Topic: why super rich pay no tax but suggest giving all their wealth away (eventually) (Read 415 times)

I again agree with franky1 on this. Many people are not clear about the difference, I see it constantly on this and other forums, they think that tax avoidance and tax evasion are the same thing, when they are not and they would do very well to learn the difference and practice tax avoidance to the best of their ability.

when you use an CEX you relinquish your btc to get fiat
when you give yourself a 'personal loan' via some (buyer) person writing up the (swap) deal as a loan. (theres more finer details than this, im oversimplifying)
you again relinquish the BTC as collateral by purposefully defaulting to the (buyer) loaner on the day you receive the fiat.

loan vs exchange.. same end result. just treated differently for tax purposes..
your not suppose to have borrowers repay over time..

alot of people think btc=btc and dollar=dollar where all currency is fungible and treated the same.. its not
when you receive a gift/loan. no tax. but if you receive the same amount via other means its taxed differently

EG a retailer receiving fiat from customers is not paying cap gains. but corporation tax, sales tax.
an employee vs a sub-contractor receives funds under different tax codes
a treasurer of a trust/foundation receives different treatment compared to others

did you know that if you loan yourself (from your online persona) to your offline life.. your online persona can write-off the deal because you are both loaner and loanee. there wont be any conflict of anyone chasing you for repayments

many rich/elite transfer property/assets as collateral for loans. with no intent to make ongoing repayments. as long as there is no conflict between the parties to need to take it to court. there is no problem. so if you are on both sides of the deal on the paper. there is no conflict

you just have to learn the fine details to do the deal correctly

avoidance not evasion
its not so much the wealth getting away with it. its more so that average joe minimum wage income dont pay much tax to see the worth in learning these techniques.. especially if they are on some national employer pay scheme that auto deducts tax before putting it into employees account. most people think they have no choice..or think its too much of an effort

however bitcoin open up the choice

Franky1, I see exactly where you're coming from and if I thought the US government wouldn't figure out what was really happening, would let it slide, or otherwise wouldn't put the ol' kaybosh on it, it'd be a friggin' excellent idea.  But when you're running a loan service and none of the borrowers are repaying you--and, most importantly, when it's a fiat<-->BTC conversion--you'd better believe it isn't going to last for long.  Not with the scrutiny crypto is under right now, and probably not even if it weren't.

But yep, the wealthy can and do get away with tax evasion all the time.  They've had that shit mastered since the beginning of taxation, I'd imagine.

Billionaires declaring all of their wealth is for charity, is the biggest scam of modern times. The best example is Bill Gates (founder of Microsoft). This guy never pays any tax, because he has transferred all of his wealth to the Bill & Melinda Gates Foundation (BMGF). The trust claims that their target is to make the world a better place to live, by fighting against infectious diseases and natural calamities. But a large part of the expenses came from "speaking fee" and other forms of legalized bribes provided to various political figures.

In my case I do, but I also believe that some of the budget is spent unnecessarily and some of it is spent to buy votes. That's not even counting corruption. But whatever your opinion on the matter, tax avoidance is legal and should not cause any moral dilemma.

The "paying taxes" part is basically a bit of a moral dilemma. The point is that, do you really trust the government enough that when you pay your taxes you end up with actually giving the world something?

Or are you just making some politicians richer? In my nation, the taxes are taken from people and goes into the pockets of the politicians and their families, so paying taxes is not helping the nation at all. Sure, they do use some of it, maybe even most of it, on people, but they take a huge billions of dollars worth chunk out of it every year to make each other richer. So if you reject paying taxes, and instead use that money to donate to charity, that is not really all that bad and should be something that can benefit people.

what im saying is.. dont limit the options or limit your education

some people who currently use CEX and want to avoid the KYC/tax man intrusion can use other services where end result is fiat in pocket after handing over assets(as cex end game is) but done so in a legally way to avoid taxes by not being an exchanger, but instead a 'loan offer"

other ways are using defi where you use decentralised services to offer your offline personal life a loan from your online persona

use all the other ways too like trusts, foundations, etc
EG the most simplest formation of a trust for bitcoin is simply multisig.. thats it

learn from the super fiat rich about all their methods of tax avoidance and 'temporary cashflow' methods

I think franky1 is right on this. There is a Spanish guy who has been popularising (legal) tax avoidance as a method of paying as little tax as possible, which we have discussed in the local forum.

https://www.cryptospainoficial.com

He also has a YouTube channel and has simply made available to everyone, largely using cryptocurrencies, methods that previously only the wealthy could use to avoid paying taxes.

I just imagine how this will be done in a decentralize manner but can't figure it out and I hope you aren't suggesting we should use a centralized service because it goes against the whole point of adopting Bitcoin in regards to avoiding restrictions from centralized services. If doing this is going to make us give up our privacy to those centralized services because obviously they'll demand KYC verification from us and who knows, they might probably rat us out to the authorities when they get called for questions. There's nothing bad with doing your civil rights of paying taxes to the government. Just because the rich are doing it doesn't mean we have to because that isn't what made them rich. Are the government eating the taxes, no they're using it to run the affairs of the state and for those of you in a well governed states you guys are lucky because I'll pay more to get a lifestyle that's a quarter to what you're enjoying from your government.


When I do get rich, I'll do everything in my power to provide for the society and paying my taxes is one of those things, you know what's funny, avoid taxes won't make you wealth or poor, those would will be rich will still be rich even after paying all the taxes so why should we go through all this to avoid paying the tax when we'll still leave all the wealth behind some day when we're no more. Paying of taxes is our way of contributing to the society as those taxe are some of the funds that the government use in paying public servant like the fire fighters and cleaners that keep our street clean. Also the law enforcement officers that protect us against crime in the society and so on.

