[HN Gopher] How Billionaire Robert Smith Avoided Indictment in M...
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How Billionaire Robert Smith Avoided Indictment in Multimillion-
Dollar Tax Case
Author : cwwc
Score : 125 points
Date : 2021-02-03 15:07 UTC (7 hours ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| f430 wrote:
| I don't get it. If you want the same privileges that Billionaires
| have then you should work on becoming a billionaire not
| complaining because nothing will change.
|
| It doesn't make sense for Billionaires to be taxed as it would
| lead to poor capital distribution in the economy.
|
| I'm all for philanthropy but there is also no law that says
| Billionaires should give just because they are a Billionaire.
| hellotomyrars wrote:
| Right. It's so easy to work to become a billionaire and it's
| not like most of them are born into generational wealth (They
| didn't have to work for it).
|
| It turns out maybe we can work to make change while not also
| becoming billionaires. Most people don't need to be
| billionaires. But everybody needs Food/Housing/Healthcare.
|
| `There is no law`. Well, there are laws. And they do require
| them to be taxed. And historically their taxes were much
| higher. But Reagan sold the Trickle Down economics story to the
| nation, and now they pay dramatically less.
| f430 wrote:
| 55.8% are self-made. Sure, many come from already middle to
| upper class which gives them room to fail. Still, a good
| chunk of them started with nothing.
|
| Nobody thinks its easy to become a billionaire but they
| shouldn't be treated like everybody else. The wealth they
| command is wll beyond what most private citizens have at
| their disposal.
|
| We are also missing out the mid to high 9-digit millionaires
| who also should be exempt from the asinine taxation policy
| that is meant to enforce serfdom.
|
| The law is not for the hyper rich ($600MM in assets), they
| operate under a completely different law that our system is
| designed to protect.
|
| This is good for efficient capital trickle down effect. We
| simply cannot be putting ceilings on incentives. It needs to
| be unlimited and it won't even register in the global
| economy.
|
| Just because you can't tax billionaires don't mean citizens
| and the government is getting stiffed. This is exactly what
| the poor man thinks they think that because they are poor
| everybody else should be poor and taxed too.
|
| Or did you think USSR had a good trickle down effect?
| Venezuela? France?
| hellotomyrars wrote:
| I don't know why you're so interested in defending the
| extreme privilege of people who have more money that you
| and the next thousand people you will meet several times
| over but enjoy it.
|
| I don't understand why people feel such a need to defend
| and worship those who have the most in our society while
| there are people who die from starvation/exposure/lack of
| healthcare in what is allegedly the greatest country on
| earth.
| TrackerFF wrote:
| Ludicrous. Laws are not about privilege - laws should be equal
| for everyone.
|
| If there's one thing China got right, it's that they'll throw
| your ass in jail, whether you're worth a dollar, or hundreds of
| millions of dollar - if you can't do the time, don't do the
| crime. Easy as that.
| vmception wrote:
| This is very fascinating!
|
| He tried amending his tax returns to correct the reporting
| issues.
|
| He tried to use amnesty program on undeclared Swiss banking back
| in the early 2010s when the US was piercing the Swiss
| Constitution, and was denied!
|
| And this all started because divorce proceedings listed many
| assets. Eventually ensnaring a completely unrelated person in
| actual jail.
|
| Wow.
|
| For all intents and purposes it seems like they were overly
| focused on Smith, until some of the hobnobbing with the
| administration started to pay off.
| mattficke wrote:
| This is a systemic problem with tax enforcement in the US in
| recent years, caused in part by reduced funding for the IRS.
| Wealthy people can afford expensive legal defenses, which makes
| it more expensive for the IRS to pursue these cases, so they
| focus instead on easy to win cases against low income people.
|
| > _According to data released by the IRS last week, millionaires
| in 2018 were about 80% less likely to be audited than they were
| in 2011._
|
| _Audits of the rich continue to plunge while those of the poor
| hold steady, and the two audit rates are converging. Last year,
| the top 1% of taxpayers by income were audited at a rate of
| 1.56%. EITC recipients, who typically have annual income under
| $20,000, were audited at 1.41%._ [1]
|
| [1] https://www.propublica.org/article/irs-now-audits-poor-
| ameri...
| vmception wrote:
| This has nothing to do with that
| yardie wrote:
| Partly, the tax prosecutor had a solid case but in Barr's
| mind there was a chance of failure. And the incestuous
| relationship of private and federal lawyers didn't help.
| Barr's former colleagues were sitting the otherside of the
| meeting table.
|
| Do you think the typical construction contractor or engineer
| has anything near that? They'd be prosecuted, found guilty,
| and offered some sort of reduced or delayed sentencing.
| vmception wrote:
| IRS budget cuts had nothing to do with an intense decade
| long focus on Smith and Vista because they actually were
| investigating.
|
| The DOJ has nothing to do with IRS budget cuts.
|
| I'm not responding to what you are saying, I am responding
| to which agencies and budgets are being referred to.
|
| There are plenty of _other_ comments in this thread for you
| to make your particular point on.
| drummer wrote:
| Imagine getting punished by a robber for trying to evade getting
| robbed by him. That is basically what happens with "tax evasion".
| And the IRS are the robbers.
| thoughtstheseus wrote:
| The national security issue is surprising... I'm curious what it
| was. Vista is really more of a large tech conglomerate so they're
| in lots of business lines.
| hogFeast wrote:
| That was very surprising. If I buy shares in Lockheed Martin,
| can I claim "national security" too.
|
| It is a very powerful and opaque defence. Companies use it all
| the time too to avoid anti-trust action (AT&T did so for
| decades). Using it in the case of a private equity fund manager
| seems a stretch..
| thoughtstheseus wrote:
| Especially when this is a "personal tax matter" and not
| related to Vista. Strains credibility somewhere.
| mistrial9 wrote:
| I see this as a cynical mass-media emphasis on an individual tax
| case, while a multi-national corporate tax-evasion party
| continues larger than ever. -- As a US citizen with some decades
| behind me, I can say that the US has lost balance with taxes
| badly. On the one hand there are "illegal" laborers with no
| working benefits and little protection, paying who-knows-what for
| tax; secondly, in the 90s, international money transfer by
| corporations ran rampant for tax evasion. The Clinton's became
| super-powers on Wall Street for turning a blind eye to it, and
| later the Ms. of the family became essentially the official
| enabler of this with the US State Department Foriegn Aid office
| ($8 billion a year slush fund, on top of dollar-based commerce
| tax evasion). Saavy multi-national corporations pay little to no
| tax here, and it is widely documented.
|
| Meanwhile, a 20-something engineer at a six-figure salary can
| tell you how much of that they get to keep. (hint about half here
| in California)
| streblo wrote:
| > Saavy multi-national corporations pay little to no tax here,
| and it is widely documented.
|
| > Meanwhile, a 20-something engineer at a six-figure salary can
| tell you how much of that they get to keep.
|
| Isn't this actually a good situation, from the point of view of
| the tax collector? Corporations can afford to spend a lot of
| money figuring out tax loopholes and financing schemes so they
| can avoid paying taxes. But your average high-income individual
| can't. You might as well let the large corporations have lower
| taxes, pass on the extra revenue to shareholders and employees,
| and then tax the shareholders and employees.
| Nasrudith wrote:
| It is tax avoidance technically because it is legal. Still a
| problem and arguably an even bigger problem. But the
| distinction is crucial. If you were head of the IRS and tried
| to score big by going after tax avoiders for tax evasion you
| will lose in court badly by precedents.
| cyberlurker wrote:
| I often see this "half" income lost to taxes figure on HN and
| it often doesn't stand up to scrutiny (at least in the US). Are
| you including 401k contributions as part of the half not kept?
