system towards a state in which everyone had $5M. There are other forces at play as well, so we wouldn't end up at that equilibrium, but we'd move closer to it.
Basically, if you want to change the rules of Monopoly so the game ends with EVERYONE owning some hotels, this is how you do it.
But you cannot, cannot set the deduction too low. People depend on investments for their retirement. You can't destroy that.
...
Now I back off from my confident-sounding rhetoric. Is this actually true? What effects would this have on investment and corporate governance? Would it create a giant market for cryptocurrency? For perk-based compensation? I'm curious what second-order effects I have overlooked.
I do this with my 401ks and IRAs and Roth products too and unlike my non-profit entities in the 501 tax section the big trouble with the 400 tax section is that you cant do in-kind contributions
So you cant contribute assets you have to contribute cash and then buy the assets, whereas with nonprofits you can also contribute assets directly
This is just a small administrative hurdle, when you have contractual authority over an organization you can write options agreements and other grants that your 400 section tax deferred entity can afford. Self directed 400 section entities are typically formed as trusts, so it is easy to interact with them as distinct investors even if you are signing both sides of every contract.
I think its funny in the article where the person quoted said they were “in favor of change” to the tax code. Add in kind contribution to tax deferred products like 401ks and IRAs!
The lawmakers are quite literally the same people who advise rich people on taxes.
The funniest thing I ever saw was an African civil servant who had gone private now telling foreign companies how to fuck the government he used to work for.
The fact that someone used a vehicle that limits your yearly contribution to $5500 a year to amass $5 billion is worth investigating. The investment return needed for that is close to 60% annually, an inconceivably high rate of return for any long period of time.
> "Person uses retirement account to save money for retirement."
... with a few extra "twists" that utterly subvert the intention of the Roth IRA, making it possible to accumulate an astronomical dynastic fortune without having to pay taxes on it like normal people.
Thats where I got the inspiration from for thinking about a lot of accounting differently. Financial engineering that people seem to neglect or be to scared of considering.
With him sometimes Bain Capital made separate share classes, and I think they would give massive dividends periodically to the separate share class that only the 401k investors at Bain Capital would receive. I think its a really great strategy!
Buffett should be doing that in Berkshire Hathaway for their employees instead of being sad about how much tax his secretary pays
> That January, The Wall Street Journal reported that Mitt Romney, the former private equity executive running for the GOP nomination, had listed on a financial disclosure form that he had amassed an IRA worth between $20 million and $102 million. The story ran on the front page and launched waves of coverage in other publications. Romney had a traditional IRA, not a Roth. But how, people wondered, could the account have grown so large, given that the government imposed strict limits on how much money could be put into one of the tax-deferred accounts?
> Citing former company insiders and documents, the Journal reported that during Romney’s time as CEO at investment giant Bain Capital, executives there had effectively bypassed the contribution limits by putting extremely low-valued shares from private equity deals into their IRAs, then watching them balloon.
Am I missing something? He didn’t seem to do anything illegal.
This is the second article from ProPublica which:
- accuses people of doing something that is perfectly legal
- singles out one or two such people and exposes their private matters
Is that ok just because they are rich? There is another comment thread going on right now where people are absolutely furious that they are tracked for targeted ads. How would they feel if their tax info was displayed online for all to see?
There is an argument whether investing in securities that are non-public and have no official price (especially ones you have a controlling stake in) should be illegal (even if it isn't right now).
I think that's what the article is about. If he contributed $5000, bought bitcoin at 1 cent and had the same amount of money now, it would be a non-issue.
How has all this information form the IRS leaked? ProPublica seems to have accessed many of the richest American's tax data. Is this something one person could do? How many people have that kind of access?
I am sweating here the fact that I am making more than is allowed in order to contribute. Fidelity lets me, so I do, but someone like Thiel, of course, can find ways.
How in the f*k do you invest into startups with something that is not publicly traded anyway? Was PayPal over the counter? Why was it so cheap?
Anyone actually done this with normal stock options (NSO if it matters) and have advice? My understanding is that it might be achievable with Pensco as the IRA custodian but I'd be interested in hearing how it worked in practice
I’ve done it, you have to have executive authority over the issuing company to do it, as other directors and their legal counsel are too uninspired to do anything outside of the norm.
Your IRA is a legal entity and you can grant an option to it. It needs the cash to exercise it. Options can have shares at any price in them, such as discounted to nothing but it comes down to which consequences you care about. Making a potentially screwy 409a valuation isn't a big deal, but also avoided if done before other investors come in. Either way it can be a tolerable level of consequence.