They are just a bunch of assholes who are evading tax because because they think they are exempted from the law, but they are not. They are just too confident because they have a lot of money which they can control someone powerful to protect them from the law, which is possible.

A YouTuber here in my country deleted their YouTube channel with over a million subscribers so that they can avoid paying their taxes, and after a while, they just build a new YouTube channel, imagine that, lol. People who avoid paying taxes are the greedy one, who don't want to pay for their responsibility as a certain individual who makes a lot of money or the taxes in their country is taking too much.

Education is probably the main thing, but it surely isn't the only thing that matters. In the first place, an ordinary person cannot easily learn the twists and turns of how specific sections or provisions of particular laws or processes can be used to come up with minimal or even zero taxes. That's something that's carefully learned over time.

Also, when you do things yourself, there's a tendency that people from the tax department or other government offices will be strict on you regarding the rules and fees and all. But when you pay fixers, for example, everything seems easy and smooth and cheap.

I'm certainly lucky that my country doesn't have efficient tax policies and implementation as regards Bitcoin or crypto or taxation in general. I'm not declaring any crypto assets and I feel like I'm not worried at all that one day they would come knocking on my door about it.

it is "available" you just have to KNOW how

education is the issue. and when we are cashing out when bitcoin spikes. we too will suddenly see the benefit of learning and accessing this knowledge when the tax expense becomes more than the tax free allowance. where its suddenly worth learning this stuff.

this is where tax accountants and lawyers can offer services.. not just for tax. but for trusts/foundations.. and loans
some people may even want to use their own energy to learn for themselves to avoid needing to pay accountants/lawyers

for those thinking its not worth it. are usually those playing with small amount of sats, where any gains are still within a tax free allowance.. but those that are concerned about tax will be concerned to minimise their tax expense

Tax avoidance is completely legal. The problem, however, is that this is something that is not easily available to ordinary folks. The rich have all the high-caliber accountants and lawyers to make sure their evasion only appears as a simple case of avoidance. Not to mention that the law has always been lenient to the rich and powerful. It has always been generous and tolerant to the elites. As a matter of fact, tax laws, policies, and regulations are always tailored for them.

ok people.. look deeper into how the rich do it

did you know the rich give themselves a personal loan
yep thats right they loan money to themselves(no central authority)

many politicians have revealed it
one example in the UK
https://www.theguardian.com/politics/2021/dec/22/jacob-rees-mogg-cleared-of-wrongdoing-over-6m-in-cheap-loans

he bought a house, furnished it. but did not pay tax, nor did he have to declare it as earnings

so its not about putting funds into a centralised thing. its about learning tax law and using its loopholes

.. look at the clintons. they put funds into their clinton foundation(a donation to. rather than earnings from) then spend it as business expense. thus avoid taxes

the question you should all be asking is. instead of using a CEX, how can people get hold of fiat without declaring it as earnings/profits

Basically its because rich people know they way around laws and taxes, or they hire professionals on how to do it. If you are a registered tax payer, you actually have the benefits of optimizing tax avoidance and thats legal. But there are really professionals who risk their integrity for money. Like regardless of how illegal things can be, as long as there is huge money involve, they will find a way of tax evasion

Yeah well, if you had read six comments back you would have seen that it is:



I think along similar lines.



I think it's 50% maximum that's why I think you have to do it only with a small part of your holdings so if you get a margin call you can give more as collateral.

Isn't this kind of service already available to Bitcoin owners? If I'm not mistaken, there are already crypto banks or crypto lending platforms which offer loans to Bitcoin owners if they are willing to send them as collateral. That's even happening in this forum. But the problem with marrying this kind of traditional financial service to Bitcoin being a new technology is that it somehow betrays the spirit of Bitcoin. Your Bitcoin isn't anymore under your control and the platform from which you borrow money could run away with it. Yeah, you got cash, but only around 25% to 50% of your Bitcoin's worth? Isn't this what happened to BlockFi?

Anyway, should Bitcoin adjust to this unfair taxing system or should this unfair taxing system be restructured instead?

life is a race for people that want to achieve greater heights and have ambition, its not a race for those who want to feel grateful for the little thing in life which arguably makes one's life colourful without the need to be excessive about money in some ways.
but I would argue that its everyone dream to be independent financially or in other words rich. its not the money that people sought after, its the freedom that we get after achieveing the financial independence.
but when it comes with rich people I guess, they just wanna be at the top achieving great things, there's reason why these billionaires keep buying new company and creates more.

So, the saying is not really true? That life is not a race but maybe for the rich people only because for the poor's, they are the ones who are mostly chill. Yes it is difficult to be rich and climb the rankings of the most wealthiest person in the world. Maybe this makes them love it because they can get a sense of achievement once they get successful. Maybe they can die with loads of money but I believe someone can still carry their wealth. So don't worry.

There are still wealthy people who are kind to other people, especially to the poor. Maybe some government has to do with the issue if they are also corrupt because they can accept bribes from these rich people.

I would say in order to do that you need a centralized authority to make it happen, and that is what we dislike in the crypto world. You need that credit union or loan company, and they would have all the power and there is no need for that.

How do you think that Elon Musk bought twitter? He didn't spend a dime of his money, he has stocks at tesla right? Is he getting taxed on that stock? Of course not, it is an unrealized gain and could drop in value, so how did he pay? He went to people asking for loan, and he put up his stocks as collateral to get that loan, then he used that loan to get twitter, so he didn't spend a dime out of his own pocket to get it, he just used his already existing non-taxed stocks to buy it.

In the end, we would need banks  to make this work, and we need people who would be legit using collateral, we can't really have that in crypto, what if the person declines to pay it back? Then you need centralized figure to collect the money.