| room500 wrote:
| The marginal tax rate can be ~50% for many high-income
| earners in CA. If you make ~550k, you would be paying 37% to
| federal and 11-12% to state.
|
| Therefore, when thinking about increasing/decreasing my
| earnings at that margin (raises, changing pre-tax
| contributions like 401k or FSA, etc), it would be correct to
| use that 50% number.
|
| This is obviously incorrect if you wanted to talk about
| effective tax rate. But using effective tax rate is also
| incorrect when changing marginal income. So it depends on
| context.
| danans wrote:
| > This is obviously incorrect if you wanted to talk about
| effective tax rate. But using effective tax rate is also
| incorrect when changing marginal income. So it depends on
| context.
|
| The GP said "a 20-something engineer at a six-figure salary
| can tell you how much of that they get to keep.", which can
| _only_ mean "effective tax rate".
|
| Although it's a common and dishonest rhetorical tactic of
| those who oppose taxation to conflate the two when
| advocating for lower taxation. There's nothing wrong with
| arguing for lower taxation, but it's wrong to misrepresent
| the rates you use to argue that.
| mistrial9 wrote:
| agree (I wrote the offhand comment above)
| jtms wrote:
| If you are in NYC and making a livable salary it certainly
| does stand up to scrutiny.
| zartar wrote:
| Yes. Was logging in to share the same comment.
|
| When I was an engineer in NYC my taxable income was about
| the following: 1. ~35% federal 2. ~8% state 3. ~3% city
|
| Don't forget sales tax!
| RHSeeger wrote:
| I'm picking the year 2015 because you're clearly talking
| about the past in your statement, so bear in mind the
| numbers change over time.
|
| In order to hit 8% (8.82%) in NYS in 2015, you needed to
| make a little over a million dollars a year (single) or 2
| million (joint).
|
| The next lowest is 6.85%, for 212k single, 318k joint.
|
| For federal to hit 35%, you need to make 411k (single or
| joint.. which makes no sense).
|
| So your numbers more or less stand up to scrutiny for
| marginal income, but I would guess not even close to that
| for effective tax rate. I don't think it's fair to
| present your marginal tax rate as "your tax rate" in a
| discussion about how much of your income you get to keep.
| That's even more so when it's before you account for
| deductions.
| aynyc wrote:
| Do you consider sales tax, etc as tax?
| RHSeeger wrote:
| I do not consider it because the discussion was about how
| much of your salary you get to keep, which implies income
| taxes.
|
| Sales tax, gas tax, land tax, etc all come later. They
| can be significant, but aren't part of the discussion of
| take home salary.
| lobotryas wrote:
| They absolutely are. You don't get to artificially limit
| scope just because it suits you. If you get robbed both
| at the ATM and on the way home you're still coming back
| with less cash!
| RHSeeger wrote:
| I didn't say I don't consider them to be taxes. I said I
| don't consider them in this discussion because they're
| not part of how much of your salary you take home.
|
| To look at it from another point of view... If _all_ the
| money you made came from long term capital gains, the
| taxes you pay on it would be based on totally different
| tax rules. Capital gains taxes are certainly impacting
| how much you "spend" on taxes, but they don't impact how
| much of your "salary" goes to taxes.... because you don't
| have a salary.
| adenadel wrote:
| This is a quibble, but 35% for the top bracket of your
| income is not the same as a 35% federal tax. You would
| need to be a quite high income for this to be true since
| the top bracket currently is 37% and the second highest
| is 35%. Someone making $200k today has an effective tax
| rate of 20%. You would need to make $2 million today to
| have an effective tax rate of 35%.
|
| https://smartasset.com/taxes/income-taxes
|
| EDIT: Aren't state and local taxes also deductible from
| federal income taxes? I'm certainly not a tax expert, so
| correct me if I'm wrong.
| toast0 wrote:
| > Aren't state and local taxes also deductible from
| federal income taxes?
|
| Yes, but the Trump tax changes put a $10,000 cap on this
| deduction, which is significantly lower than the standard
| deduction. Combined with low mortgage interest and the
| lower cap for new mortgage balances whose interest is
| deductable, a lot of people went to the standard
| deduction.
| triceratops wrote:
| > This is a quibble, but 35% for the top bracket of your
| income is not the same as a 35% federal tax.
|
| That's not a quibble at all, it's a very important point.
| The number of people who confuse "tax bracket" with
| "effective tax rate" is regrettably quite large.
| xhkkffbf wrote:
| And property tax and gas tax and ....
| danans wrote:
| > Meanwhile, a 20-something engineer at a six-figure salary can
| tell you how much of that they get to keep. (hint about half
| here in California)
|
| This is patently false. Before even counting any deductions a
| married couple with a joint income of $300k in CA pays an
| effective income tax rate (Fed,State,Local) of 29%. Single at
| the same income pay 38%.
|
| Once you add 401k contributions and the variety of pretax
| spending benefits, it goes even lower.
|
| Go ahead and model it:
|
| https://smartasset.com/taxes/california-tax-calculator
|
| You have to be earning $3 million a year before you hit an
| effective tax rate of 50%.
|
| People making that kind of money and more in SV aren't usually
| making it via regular income but rather via tax minimizing
| deferred compensation plans taxed at much lower rates.
| anonuser123456 wrote:
| 12.5% payroll tax as well.
|
| Also, about half of your medical plan (which is
| compensation), is a hidden tax (e.g. cross subsidy).
| danans wrote:
| Payroll taxes (FICA) are included in the effective tax
| rates I quoted, and furthermore are split between the
| employer and employee. The employee portion for 300k income
| is 4.6%
| sokoloff wrote:
| Who hands over the money is not relevant, IMO. If we made
| the entire payment "come from the employee" or "come from
| the employer", it's still logically coming out of the
| employee's pay.
| anonuser123456 wrote:
| This is the opinion of most economists.
| justchilly wrote:
| Everything else aside, the OP didn't say they were married.
| That brings the rate a lot closer to what OP said than 29%.
| danans wrote:
| 38% is very far from 50%, and to characterize the two as
| the same or similar does a disservice to any discussion
| regarding tax rates.
| xhkkffbf wrote:
| Yes, but what about sales tax (close to 10% in Cali), gas tax
| (68 cents per gallon), property tax (either directly or
| through rent) etc etc.
| koiz wrote:
| Ah corruption out in the open. What else is new.
| tiahura wrote:
| So in consideration for a fine and cooperation against a bigger
| fish, he got a deal in connection with a nonviolent offense.
| Exciting because of all the extra 0's, but sounds like an
| everyday occurrence in DA offices across the country.
| hikerclimb wrote:
| These people should be in jail but for some reason our system
| does nothing about it.
| ApolloFortyNine wrote:
| How much in taxes do you have to cheat as a middle class tax
| payer to be investigated and tried in your mind?
|
| In my experience (misreported some accounts due to a
| misunderstanding, which had a ~25% impact on what taxes I paid)
| the IRS sends you what you owe with a nominal penalty. I believe
| I paid ~5% extra. I paid it, and life went on.
|
| I think there's a huge misunderstanding around the IRS "going
| after the little guy." For you to actually be convicted of tax
| fraud, the IRS would have to take you to court (expensive) and
| prove you set out commit fraud (hard to do in most cases).
|
| At the point where this is worth it for the IRS to do, are you
| really 'the little guy' any more?
| modeless wrote:
| My understanding is that if a little guy evades taxes, but then
| cooperates with the IRS when caught, and agrees to pay all taxes
| and interest and penalties, then they generally don't get thrown
| in jail and have all their other money and possessions and
| responsibilities taken away, as this article seems to imply they
| should do with billionaires.