[+] [-] maxk42|4 years ago|reply
This is the law functioning as intended. Thiel's case is a one-in-100-million+ event. He may have the only Roth IRA in existence that's valued at over $5 billion. But he didn't do it by exploiting some sort of "loophole" or paying high-priced accountants to shield his assets in foreign entities offshore. He put his investments in a Roth IRA just like any of you can do. The only difference is his investments were in the top 0.0001% in terms of performance. That's generally how people get to be billionaires.
And that's not even to mention that the assets in a Roth IRA are essentially worthless to him - he's not old enough to make withdrawals or take distributions tax-free and you can't borrow against a Roth IRA. The funds are essentially unavailable to him for years to come unless he wants to pay taxes and penalties.
Again - this isn't a tax dodge. This is someone who used the law exactly as intended without any illegal or shady dealings and happened to be incredibly fortunate.
The whole article is a hit piece designed to get whip people into a furor. And lately I've been noticing propublica publishing a lot of those.
[+] [-] aeturnum|4 years ago|reply
The message is not that Thiel has committed some crime, but that he has cleverly and successfully used an instrument designed for the 'middle class' to shelter billions in earnings. The implication is that we should reform these tax vehicles so that the ultra-wealthy cannot use them - not that Thiel is cheating the system as it exists. The lines which talk about contribution limits to Roths are to emphasize that this was not intended to shelter this kind of wealth.
> This is someone who used the law exactly as intended
I 100% agree Thiel has broken no crime and I think you should be *embarrassed* to say that the people who created the Roth intended this. There is no evidence of that. We should recognize that this Roth IRA is sheltering more money than people expected and make (or refrain from making) regulatory changes in response.
[+] [-] uncomputation|4 years ago|reply
[+] [-] tablespoon|4 years ago|reply
No. Roth IRA's have contribution limits, and at a minimum I'm sure he exploited some loophole to get his adjusted gross income down below $110,000 so he could make that $2000 contribution in 1999 (https://www.irs.gov/pub/irs-prior/p590--1999.pdf). Look at his work history:
> https://en.wikipedia.org/wiki/Peter_Thiel: He then earned his J.D. from Stanford Law School in 1992.[7] After graduation, he worked as a judicial law clerk for Judge James Larry Edmondson of the U.S. Court of Appeals for the Eleventh Circuit, as a securities lawyer for Sullivan & Cromwell, as a speechwriter for former-U.S. Secretary of Education William Bennett, and as a derivatives trader at Credit Suisse. He founded Thiel Capital Management in 1996. He co-founded PayPal in 1999, serving as chief executive officer until its sale to eBay in 2002 for $1.5 billion.
[+] [-] 1-more|4 years ago|reply
To quote Daniel Ellsberg: the scandal isn't that they're breaking the law, the scandal is that what they're doing is legal.
[+] [-] sida|4 years ago|reply
The "theft" here is the undervaluation of the shares with which he purchased at
[+] [-] godelski|4 years ago|reply
- Only let publicly traded stocks/investments be part of an IRA
- Stock grants should be included in the maximal income to determine if someone should be able to contribute to an IRA
Honestly with just these two factors he couldn't have done what he did (implicitly nor anyone else with mega IRAs). The intent of the IRA was for a retirement vehicle for the average person, not as an investment vehicle where you could dodge taxes. You're right that he didn't commit any crimes. But that also doesn't make the thing right. When we find people using edge cases and breaking the intent of the system we say "well played" then patch the framework.
This is a tax dodge, just a legal one.
[+] [-] runako|4 years ago|reply
Without commenting on whether this was legal at the time Thiel made this transaction, it appears it would not be permissible under current tax law. (Update: the relevant text in the statute appears to have been in effect as early as 1995: https://uscode.house.gov/view.xhtml?hl=false&edition=1994&re...) Specifically, the law explicitly disqualifies anyone who is:
>an officer, director (or an individual having powers or responsibilities similar to those of officers or directors), a 10 percent or more shareholder, or a highly compensated employee (earning 10 percent or more of the yearly wages of an employer) of a person described in subparagraph (C), (D), (E), or (G)
(Source: https://www.law.cornell.edu/uscode/text/26/4975)
So the relatively plain language would almost certainly include anyone who's a co-founder involved in actively managing a company today.
