Just want to point out that this was all possible because of the hard work of people at the icij. They do amazing work (same group that did the Panama papers and one of the last real independent investigative news organizations in the US) and deserve your support!
As an aside, I would also ask this question: why not democratize this and make billions using the same loopholes so that everyone gains access or they are forced to fix it? Surely it’s a good startup opportunity.
The way I understand these schemes is that they require minimum balance way above what an average person has to be effective, but not sure. Would love a professional tax engineer/CPA opinion.
There was a documentary on Dutch TV a couple of years ago, about 'DYI tax haven management' for common people. Can't remember which public channel it was on, and what the name was. Might have been part of "Tegenlicht" series.
Update: Maybe it was the program Rambam where the makers set up their own tax haven based on the methods of the big corporations. Information in Dutch:
it's weird when Americans day dream of giving tax breaks to billionaires because they might be rich one day; it's a another thing for people who ostensibly have the best social system in the world looking at America and say "we should do that".
There are plans for making mortgages more expensive by removing tax deductions and for taxing inheritance a whopping 75%. That is hardly giving tax breaks to billionaire, more so screwing over anyone who isn't dirt poor. Oh, and I'm already paying pretty much half my income in various taxes.
Anyone who has a significant amount of money can avoid these taxes, as always.
The problem with inheritance tax is that the person pays taxes all through their lifetime and then when their significant others inherit that wealth (which already has been taxed once at least) it gets taxed again. The issue isn't the amount, the issue is the principle of it.
I suspect BTW the very rich won't ever pay these taxes as there are always ways to restructure the wealth or simply move it elsewhere. I know this is done in the UK. So what it does is punish the middle classes the most.
> The problem with inheritance tax is that the person pays taxes all through their lifetime and then when their significant others inherit that wealth (which already has been taxed once at least) it gets taxed again.
Yes, because that's a transfer to different people. That's not a problem.
The problem is that it's not just treated as income to the recipients—which it manifestly is—with the income tax then being modified to include both advance recognition and windfall spreading options to allow taxpayers to deal with irregular income in a fair basis with more regular income.
This is also the problem with capital gains tax. And its not th people who have the kind of income that avoids regular income taxation that are getting screwed by that.
> Yes, because that's a transfer to different people. That's not a problem
Sorry I don't agree. The tax has already been paid when the person was alive. There shouldn't be a an additional tax on top because it is given to others after they died. Which is what is happening.
> The problem is that it's not just treated as income to the recipients—which it manifestly is—with the income tax then being modified to include both advance recognition and windfall spreading options to allow taxpayers to deal with irregular income in a fair basis with more regular income.
The problem wouldn't exist if the tax was abolished.
> This is also the problem with capital gains tax. And its not the people who have the kind of income that avoids regular income taxation that are getting screwed by that.
Again another case of a problem that wouldn't exist if the tax (capital gains) was abolished.
Tax is a means to an end (paying for civil services). Whether or not something is taxed twice is not inherently wrong, it's just a choice on how we choose to pursue our needs in a way that is effective and equitable.
I mean, reductively, saying something can't be taxed twice doesn't make any sense because all taxes work like that. A company sells products, those sales (and/or value add) are taxed. That money is paid as income, then that income is taxed. That income is spent on goods or services, where the sale (and/or value add) is taxed. Ad infinitum.
A reasonable tax on inheritance, growing with wealth, makes sense in a society that has no effective wealth caps. Otherwise the "haves" accumulate wealth, which accumulates wealth, which accumulates wealth. By imposing a tax on wealth that is not earned, but entirely dependent on the circumstances of one's birth, you create a redistribution scheme that's... Quite fair?
No living person has their labor stolen, some redistribution is achieved, but the heir still receives a significant benefit.
> Tax is a means to an end (paying for civil services). Whether or not something is taxed twice is not inherently wrong, it's just a choice on how we choose to pursue our needs in a way that is effective and equitable.
Well in the UK, the civil services are crap, the police don't do anything, the NHS waiting times are extensive (my mother is waiting for over 2 years for knee surgery), the roads are full of pot holes, and we have more admirals than warships.
So the money doesn't seem to be used effectively. I don't know what you mean by equitable.