|
| I don't see how this is evidence of special treatment for
| billionaires. The guy paid way more in penalties than he saved on
| taxes and also had to help prosecute his friend, who evaded way
| more tax than he did. It doesn't seem to me like he came out on
| top.
| coldtea wrote:
| > _My understanding is that if a little guy evades taxes, but
| then cooperates with the IRS when caught, and agrees to pay all
| taxes and interest and penalties, then they generally don 't
| get thrown in jail and have all their other money and
| possessions and responsibilities taken away, as this article
| seems to imply they should do with billionaires._
|
| Maybe, but that's sort of like how a person who slaps somebody
| usually doesn't get jail time compared to the person who beats
| somebody to a pulp.
|
| The billionaire tax cheat has much larger impact on society.
| And the billionaire has much less justification for doing so
| (if they pay their taxes properly they're still a billionaire).
| [deleted]
| narrator wrote:
| The IRS has a lot of leniency because they know paying taxes
| is hard. Tax Court is one of the few places where you can
| SOMETIMES claim ignorance of the law as a valid defense to
| get penalties and such removed.
| pwned1 wrote:
| Yeah, generally criminal prosecution is reserved for the really
| egregious cases, such as complete failure to file or failure to
| claim large amounts of income for substantial time periods.
| ciamac wrote:
| The claim is that he didn't declare $200M in income and hid
| it in off-shore accounts over a decade. Sounds like a large
| amount of money and a substantial time period.
| elipsey wrote:
| >> My understanding is that if a little guy evades taxes, but
| then cooperates with the IRS when caught, and agrees to pay all
| taxes and interest and penalties, then they generally don't get
| thrown in jail
|
| Where in the world did you get this idea? If you don't pay
| fully or on time, but don't lie, they just make you pay,
| because that's not "evasion."
|
| Elaborate premeditated lying using fake books or shell
| corporations to deliberately hide assets is a serious crime,
| which the rest of us can't get out of with our armies of
| lawyers and well placed phone calls to politicians.
| odiroot wrote:
| > My understanding is that if a little guy evades taxes, but
| then cooperates [..] then they generally don't get thrown in
| jail
|
| This is how it more or less works in my country but you do have
| to file a "active repentance" form and spill out of your
| misdeeds. Otherwise, anything you tried to hide, will work even
| harder against you.
| GizmoSwan wrote:
| Billionaires can avoid paying taxes equal to what people make
| in life time. It is fraud.
|
| Why should Bernie Madoff gone to jail then?! if some guy can
| steal a car then?
|
| The scale matters.
| webmaven wrote:
| _> Why should Bernie Madoff gone to jail then?! if some guy
| can steal a car then?_
|
| Fraud and tax fraud are different crimes, and even if they
| were the same the number of counts in Madoff's case would be
| vastly different.
|
| In other words, you're much better off committing tax fraud
| than running a Ponzi scheme targeting rich people. Plus, I
| suspect that if Madoff had walked he would have died shortly
| thereafter in some freak accident or an apparent suicide .
| ChrisMarshallNY wrote:
| Bernie Madoff went to jail because he ripped off very rich
| people, and, even more importantly, humiliated and betrayed
| them.
|
| I suspect, if the victims of his schemes had just been a
| bunch of plebes like us, then he would be sunning on the
| Riviera, right now.
| missedthecue wrote:
| Billionaire John Kapoor is in prison for another half
| decade for bribing doctors to prescribe opioids. Another
| example is the Jeff Skilling who went to prison for 15
| years for ripping off customers, employees and
| shareholders, most of whom were not rich people. I don't
| think your narrative accurately reflects the facts.
| ChrisMarshallNY wrote:
| > _most_ of whom
|
| It just takes one...
|
| Have a great day!
| stefan_ wrote:
| Yes, why don't we prosecute a one-time shoplifter the same as a
| guy who stole so much he used it to fund a shoplifting
| conspiracy, then paid a bunch more to various PACs and related
| contributions to _not go to prison_ for it?
|
| The obvious, trivial answer of course is that in tax law, _how
| much you evaded determines the severity of the crime_.
| lisper wrote:
| There are four differences. First, the IRS prosecutes a lot
| more low-income people than high-income people (by percentage
| as well as by absolute numbers) so a billionaire has much
| better odds of not getting caught. Second, billionaires have
| access to better layers, accountants, publicists and
| politicians to give them negotiating leverage if they do get
| caught. Third, the payoff for a billionaire successfully
| cheating on their taxes is much higher than for a non-
| billionaire. And finally, even if a billionaire does get caught
| and pays all their back-taxes with penalties, they will still
| most likely be a billionaire and be able to sustain a pretty
| posh lifestyle. So the expected value of the tax-cheating
| lottery is much higher for a billionaire than a normal person.
| majormajor wrote:
| > Third, the payoff for a billionaire successfully cheating
| on their taxes is much higher than for a non-billionaire. And
| finally, even if a billionaire does get caught and pays all
| their back-taxes with penalties, they will still most likely
| be a billionaire and be able to sustain a pretty posh
| lifestyle.
|
| This is the weird part to me. I don't think the marginal
| payoff is higher for a billionaire, other than in ego or
| ideological or other less-rational terms.
|
| Someone making 50K who scams an extra 2K out of their taxes
| has gotten themselves a pretty big boost to their disposable
| income. While a billionaire already has millions to play
| with...
|
| I would support higher and harsher penalties for larger
| absolute amounts of tax fraud, though, because you're
| depriving your fellow citizens of more if you're keeping
| larger $$ amounts.
| dmurray wrote:
| Yeah, it's not intellectually honest to argue "a
| billionaire committing a billion-dollar tax fraud has a lot
| to gain, because a billion dollars is a lot of money, but a
| billionaire getting fined a billion dollars is nothing to
| him, because diminishing marginal utility."
| [deleted]
| arrosenberg wrote:
| How is it dishonest? They have a lot to gain financially,
| and the penalty for doing so (although steep) is not
| significant enough to have a material impact on the
| person committing the fraud. That seems like the exact
| moral hazard that creates this situation.
|
| For a poor person, the same situation is likely life-
| altering in either case.
| jeddy3 wrote:
| > How is it dishonest?
|
| Either a billion dollars is a lot, or it is not.
| MrPatan wrote:
| Can you edit your comment to add "To the same person".
| Some people replying seem to be having a very hard time
| with it.
| arrosenberg wrote:
| It's clearly both. The behavior of the billionaires makes
| that clear. Billions of dollars is enough incentive to
| commit tax fraud, and (hundreds of) millions of dollars
| in fines has not been enough to disincentive tax fraud.
| treis wrote:
| $1,000 to you is (probably) not a lot. For someone in a
| third world shithole it's several years to a life time of
| earnings. Perspective matters when determining if
| something is "a lot" or not.
| jeddy3 wrote:
| Well, yeah, obviously.
|
| But using in the same sentence as both, depending on the
| point you're trying to prove, is a little dishonest.
|
| As MrPatan pointed out in a sibling comment, the sentence
| is about the _same_ person.
| fuzzer37 wrote:
| 1 billion dollars to someone who has 2 billion dollars is
| not a lot.
|
| 1 billion dollars to someone who has 0 dollars is a lot.
| [deleted]
| coldtea wrote:
| > _This is the weird part to me. I don 't think the
| marginal payoff is higher for a billionaire, other than in
| ego or ideological or other less-rational terms._
|
| It is higher in a very real and measurable way: it's way
| more money.
|
| Doesn't have to higher as a "marginal payoff". (Besides
| that would imply that if the billionaire didn't get any
| real benefit or pleasure from the non-taxed money, they
| should face no penalty).