This kind of blatant tax avoidance is going to end badly for our tax regime, which is likely to overcorrect.
[+] [-] nrmitchi|4 years ago|reply
An example of this is that if you use a Roth to invest in property, you are not allowed to use it personally, not allowed to manage it or do maintenance yourself, etc.
Prohibited transactions risk tainting (and thus exposing) the entire account.
How is Thiel investing in his own company not considered a prohibited investment?
[+] [-] cdolan|4 years ago|reply
What crime were these thousands of people convicted of to deserve this?
[+] [-] boringg|4 years ago|reply
Its not to dissimilar from the Countrywide CEO saying he was in a forced situation to get into subprime even though he had not interest and though it was a bad investment. If he didn't the board would vote him out. Recognize it is different but its kind of not unless the rules of the game change (which they may be in real time if this propublica billionaire take down works).
[+] [-] ve55|4 years ago|reply
[+] [-] throw0101a|4 years ago|reply
> Yet, from the start, a small number of entrepreneurs, like Thiel, made an end run around the rules: Open a Roth with $2,000 or less. Get a sweetheart deal to buy a stake in a startup that has a good chance of one day exploding in value. Pay just fractions of a penny per share, a price low enough to buy huge numbers of shares. Watch as all the gains on that stock — no matter how giant — are shielded from taxes forever, as long as the IRA remains untouched until age 59 and a half. Then use the proceeds, still inside the Roth, to make other investments.
[+] [-] dehrmann|4 years ago|reply
You need a MAGI of less than $139,000 to do that. That includes dividends and capital gains, so it's unlikely post-Paypal Thiel ever made that little. Pre-Paypal Thiel might have.
> Get a sweetheart deal to buy a stake in a startup that has a good chance of one day exploding in value.
This might happen for post-Paypal Thiel. Definitely not pre. This is way easier said than done unless you have good access to deal flow (he does) and founders willing to pay for the privilege of having you as an investor vs. some random VC.
> Pay just fractions of a penny per share
You're not paying fractions of a penny per share for something that has a "good chance of one day exploding in value." This investment doesn't exist.
I'd love to see his specific investments. I have a feeling a handful from a specific time window made up the bulk his his returns.
[+] [-] patentatt|4 years ago|reply
[+] [-] mywittyname|4 years ago|reply
Perhaps caps on Roth the value of Roth IRAs and a limit of the type of assets held in them to certain bonds and publicly traded stocks. Somewhere between $1MM and $10MM with an annual CPI adjustment is probably a fair cap amount.
[+] [-] nickpp|4 years ago|reply
Sounds easy and straightforward.
[+] [-] prezjordan|4 years ago|reply
[+] [-] gumby|4 years ago|reply
I guess that's what I get for following the rules.
Not that my IRA would have reached the billions mark if I had managed to.
[+] [-] maerF0x0|4 years ago|reply
If we should be mad about anything it's that it's so difficult for the general public to get a good slice of diversification including the asset classes that turn 1000s into millions.
Yes we can go work at a startup, but that is all the eggs in one basket. Better to spread that risk around 10+ investments like VCs do
[+] [-] jgalt212|4 years ago|reply
A good litmus test would be, what is the rate of return of a person's investments made outside an IRA vs inside the IRA.
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] r00fus|4 years ago|reply
What he did wasn't actually legal. He just got away with it.
[+] [-] rajup|4 years ago|reply
[+] [-] FooBarBizBazz|4 years ago|reply
Instead, there should be a WEALTH tax, with a rate slightly exceeding historical returns to capital (say 15%), and with a standard deduction of at least $5M. The purpose of income reporting would then be to influence the tax agency's estimate of your cumulative wealth.
Capital gains tax perverts incentives: It tells people to hold on to investments, even if they now think those investments are crap, even if they would rather now allocate their capital in some other way. This is one of the reasons why ETFs are a thing, and one reason why zombie companies continue to shamble on. Roths are the only accounts WITHOUT this feature.
And income tax hurts people who actually work for their money. Really rich people -- do people think some boss gives them a SALARY? That's not how it works: They live off investment income. Capital gains and dividends. Both of which are taxed less than regular income.
This wealth tax would directly stabilize the system towards a state in which everyone had $5M. There are other forces at play as well, so we wouldn't end up at that equilibrium, but we'd move closer to it.
Basically, if you want to change the rules of Monopoly so the game ends with EVERYONE owning some hotels, this is how you do it.