> I mean, reductively, saying something can't be taxed twice doesn't make any sense because all taxes work like that. A company sells products, those sales (and/or value add) are taxed. That money is paid as income, then that income is taxed. That income is spent on goods or services, where the sale (and/or value add) is taxed. Ad infinitum.
It almost like the tax man takes at every opportunity. Describing that they tax you many times isn't a justification for more taxes.
> A reasonable tax on inheritance, growing with wealth, makes sense in a society that has no effective wealth caps. Otherwise the "haves" accumulate wealth, which accumulates wealth, which accumulates wealth.
I don't think it is moral or fair to tax beneficiaries of inheritance. It is essentially a gift from the deceased to the beneficiaries.
That the entire point of building up an inheritance for your family/beneficiaries, is that you hope to leave your children better place. I don't know what is fundamentally wrong with building up wealth generationally.
> By imposing a tax on wealth that is not earned, but entirely dependent on the circumstances of one's birth, you create a redistribution scheme that's... Quite fair?
No it isn't fair. The wealth was earned at some point in time, presumably legally. I don't understand why it matters that the person receiving it may have done nothing more than been a family member, family friend or even someone/some organisation that the deceased thought was deserving? When they were alive it was their choice who would receive upon death.
> So the money doesn't seem to be used effectively.
That's not what we're discussing. Nor is it even the country we're discussing? The Netherlands has the second highest quality of life in the world.
> It almost like the tax man takes at every opportunity.
Taxes are a requirement of any functional nation. This just sounds like you have no intention of having a real discussion on tax policy.
> It is essentially a gift from the deceased to the beneficiaries.
Yes, that is what inheritance is. And gifts are taxed. At a higher rate than inheritance!
> I don't know what is fundamentally wrong with building up wealth generationally.
Oh, please, don't straw man me.
Nothing is wrong with generational wealth. Looking at the US, you can see how important it is for social mobility, directly affecting the outcomes of minority communities for decades to even centuries. And through systems like the private healthcare and nursing industries, how it's being targeted to extract every last cent out of American citizens before they die and can hand it off to their loved ones.
But are you seriously pretending you don't know what's wrong with a forever growing wealth inequality? Because inheritance taxes only meaningfully apply to the wealthy. We aren't talking working class folk here.
Are we supposed to wonder how will they ever survive on a mere €820.000 that they did nothing to earn? Despite the fact that being raised by someone with that kind of wealth statistically implies that they'll also be inheriting things like property. And that they will have a more stable upbringing with a better education and opportunities their working class peers would never get.
Most of the money circulating in the economy has been taxed many many times. The money your employer pays you has been taxed, the money that employer got from its customers was taxed, the money those customers used was their salary, which was taxed. That is such a stupid argument to make. It would mean that we should only have one tax at the root of money itself.
What? I'm talking about the netherlands, like is extremely obvious from the context. Read the thread you are replying to...
And I said politicians are talking about changing the laws. There are upcoming elections. Why are you talking about the current laws? Completely irrelevant. I very clearly said:
> There are plans for making mortgages more expensive by removing tax deductions and for taxing inheritance a whopping 75%
I describe the law of and linked to a government website of the Netherlands.
> And I said politicians are talking about changing the laws.
No, you said "there are plans". What you did not say is that one party leader made an insane comment in a campaign cycle met with so much backlash it took less than a day to radically change to "with 0% under €500.000" and has still been unilaterally mocked by opinion makers, politicians, and media.
Buddy, I'm dutch. I am following local politics, and clearly, you're not.
> I describe the law of and linked to a government website of the Netherlands.
No shit? How is the current law relevant to plans to change it?
> What you did not say is that one party leader made an insane comment in a campaign cycle met with so much backlash it took less than a day to radically change to "with 0% under €500.000" and has still been unilaterally mocked by opinion makers, politicians, and media.
Yeah, so he's planning it. For now they seem to have changed their campaign surrounding the subject but there's no saying what they'll do if elected.
Buddy, that's not really was "there are plans to" means. Unless you count MJT talking about Jewish space lasers "plans to" investigate Jewish space lasers from the US government. In which case, you've got a tabloid-level definition.
The quote of the current law is used to emphasize just how ridiculous sounding what you're saying even is.