| bayesianbot wrote:
| To the latter part of top post, for a billionaire utility
| value and expected value are equal as if he gains or loses
| a few million it doesn't matter. For smaller player they
| can be completely different, yes a few thousand can be a
| good income gain, but getting caught can mean they get
| completely ruined.
|
| So if expected value of tax cheating in vacuum is - lets
| imagine - 20% of the amount of taxes cheated, billionaire
| should cheat on taxes in every situation, as they simply
| gain 20% on average. Smaller player shouldn't, as even
| though their expected value is the same, their utility
| value can be completely different as they might take a risk
| of ruining their business and losing future income and
| hugely lowering their quality of life.
|
| edit: and also for small amounts the way down is much
| harsher on the utility value, so being a favorite to gain
| 10k might not be worth it, if the possible -15k means your
| lifestyle suffers.
| caseysoftware wrote:
| I think you're leaving out enforcement costs.
|
| If you're little and scamming a few $k here and there,
| the ROI (Return on Investigation) for the IRS to go after
| you is tiny. It's probably not worth assigning an
| investigator.
|
| If you're HUGE and scamming billions, the ROI is there
| _but_ you also have the capabilities to defend yourself,
| obfuscate things, etc so it 's unlikely they can destroy
| you. Therefore, it's not one investigator but a team with
| forensic accountants, potentially informants, etc.
|
| For everyone else, the danger is in the middle. Where you
| have enough that you can lose a life-destroying amount
| _but_ you don 't have the means to protect yourself. That
| is a great target for investigators.
|
| In short, as you gain more, be careful and have a good
| accountant who follows the rules to the best of their
| ability.. until you can make the rules.
|
| Oh crap.
| lisper wrote:
| Billionaires think differently about money than non-
| billionaires. Ordinary people use money to exercise control
| over their own lives. Billionaires use money to exercise
| control over other people's lives, and when that is your
| goal, a few extra billion dollars means a few extra tens of
| thousands of people you can put on payroll to do your
| bidding, whatever that might happen to be. It lets you do
| things like run for president or go into space. It's not my
| cup of tea, but it's not fair to call it "irrational". Some
| people just want different things.
| nicoburns wrote:
| It might be rational to want those things. But I think I
| would argue that people largely shouldn't be able to have
| them.
| DyslexicAtheist wrote:
| > Someone making 50K who scams an extra 2K out of their
| taxes has gotten themselves a pretty big boost to their
| disposable income.
|
| another way to think of this is in the difference of
| relationship to money between a billionaire and a in
| comparison poor person. give 2K to the avg Joe/Jane they'll
| circulate it back into the market by purchasing while the
| billionaire sees themself as a "steward of their fortune"
| and who would keep in their accounts. (also the reason why
| trickle-down Reaganomics doesn't work).
|
| Also to a billionaire there is a high chance justifying
| tax-avoidance (and evasion) is easier since they anyway do
| it using multinational corporations. And obvs. it's more
| work to go after big cases where the fight is about
| proofing overstepping the line between avoidance/evasion
| while with poor people the case is usually about just
| evasion.
|
| I'll continue to recommend this here whenever the topic
| comes up: https://en.wikipedia.org/wiki/Treasure_Islands:_T
| ax_Havens_a...
| briffle wrote:
| To a person dealing with the IRS over millions, a whole
| team of lawyers at $1k/hour each is a drop in the bucket.
| to a person who cheated uncle sam of $2k, its cheaper to
| settle (even with penalties) than to hire a single lawyer
| to represent them. That is why the IRS loves going after
| the little guys, they don't fight back.
| sokoloff wrote:
| They often don't fight back because it's often a fairly
| clear-cut matter where the taxpayer is in the wrong and
| both sides just move to resolution.
| golf1052 wrote:
| Loves is a strong word. I think it makes more sense to
| say that the IRS doesn't have the budget or resources to
| go after the big players. Yes, people cheating only $2k
| probably won't pay for a lawyer but from the IRS side
| it's just much simpler to analyze and prove that person
| is in the wrong. See this article from ProPublica
| https://www.propublica.org/article/how-the-irs-was-gutted
| glitchc wrote:
| It should be taken into consideration that it's much harder
| to prove that the billionaire actually cheated vs. a regular
| Joe, who may simply have lied on his taxes. The IRS, in the
| vein of all prosecutors, will not prosecute unless they can
| make a strong enough case to make a conviction highly
| probable.
| WalterBright wrote:
| > First, the IRS prosecutes a lot more low-income people than
| high-income people (by percentage as well as by absolute
| numbers) so a billionaire has much better odds of not getting
| caught.
|
| That assumes they cheat at the same rate.
| MegaButts wrote:
| Is there any reason to believe that billionaires don't
| cheat more? I don't think billionaires are rich because
| they're more talented. I think they're rich because they're
| more opportunistic and, quite frankly, shittier human
| beings.
| hnburnsy wrote:
| From the IRS...
|
| 'IRS estimates that between 21 percent to 26 percent of
| EITC claims are paid in error. Some of the errors are
| unintentional caused by the complexity of the law, but
| some of the claims are intentional disregard of the law'
| MegaButts wrote:
| That statistic is irrelevant since it doesn't distinguish
| between rich and poor. But the IRS has publicly admitted
| to not pursuing rich people because "it's too hard."
|
| https://www.gq.com/story/no-irs-audits-for-the-rich
| hnburnsy wrote:
| Income audit rates...
|
| Income Range/Percent Examined 2015
|
| 1-$25,0000/.66
|
| ...
|
| $10,000,000+/8.16
|
| "The typical audits for higher-income taxpayers involve
| at least three different tax years, often include related
| entities, and routinely take years to resolve. The
| highest income taxpayers face the most significant chance
| of an examination, and they face the most highly trained
| and experienced IRS agents and teams utilizing our most
| sophisticated tools and techniques."
|
| https://www.irs.gov/about-irs/irs-audit-rates-
| significantly-...
| MegaButts wrote:
| Thank you. This is much more useful!
| Natsu wrote:
| But won't the billionaire be highly unlikely to have any hand
| in doing their own taxes? I'd imagine that you'd have someone
| doing that for you and have no idea of the details.
|
| I'm significantly poorer than the billionaires, but the only
| thing I know about taxes is what forms I need to gather and
| mail to my tax guy.
| lisper wrote:
| Billionaires will typically give an indication to the
| people they hire to prepare their taxes how hard s/he wants
| them to lean on the rules.
| modeless wrote:
| > even if a billionaire does get caught and pays all their
| back-taxes with penalties, they will still most likely be a
| billionaire and be able to sustain a pretty posh lifestyle
|
| By that logic, if they just pay their taxes it won't affect
| their lifestyle either, so their incentive to cheat is also
| lower.
|
| > the payoff for a billionaire successfully cheating on their
| taxes is much higher than for a non-billionaire
|
| In absolute terms, sure. And in absolute terms the penalties
| are much bigger too.
|
| > the IRS prosecutes a lot more low-income people than high-
| income people (by percentage as well as by absolute numbers)
| so a billionaire has much better odds of not getting caught
|
| Your conclusion doesn't follow from your evidence. It's
| possible that low income people are cheating taxes at a
| higher rate than billionaires. I really don't have a lot of
| trouble believing this; small tax fraud is widespread, even
| accepted by a lot of people.
|
| > billionaires have access to better layers, accountants,
| publicists and politicians to give them negotiating leverage
| if they do get caught
|
| I don't see any evidence that this guy got a better deal than
| he should have.
|
| The point of tax enforcement is not to punish billionaires
| for being billionaires. The point of tax enforcement is to
| ensure taxes are collected. If you think taxes are too low,
| or just want to punish billionaires more harshly because
| they're billionaires, then Congress is the place that has to
| be changed.