But you cannot, cannot set the deduction too low. People depend on investments for their retirement. You can't destroy that.
...
Now I back off from my confident-sounding rhetoric. Is this actually true? What effects would this have on investment and corporate governance? Would it create a giant market for cryptocurrency? For perk-based compensation? I'm curious what second-order effects I have overlooked.
[+] [-] vmception|4 years ago|reply
So you cant contribute assets you have to contribute cash and then buy the assets, whereas with nonprofits you can also contribute assets directly
This is just a small administrative hurdle, when you have contractual authority over an organization you can write options agreements and other grants that your 400 section tax deferred entity can afford. Self directed 400 section entities are typically formed as trusts, so it is easy to interact with them as distinct investors even if you are signing both sides of every contract.
I think its funny in the article where the person quoted said they were “in favor of change” to the tax code. Add in kind contribution to tax deferred products like 401ks and IRAs!
[+] [-] m_ke|4 years ago|reply
[+] [-] breck|4 years ago|reply
That being said, ultimately lawmakers are at fault.
We need to start thinking of law as code. We want to minimize the complexity of law, just like you want to minimize the complexity of code.
I have a new way to do that:
https://github.com/treenotation/research/blob/master/papers/...
2D Languages will be the future of the law and democracy.
[+] [-] MomoXenosaga|4 years ago|reply
The funniest thing I ever saw was an African civil servant who had gone private now telling foreign companies how to fuck the government he used to work for.
[+] [-] quickthrower2|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] vmception|4 years ago|reply
They really prey on ignorance
[+] [-] w0mbat|4 years ago|reply
[+] [-] _jal|4 years ago|reply
[+] [-] xkjkls|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] crispyambulance|4 years ago|reply
... with a few extra "twists" that utterly subvert the intention of the Roth IRA, making it possible to accumulate an astronomical dynastic fortune without having to pay taxes on it like normal people.
[+] [-] sushid|4 years ago|reply
No one is claiming Thiel did anything illegal. But it does seem a bit preposterous that billionaires can amass $5B Roth IRA accounts.
[+] [-] shanecleveland|4 years ago|reply
[+] [-] JacobDotVI|4 years ago|reply
[+] [-] vmception|4 years ago|reply
With him sometimes Bain Capital made separate share classes, and I think they would give massive dividends periodically to the separate share class that only the 401k investors at Bain Capital would receive. I think its a really great strategy!
Buffett should be doing that in Berkshire Hathaway for their employees instead of being sad about how much tax his secretary pays
[+] [-] jrochkind1|4 years ago|reply
> That January, The Wall Street Journal reported that Mitt Romney, the former private equity executive running for the GOP nomination, had listed on a financial disclosure form that he had amassed an IRA worth between $20 million and $102 million. The story ran on the front page and launched waves of coverage in other publications. Romney had a traditional IRA, not a Roth. But how, people wondered, could the account have grown so large, given that the government imposed strict limits on how much money could be put into one of the tax-deferred accounts?
> Citing former company insiders and documents, the Journal reported that during Romney’s time as CEO at investment giant Bain Capital, executives there had effectively bypassed the contribution limits by putting extremely low-valued shares from private equity deals into their IRAs, then watching them balloon.
[+] [-] nickpp|4 years ago|reply
This is the second article from ProPublica which:
- accuses people of doing something that is perfectly legal
- singles out one or two such people and exposes their private matters
Is that ok just because they are rich? There is another comment thread going on right now where people are absolutely furious that they are tracked for targeted ads. How would they feel if their tax info was displayed online for all to see?
[+] [-] medvezhenok|4 years ago|reply
I think that's what the article is about. If he contributed $5000, bought bitcoin at 1 cent and had the same amount of money now, it would be a non-issue.
[+] [-] ffggvv|4 years ago|reply
[+] [-] NonEUCitizen|4 years ago|reply
[+] [-] pjfin123|4 years ago|reply
[+] [-] papito|4 years ago|reply
How in the f*k do you invest into startups with something that is not publicly traded anyway? Was PayPal over the counter? Why was it so cheap?
[+] [-] joshe|4 years ago|reply
[+] [-] vmception|4 years ago|reply
Your IRA is a legal entity and you can grant an option to it. It needs the cash to exercise it. Options can have shares at any price in them, such as discounted to nothing but it comes down to which consequences you care about. Making a potentially screwy 409a valuation isn't a big deal, but also avoided if done before other investors come in. Either way it can be a tolerable level of consequence.