This is exactly what I mean in my first comment, you clearly aren't here in good faith. Or will you say, straight-faced, that you genuinely believe that the government is actually going to be implementing this?
No. Anyone can register a LLC in any of these places. They have minimal filing requirements going forward too.
You may be required to have a local agent, and they will add their address and names as the nominee shareholders so you remain anonymous. Then with an LLC, the company can open bank accounts and you can move money. Any money made offshore is non-taxed locally.
There are 2 major reasons why people choose to use layers of corporations in other countries: tax minimization (in their domestic country) and obscurity of the assets-owners relationship.
The latter is used by corrupt politicians, oligarchs (extremely wealthy people who have massive influence on policy/politics), and to stifle investigations by civil investigations (divorce), to stifle criminal investigations (political corruption, sanctions avoidance, fences for thieves, a convenient vehicle for transactions or large assets so governments/ oversight can’t easily track them).
There is a minimum overhead required (you need at least a part time CPA and attorney to give you the strategy, more if they actually implement it), but I don’t think it requires you be ultra wealthy. The problem is that most law-abiding, non-sociopath people don’t benefit much from avoiding the law.
Isn't the icij "just" a network of people already doing investigative journalism who work on this stuff anyway? As in it's just a place where investigative journalists can meet/discuss investigations that cross borders? My impression were that they were just normal journalists and that groups then formed and disbanded based on interest within this network.
I certainly love their work, and I think a network like that is very important (we should probably have something similar for software developers/IT people across Europe), calling them a group seems wrong with my understanding though.
It's not one or the other, it's both. They both do original reporting on their own and act as a loose network of smaller investigative journalism organizations. It truly depends on the task at hand, but it's usually very useful to get some of the local investigative journalists involved, as they're the ones that both understand the language and are able to put the leaked data into context. Usually ICIJ is the one that publishes the English version of the story and their local partner(s) publish the same thing in the local language.
Actually, I'd say there's three such networks: ICIJ, GIJN and OCCRP. They're not really competitors, each serving slightly different purposes, and there's plenty of collaboration and overlap between their members.
Source: I'm not in that world anymore, but I knew about Panama Papers long before it was public and have my name in the credits in some of the collaborations with ICIJ.
True, but they also tend to be papers that can't consistently rely on advertising, precisely because of their investigations (publishing the deeds of corporate billionaires is a great way to not get ads placed for whatever the billionaire sells.)
So, at least subscribe to one of the papers !
(I know, sorry HN, I asked people to pay for a service that could be financed by ads to gather more data - aka more food for the algo. Sorry.)
I'm thinking something much more boring than that. Basically I think we could have a conference where a participant could share some problem they are having that they believe generalizes across other participants (maybe some regulatory reporting requirement, or maybe some question about implementing AI in sharepoint or whatever) and the other participants could then sign up for further discussion and participation in creating some software systems that would solve the problem.
I'm thinking something akin to FRONTEX JAD's or that conference the EU has where lawyers show up to discuss cases they need EU assistance with.
Concretely, my company recently did a migration into Azure, if we were at a meeting like that and somebody said they were planning to do the same, we would have a bunch of experience to share with them.
I imagine that could maybe help foster some shared European understanding about what our big tech problems are. Maybe we could even let the solutions end up as open source or something.
To be honest, making a business out of this might be the best way to convince regulators to close the loopholes. You could even devote N% of the revenue to closing the loopholes. There’s DEFINITELY a large moral hazard though, it would be very easy to lose your soul, or to be kicked out by the board in favor of a more malleable leader :/
Edit: after reading the article, I realize most of the “loopholes” to be changes are in disparate countries, not the _source_ country. This makes the whole idea less attractive. I suppose you could potentially still get rid of the anonymous-representative option by which people conceal their connection to different assets.
Technically, if the VC and the startup is located in the blacklisted country i don't see why not. Basically we will start the torrent site like DNS witch hunt, but still possible. I assume the "elites" would not be too happy and do everything in their power to stop it?
More info here: https://www.icij.org/
As an aside, I would also ask this question: why not democratize this and make billions using the same loopholes so that everyone gains access or they are forced to fix it? Surely it’s a good startup opportunity.