| probably_wrong wrote:
| The point about the IRS auditing poor people more than rich
| people was in the news some months ago. The IRS confirmed
| that they don't prosecute the rich because they can't
| afford to go after them.
|
| Source: https://www.propublica.org/article/irs-sorry-but-
| its-just-ea...
| modeless wrote:
| Your claim that the IRS doesn't prosecute the rich is
| simply false. https://www.irs.gov/about-irs/irs-audit-
| rates-significantly-...
| DecoPerson wrote:
| > By that logic, if they just pay their taxes it won't
| affect their lifestyle either, so their incentive to cheat
| is also lower.
|
| Not quite.
|
| You need to think about when they have the money. It is
| "capitalism" after all, not "moneyism." If you
| build/invest-in something using $10mil that should have
| been tax, with a decent ROI you might make that money back
| in 5-10 years. Now you have the original money, plus own
| something that continues to make money. Income++, but your
| "back taxes" are still the same for the earlier fraudulent
| period.
|
| (assuming the IRS doesn't take stuff like this into account
| when dealing with collecting "back taxes")
| onethought wrote:
| I definitely think the wealthy should be held to a higher
| standard than the poor. Not only is the magnitude of their
| crime bigger, but their is less justification for it.
|
| There is evidence he worked out a deal with the removal of
| deductions regarding his charity... why did they remove
| those deductions? If he's entitled to them... clearly it
| was done as a negotiating piece.
|
| How many average Joe's have 180 million in deductions to
| negotiate with?
| tick_tock_tick wrote:
| The IRS has nice little boxes that the low income people can
| fill in that are blatantly obvious when fraudulent. It's not
| the IRS's fault that people think they can fudge some number
| and it not instantly get flagged on entry into the computer.
| buzzerbetrayed wrote:
| > the IRS prosecutes a lot more low-income people than high-
| income people (by percentage as well as by absolute numbers)
|
| I'm not sure how this is relevant. As of October 2020, there
| were 614 billionaires in the US[1]. Of those 614 people, only
| a few of them are likely breaking any sort of tax law
| (billionaires have a lot of money to make sure they take
| advantage of loopholes, without breaking the law). So there
| isn't some big list of billionaires that the IRS could be
| going after but is choosing not to.
|
| So the question is, are there known billionaire tax evaders
| that aren't getting prosecuted? That should be the only
| question that matters. Using statistics in this case would
| likely lead to more injustice than less, as the only way you
| could get billionaire vs non-billionaire prosecutions rates
| to align is by prosecuting billionaires that aren't breaking
| the law. (edit: unless there are many billionaire tax evaders
| that are just getting away with it, of course. I don't know
| if that's the case or not)
|
| [1]:
| https://en.wikipedia.org/wiki/List_of_Americans_by_net_worth
| DyslexicAtheist wrote:
| the typical billionaire can easily go to another country
| (and immediately get a passport if they wish). it helps
| looking at this not just from an US/Western pov but how
| Chinese, Russian, African billionaires are quickly feeling
| at home in places like US[1], UK, Switzerland. There is a
| lot more money to be made (and washed) in places like
| Africa / Asia that requires a "safe haven"
|
| [1] the US today is one of the biggest tax-havens in the
| world (source: "Treasure Island") and the OECD crackdown on
| the usual suspects (Cayman, Channel Islands, ...) never
| hurt anyone since the US really just wanted a slice of the
| off-shore pie (which anyway exists whether with or without
| the US as a tax-haven).
| hnburnsy wrote:
| The IRS audits most poor earners because of rampant Earned
| Income Tax Credit fraud. Audit rates though of the really
| rich are 30x that of the poor.
| hn8788 wrote:
| My dad had a similar experience with the IRS. He had startd a
| small business and was supposed to be paying something monthly,
| but he thought it was quarterly. He got fined, and when he
| mailed in his payment, he included a letter explaining that it
| was his first time running a business, and it was an honest
| mistake. ~6 months later he got a check back from the IRS for
| the fine amount, plus interest. They seem to be pretty lenient
| as long as you aren't actively trying to make their lives
| difficult.
| twox2 wrote:
| Are you comfortable sharing what year this was?
| hn8788 wrote:
| I don't remember the exact year, but it was around 20 years
| ago.
| matheusmoreira wrote:
| > The guy paid way more in penalties than he saved on taxes
|
| Is this a fact?
| glitchc wrote:
| I feel this article is gas-lighting the audience. Buried midway
| through the article is the important tidbit that as part of the
| DPA, Smith has agreed to pay $139 million USD. And, over the
| years, he has given away more money to charity than owed in
| taxes, making him very sympathetic to a jury.
|
| Ergo there's no chance of prosecution, he's given more than he
| owes to charity, and has still agreed to pay back most of what he
| owes. It's not perfect, but the system is working.
| ciamac wrote:
| Notice that his charitable giving began after he was aware the
| IRS was after him. There is evidence he committed criminal tax
| fraud, giving the money back or giving the money to charity
| doesn't ameliorate that. To make an analogy, suppose you robbed
| a bank and were about to get caught. If you gave back the
| money, and made some donations to charity, would that absolve
| you of criminal liability? This seems like an accurate analogy
| to me, with the "bank" being the US taxpayer in this case.
|
| Here's another article that highlights how he became a major,
| high profile philanthropist only after it became clear the feds
| were on his case:
|
| https://www.washingtonpost.com/business/2020/11/09/smith-bro...
|
| The charitable giving seems to clearly be part of an
| aggressive, multi-pronged, and ultimately successful strategy
| to avoid prosecution.
|
| This is not evidence "the system is working", this is evidence
| that you can buy your way out of trouble.
| [deleted]
| legulere wrote:
| > And, over the years, he has given away more money to charity
| than owed in taxes, making him very sympathetic to a jury.
|
| It should be the voters' decision where the money goes to.
| Charities can also be a place to store money. If you control
| them you can also decide where the money is invested in. You
| just need to put a bit each year into some charitable cause
| where again you can spend that money buying products from
| wherever you want.
| 1290cc wrote:
| Imagine being a billionaire and then avoiding taxes. No matter
| how you look at it you are always going to remain in the tres
| commas club and afford a fleet of yachts, mansions, rare Nike
| Jordans and throw parties for instagram models in Tulum.
|
| Yet you still do it.
| bradlys wrote:
| I assume there's a risk reward calculation being made where all
| they care about are their yearly returns.
|
| I know a guy who is quite rich off of Bitcoin (bought thousands
| when it was $2 and has held most of it). Refuses to pay taxes
| unless the IRS actually comes after him. So maybe these
| billionaires are similar. They'll only pay if the IRS makes
| them and they'll drag their feet in whatever way they can.
| vmception wrote:
| There is a tax compliant way to accomplish everything he did.
|
| Its interesting to me that they went after some of those things
| too: the prosecution agreement required Smith to not claim the
| deduction on $182 million donated to charity.
|
| That's a crafty way of getting money back. Kind of like a ballast
| system to provide balance.
| seraphsf wrote:
| What's the tax compliant way?
| vmception wrote:
| The key issues here were hiding the existence of accounts and
| organizations, not the existence of them.
|
| The British Virgin Islands company can exist and its earnings
| can grow tax free. The same for the Caymans one. The nature
| of what those organizations do determines what taxes a US
| citizen owner has to pay, in many cases it would still be
| substantially lower than "ordinary income". The key issues
| would be aiming to avoid passive foreign investment company
| and controlled foreign company regulations.
|
| The second issue is neglecting the FBAR reporting. Which is
| another way of telling the US government about bank accounts
| and companies. Neglecting FBAR alone has criminal penalties.
|
| Merely telling them does not create a tax liability.
|
| But perhaps telling them would reveal other non-compliance or
| undermine other asset protection plans by the mere nature of
| someone knowing. Could trigger pursuits by creditors or prior
| relationships. Not everyone has these problems and as you see
| they are not necessarily tax problems.
|
| The third issue was using the funds domestically. They bought
| a house on US soil, strike one, and lived in it, strike two,
| and not paying taxes on the amount repatriated, strike three.
| They could have posted collateral with a third party lender
| and borrowed against it, to get liquid. Paper borrowing
| without a third party lender (ie. Just writing a contract on
| behalf of the offshore company you own, and saying you are
| borrowing) would not be compliant. Collateralized third party
| lending has stood the test of time. If your collateral gets
| liquidated you have to pay taxes then, so overcollateralize
| and pay your interest.
|
| A year in the US Virgin Islands or Peurto Rico could have
| been used to convert those taxable earnings into post-tax at
| 0-4% tax rate.
|
| They just didn't and stuck with non-compliant avenues.
|
| They are using non-profits onshore, they could have done a
| lot more with that to reduce their taxable earnings while
| retaining control of the funds for the most part.
|
| There are so many ways.
| fireeyed wrote:
| If you are middle class and you don't pay taxes or hide your
| income, IRS will come down with the full force of the law.
| Prosecution for the serfs Non-prosecution agreements for the
| Club.
|
| "Its a big club and you ain't in it" - George Carlin
| harryh wrote:
| Your assertion is not correct. The IRS is surprisingly
| reasonable about things. There are penalties and interest for
| failing to pay your taxes correctly, but they are also willing
| to cut deals to make things work.
|
| Criminal prosecution is rare and reserved for the egregious and
| uncooperative. It's something like 2,000 cases per year total.
| vmception wrote:
| Although there was a tax compliant way to accomplish everything
| they did, still without paying more to the US, The divorce
| started all this.
|
| Divorce laws are far too simplistic and rely on the concept of a
| "unit" with both spouses being equal partners by mere nature of
| showing up. This seems to be a stretch of the imagination with a
| reality having diminishing returns. For example, even with a
| spouse providing some form of unpaid labor, the level of utility
| in how that helps the other spouse is not unlimited, it would be
| closer to (O)logn. It should have a specific value that is
| quantifiable. This does not seem to be part of discussions and in
| most places seems to be the most egregious thing one could
| suggest! In any other form of financial partnership, this is easy
| to quantify or at least there is greater flexibility in setting
| it up. One example - which I am not suggesting is applicable to
| marriage - is how vesting agreements really help give the (O)logn
| compensation path.
|
| I have seen some divorce laws that seem holistic, specifically
| Monaco's. Which provides a limitation on alimony as well.
|
| For people that actually own assets outright (not mortgages but
| the whole asset) There is also fairly easy estate planning
| possibly even in "community property" states to separate assets
| from before a marriage. So thats another wealthy privilege.
|
| Fixing all of that would fix what would even be attempted to be
| listed in a divorce court proceeding.
| davemp wrote:
| This is a pretty interesting take on divorce.
|
| I'd be hesitant to view marriage as a financial partnership
| though. To me, marriage is more of a life partnership where
| both parties are "all in". A lot of the benefits of having a
| "life partner" stem from having someone who unconditionally
| watches your back and keeps your needs in mind. You can't put a
| price on that type of a partnership by definition (you
| introduce a monetary condition).
|
| I agree that someone with real wealth could hire folks to
| manage their assets, administrate, listen to their
| thoughts/concerns, provide intimacy, etc, at the cost of a
| fraction of their net worth well below 50%.
|
| Maybe people worried about protecting their wealth should just
| hire out those roles instead of getting married. I wonder why
| they don't. :)
| vmception wrote:
| > Maybe people worried about protecting their wealth should
| just hire out those roles instead of getting married. I
| wonder why they don't. :)
|
| A lot of people do. What point were you trying to make by
| assuming its not happening a lot?
| vmception wrote:
| > I'd be hesitant to view marriage as a financial partnership
| though.
|
| Acknowledging the problems with the contract requires looking
| at the realities of the contract.
|
| The reality of that contract is that it has financial
| components and financial consequences, which are assumed to
| scale linearly, when that's not true. Someone "having your
| back" could just as arbitrarily be worth 10% of assets or a
| retainer or a monthly rate. The point being that starting at
| 50% and working down is just as arbitrary. I would say it
| would not actually scale infinitely, just as much as a key
| salaried employee does not have compensation that scales
| proportionately to the earnings of that corporation.
|
| I absolutely do not care about how these comparisons make you
| feel as that is completely a product of conditioning. This is
| still a flawed contract, lets acknowledge that it is a flawed
| contract whether your line in the sand is "cant put a price
| on" or something else.
| ddelt wrote:
| Agreed - You stated more elegantly what I came here to
| reply with.
|
| I personally love the "idea" or concept of a marriage (the
| understanding and commitment of two humans to each other
| for pure love, devotion, or spiritual/religious reasons),
| but in practice, at least from what I've seen in the US,
| it's very much about the legal aspects of the "marriage
| contract", the financial and legal impacts, as well as to
| continue to promote the US agenda of the nuclear family
| unit.
| davemp wrote:
| > I absolutely do not care about how these comparisons make
| you feel as that is completely a product of conditioning.
| This is still a flawed contract, lets acknowledge that it
| is a flawed contract whether your line in the sand is "cant
| put a price on" or something else.
|
| This goes in reverse as well. The only significant reason
| to get married is social conditioning/pressure. Like I
| implied above, you can just hire those roles out and not
| enter the contract. Marriage is absolutely about feelings
| or else no one would agree to it.
|
| Marriage is not an employment contract, the comparison is
| fallacious. The conditions for breaking the contract are
| much more severe because you're not "supposed to" switch
| partners like you switch jobs.
|
| If you don't believe in marriage more power to you, don't
| enter into one.
| triceratops wrote:
| It's worth pointing out that not having a marriage
| license or registering your marriage with the government,
| doesn't mean you aren't in a marriage.[1] Divorce laws
| still apply in this case.
|
| 1. https://en.wikipedia.org/wiki/Common-law_marriage
| vmception wrote:
| > Marriage is absolutely about feelings or else no one
| would agree to it. Marriage is not an employment
| contract, the comparison is fallacious.
|
| The venn diagram overlaps. If you don't want it to
| overlap, fix the contract instead of invalidating
| everyone that dares to acknowledge it.
| anotherman554 wrote:
| Here's an article arguing your transactional view of
| marriage is wrong that that you shouldn't apply economic
| models to marriage. Quote "You are not in a transaction
| with your spouse; you're in a relationship."
|
| I don't expect it to change your view, but here it is for
| what it's worth:
|
| https://www.theatlantic.com/sexes/archive/2013/03/spouses-
| pr...
| fakedang wrote:
| Monaco is actually pretty biased against women in its divorce
| laws (I think alimony is capped at $100k per annum). There's a
| reason a lot of rich folks go to Monaco to surprise their
| spouses with a divorce. Now imagine if you were someone like
| MacKenzie Scott, who was actively involved with Amazon's
| founding. While her settlement with Jeff was quite generous on
| his part, in a Monaco divorce, she would have gotten maybe a
| mil or two tops. Monaco is in no way holistic when it comes to
| divorce, just a magnet for boomer millionaires and
| billionaires.
| vmception wrote:
| > Monaco is actually pretty biased against women in its
| divorce laws
|
| Monegasque divorce laws are not gendered and there are plenty
| of wealthy women in Monaco.
|
| Alimony also has a fixed time period of 5 years.
|
| What part of that do you find controversial as opposed to
| practical? Its more like generous severance as opposed to a
| perhaps merely more _familiar_ concept of alimony.
|
| This would give the liberty for MacKenzie, for example, to be
| sure that she got her own vesting agreements and her own
| shares in the organization they founded together. It moves
| the agency back to the individuals as opposed to assuming
| they are going to be starry eyed infants that are going to
| get screwed over. If people want to decouple marriage from
| any financial considerations, this is the way to do it, focus
| on the love. If they want to be business partners then write
| them into the separate business. If they want to have their
| supporting unpaid labor valued, then their moonlighting as a
| personal assistant is valued in the six figure ranges just
| like professionals.
| robocat wrote:
| > Monaco is actually pretty biased against women in its
| divorce laws
|
| I presume the laws also equally help a rich woman, and are
| "biased" against a toyboy husband?
| sschueller wrote:
| To rich to fail. Disgusting how the wealthy get away with pretty
| much everything while the poor are robbed of their possessions
| and freedom.
|
| This needs to be fixed ASAP or the US won't be any different than
| any corrupt banana republic.
| liaukovv wrote:
| The issue here seems to be that attorney office can decide to
| not apply laws arbitrarily.
|
| Part of checks and balances I guess?
| tiahura wrote:
| Prosecutorial discretion is a different than checks and
| balances. C&B describes the interrelations between branches
| of government in furtherance of good governance. Only a
| single branch of government is involved here - the executive.
|
| There are at least two related principles behind
| prosecutorial discretion. One is that the system should be
| biased against prosecuting people because putting people in
| jail shouldn't be our goal. Another principle is that law
| enforcement, from the local cop all the way to the US
| Attorney General, has to have some discretion in how they do
| their job - e.g. do we really want cops pulling everyone over
| who is 1 mph over the speed limit?
| alistairSH wrote:
| But they did apply the law. Part of the settlement was an
| admission of guilt (along with massive fines and turning
| snitch on at least one business associate).
|
| It sounds like everybody wins. IRS gets revenue in the form
| of fines that exceeded the avoided taxes. AG's office gets a
| snitch, which should enable them to fry bigger fish. The
| criminal pays a large fine, gets his name in the paper for
| bad reasons, but avoids jail.
|
| Really, what does jail get us in this case? It's a non-
| violent crime.
| liaukovv wrote:
| Prosecution would be applying the law. They didn't
| prosecute.
| alistairSH wrote:
| The guy admitted he was guilty and agreed to a punishment
| - what value does prosecution serve at this point?
| liaukovv wrote:
| Applying the law equally to all has value of it's own.
| dcolkitt wrote:
| Virtually no one in the US, rich or poor, is criminally
| prosecuted for tax evasion. Really the only way to be
| prosecuted for tax evasion is either to commit a whole bunch of
| other crimes, and have tax evasion thrown on to the indictment.
| Or be a public anti-tax activist like Wesley Snipes.
|
| This isn't an issue of the rich getting special treatment. It's
| an issue of IRS enforcement having highly constrained
| resources, and preferring to recover penalties, rather than
| spend resources on expensive criminal cases.
|
| Putting people behind bars doesn't generate revenue, and
| revenue is literally the IRS' middle name.
| liaukovv wrote:
| Fear is powerful motivator. Rich people fear prison much more
| than they fear fines.
| toomuchtodo wrote:
| "Laws that are only punishable by fines are only laws for
| poor people."
| NovemberWhiskey wrote:
| Not with a unit-fine approach. There's a case in
| Switzerland of a driver getting a $300K speeding ticket,
| for example.
| vmception wrote:
| Not as much as you think.
|
| As rich people never need an employer in the future, a
| felony and prison time isn't as consequential as it is for
| others. Many times their white collar crimes are able to be
| negotiated to just under a year in prison, to avoid felony
| status. Felonies can limit what kinds of financial services
| they can offer or be a part of, and can limit which
| countries they can get into. But it still is not the same
| consequence as the general population.
| Nasrudith wrote:
| If you have sufficient money and can afford the risk you
| can build your own job essentially.
| godelzilla wrote:
| "Banana republics" are also the poor robbed of their
| possessions and freedom by the same unjust system on a global
| level.
| peter_d_sherman wrote:
| You know (and I realize that this comment will be highly
| controversial), you know, it's amazing to me that in this day and
| age, if someone is rich and/or famous and accused of a crime,
| it's amazing to me that the media never seems to give them "Due
| Process"...
|
| "Media Due Process"
|
| For lack of a better term...
|
| It doesn't seem to exist in this day and age.
|
| I'd like to hear _the other side of the story_ before I make up
| my mind, thank you very much!
|
| Until I do, from the accused own's mouth, I might add, I'm going
| to presume _innocent until proven guilty_.
|
| I will not be "the court of public opinion" in response to the
| media, any media, slighted one way or slighted the other.
|
| I simply refuse.
|
| I don't know the accused, I don't know what happened, and until
| _all_ of the facts are on the table -- pro and con -- I _refuse_
| to make up my mind on the subject.
|
| A single set of facts from a single media outlet, or even several
| -- _are not all of the facts_ , because they could have been
| _cherry-picked_ , one way or the other...
|
| I take this approach; this mindset; with _all_ media in this day
| and age -- not just the media outlet that broke this story...
|
| OK, those are my thoughts.
|
| Go ahead and lambaste me if you disagree...
| liaukovv wrote:
| He admitted committed crimes as part of the agreement.
| 1986 wrote:
| > In a six-page statement of facts, Smith acknowledged evading
| more than $43 million in taxes over a decade and repeatedly
| filing false tax forms.
| mandevil wrote:
| If you had actually read this article, you would see that Mr.
| Smith admitted he was guilty in legal documents under penalty
| of perjury. Is that enough due process for you?
|
| In fact, this article is mostly focused on how the optics -a
| high profile (in fact, the wealthiest) African-American man,
| donates large sums of money to charity, etc.- seem to have
| concerned the prosecutors enough to accept a non-pros rather
| than risking trial, if they could get another billionaire's
| scalp in the bargain as well (said other billionaire did
| essentially the same thing- Smith claims it was all Brockman's
| idea, no doubt Brockman will claim it was all Smith's idea).
| klmadfejno wrote:
| This comment doesn't strike me as especially controversial so
| much as annoying and preachy, ignoring the facts around his
| point of view already being shared. Aggressively drawing lines
| in the sand on principles without context is meaningless. Pre-
| empting a comment with "this will be controversial... lambaste
| me if you disagree" is just asking for an unnecessary fight.
|
| It doesn't matter what you think on the case. Presumed innocent
| until proven guilty is a good paradigm for courts, but you're
| just some guy, who is not obligated to hold an opinion on this
| case at all. It's perfectly fine to say "I don't know and I
| don't think I've heard enough to judge one way or the other",
| or, if that's your take, not say anything at all.
|
| Supporting an opinion of innocence without evidence of
| innocence is equally as dumb as supporting a side of guilt
| without evidence of guilt.
| aioprisan wrote:
| When you can read the DOJ case filings and all the facts of the
| case, where he actually agreed that he did in fact commit
| crimes, there's no need to "hear from the accused's own mouth."
| You're just making excuses for someone's crimes in the name of
| some intellectual purity exercise. Do you also believe there
| were "good people on both sides" in Charlottesville?
| minikites wrote:
| >Until I do, from the accused own's mouth, I might add, I'm
| going to presume innocent until proven guilty.
|
| Rich people don't get that way by following the rules and we're
| right to be suspicious of them. They don't deserve the benefit
| of the doubt, because they haven't earned it.
| ddulaney wrote:
| If you read the article, you'll see that he has admitted guilt
| as a part of the deferred prosecution agreement.
|
| The thing that worries me is that he was able to use money to
| avoid prison. This is an example of a different law for the
| rich and everyone else -- paying a fine (not a big deal for a
| billionaire) to avoid prison (a very big deal for a
| billionaire) substantially reduces incentives to actually pay
| your taxes.
| sgpl wrote:
| This person admitted guilt and entered a non-prosecution
| agreement in which he agreed to help the government build a
| case against his former business associate.
|
| There was a WSJ article about him last year which went into
| detail that he agreed to obfuscate income for this former
| business associate in return for the funding he initially got
| to get Vista off the ground.
|
| Additionally, that WSJ article detailed that Robert Smith
| became aware of an investigation into him through back channels
| and that's the point when he started making a splash with
| public giving. I'll see if I dig up that article in case
| anyone's interested.
|
| "The other side" as you put it is him literally admitting
| guilt. He could have used his massive fortune to fight it, but
| he'd probably lose control of the firm + other consequences
| resulting from that.
|
| Edit: It was a Washington Post article, not WSJ
| (https://www.washingtonpost.com/business/2020/11/09/smith-
| bro...)
| vmception wrote:
| you could also try reading the article
|
| its clear you are reacting to the headline and were searching
| for a place to put that copypasta before this article even
| existed
| spamizbad wrote:
| He admitted guilt. Do you think the media should say "However,
| he might be lying about being guilty" to achieve some sort of
| weird "balance"?
| sgpl wrote:
| I replied to another comment with this story which has now been
| downvoted to oblivion, but I'd highly recommend another article
| on the topic from the washington post[1], it has a far better
| narrative (in my opinion).
|
| At the start of his career as a private equity investor, he got
| one of those offers he couldn't refuse, a billion dollar
| investment from a single source that came with some strings. When
| the strings came undone in the form of govt. investigation into
| the tax obfuscation, he tried to fix it by applying for a IRS
| program which was rejected. He then went 0 -> 100% on headline
| making philanthropy.
|
| Essentially he made a deal with the devil and came out of it
| without a scratch, relatively speaking. Perhaps came out ahead
| would be a better way of phrasing that. Obviously none of this
| takes away from the work/drive that went into making Vista
| successful, but it's still an interesting story of how he got his
| start.
|
| > _Brockman's offer set Smith up with his own private equity
| firm, Vista Equity Partners, and more than $1 billion in capital
| to invest, according to Smith's statement to prosecutors. That
| arrangement eventually allowed Smith to become a billionaire
| himself._
|
| _Both aspects stem from a deal Smith and Brockman made 20 years
| ago, one that joined the unlikely pair in a venture with vast
| ambitions. Smith, the determined son of Denver schoolteachers,
| was then an aspiring financier; Brockman was older and far
| wealthier, a man who had already made a fortune with a company
| that sold software for the automotive industry._
|
| _These two sides of Smith -- the impressive generosity on one
| and the admitted tax evasion on the other -- may be hard to
| reconcile. But they are inextricable, according to documents
| reviewed by The Washington Post, including charity filings with
| tax authorities and Justice Department court filings._
|
| _Smith applied for the IRS program in March 2014 but was quickly
| rejected. This is typically a sign the agency already is
| scrutinizing the applicant's tax filings, former federal
| prosecutors said._
|
| _It is about this time that Smith became a major philanthropist,
| frequently making headlines with his generosity._
|
| [1] https://www.washingtonpost.com/business/2020/11/09/smith-
| bro...
| steve76 wrote:
| There's such a thing as bad charities. This one just paid
| himself. But there are charities that are fronts for horrible
| evil behavior, turning a good dead into a fraudulent evil act. If
| you are going to police them, you're going to get the
| profiteering crooks too. Didn't know where he was at, as in most
| people go to these places to die, in a good way. Better to be
| poor.
| dukeofdoom wrote:
| China hangs its fallen oligarchs. Here you just buy off
| politicians and threaten media with lawsuits if they don't tow
| the line. Literally a reporter walked off set this week, because
| a guest strayed too far into lawsuit territory. And a voting
| machine company sued a politician for a Billion Dollars for
| disparaging its black box results. All in the last month. While I
| support everyone having their date in court. I think its safe to
| say that in the last year, millions of people both left and right
| have woken up to how politicized and crooked the justice system
| is.
| RHSeeger wrote:
| > And a voting machine company sued a politician for a Billion
| Dollars for disparaging its black box results.
|
| That's one way to phrase it. Another would be that a highly
| visible, influential politician used that influence to attempt
| to destroy a multi-billion dollar company; specifically by
| using what may well be lies and slander, presenting it as
| truth.
| dukeofdoom wrote:
| May or many not be, until we have discovery and actual third
| party audit.
|
| If corporations can decide which politicians to platform,
| count the votes, and can sue into bankruptcy politicians that
| question the results, than clearly power rests with the
| corporations and the oligarchs. Politicians are just for
| show.
|
| As a cynical citizen, I'm going to assume that if it wasn't
| possible to adjust the vote totals, their machines wouldn't
| have been picked. Responsibility for transparency is on them.
| Full third party audit, random vote sample statical analysis,
| and so on. Would be much more preferable to instil confidence
| in their corporation than suing a disgruntled politician.
| JumpCrisscross wrote:
| > _Barr signed off on a non-prosecution agreement...required
| Smith to admit he had committed crimes, pay $139 million and
| cooperate against a close business associate indicted in the
| largest tax-evasion case in U.S. history--Texas software mogul
| Robert T. Brockman_
|
| Prosecutorial discretion is a tricky thing to judge. On one hand,
| it's a black box. On the other hand, it has to be. It's a human
| judgement around which investigations are worth pursuing given
| the facts and circumstances, the law and the will of the polity.
|
| Within the confines of the rules, this looks...fine? It sounds
| like Smith was fined more than he aimed to save. And if it bags a
| bigger fish, particularly if with jail time, it seems like the
| trade would be worth it. At the very least it makes tax evasion
| riskier going forward--your billionaire co-conspirator is now a
| real liability.
|
| Without knowing the odds around that case, it's difficult to
| judge this decision.
| sgpl wrote:
| Is it tricky to judge though? I think the reason why such
| stories get more attention is because they shouldn't be decided
| inside a black box.
|
| This person admitted guilt, he also admitted that at the time
| he made the deal with Brockman he knew it was sketchy. He only
| tried to course correct when he knew he was being investigated.
|
| If this individual makes a mistake, I can understand the
| leniency but essentially he made a deal that he knew at the
| time to be wrong and knowingly kept defrauding the government
| till he couldn't anymore due to discovery, and essentially came
| out of it with not so much as a scratch, maybe some stress from
| all this. And he's continued to whitewash the narrative around
| this with 'philanthropy'.
|
| In my opinion it shouldn't be about him being fined more than
| he aimed to save. That essentially encourages others to strike
| similar bargains with other bad actors as the net result is the
| consequences are relatively small compared to the upside.
| jawns wrote:
| > It sounds like Smith was fined more than he aimed to save.
|
| That might be true in absolute terms, but saving the money _at
| the time_ likely enabled him to grow his wealth faster, putting
| him in a better position now, even accounting for repayment,
| than he otherwise would have been.
|
| Companies do this all the time when they take on debt. Having
| the money now, even if you need to repay it layer, lets you
| grow fast, and the longer you can put off repayment, the more
| you can compound your gains.
| chrisgd wrote:
| Given propublica's investigation into higher audit rates among
| the poor than the wealthy, I view this as a win. Keep moving in
| this direction and chase higher payouts with longer periods of
| nothing rather than volume
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