Author Topic: Bloomberg: George Soros hasn't paid taxes since 2008; owes $7 billion  (Read 8306 times)

Sid Hoffman

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This blows me away how people can be so incredibly wealthy, campaign for someone like Obama by saying that taxes need to be raised for everyone including the rich, but then it turns out he hasn't paid his own taxes since 2008 and honestly wasn't paying his taxes even before that because he was exploiting a tax loophole.  I think the guy is just planning on dying before he pays his taxes and fighting it on the basis that he claims it's Irish money, not American money.

http://www.bloomberg.com/news/articles/2015-04-30/george-soros-s-tax-bill

Quote
George Soros likes to say the rich should pay more taxes. A substantial part of his wealth, though, comes from delaying them. While building a record as one of the world’s greatest investors, the 84-year-old billionaire used a loophole that allowed him to defer taxes on fees paid by clients and reinvest them in his fund, where they continued to grow tax-free. At the end of 2013, Soros—through Soros Fund Management—had amassed $13.3 billion through the use of deferrals, according to Irish regulatory filings by Soros.

Congress closed the loophole in 2008 and ordered hedge fund managers who used it to pay the accumulated taxes by 2017. A New York-based money manager such as Soros would be subject to a federal rate of 39.6 percent, combined state and city levies totaling 12 percent, and an additional 3.8 percent tax on investment income to pay for Obamacare, according to Andrew Needham, a tax partner at Cravath, Swaine & Moore. Applying those rates to Soros’s deferred income would create a tax bill of $6.7 billion. That calculation is based on publicly available information such as the Irish regulatory filings, which provide only a partial glimpse into Soros’s finances. The actual tax bill would be affected by factors specific to the billionaire. Soros declined to comment, according to Michael Vachon, a spokesman, as did Anthony Burke, an IRS spokesman.

Just before Congress closed the loophole, Soros transferred assets to Ireland—a country seen by some at the time as a possible refuge from the law. The filings show for the first time the extent to which Soros’s almost $30 billion fortune—he ranks 23rd on the Bloomberg Billionaires Index—came from finding ways to delay taxes and reinvesting the money in his fund.

... story continued in link


dividendman

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I find it hard to begrudge anyone legally avoiding taxes, as I seek to do this to my maximum benefit as well. Even if they preach that overall taxes should be higher, you can't ask people to play by rules that aren't yet in place.

gimp

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This is a bullshit title.

George Soros has found a way to delay paying taxes on certain income for a long time; will likely have to pay as much as $7B in 2017.

Very different from

"Billionaire didn't pay taxes and now owes back-taxes"

even if the latter can be a summary of the former, it's not an honest summary.

MikeBear

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This blows me away how people can be so incredibly wealthy, campaign for someone like Obama by saying that taxes need to be raised for everyone including the rich, but then it turns out he hasn't paid his own taxes since 2008 and honestly wasn't paying his taxes even before that because he was exploiting a tax loophole.  I think the guy is just planning on dying before he pays his taxes and fighting it on the basis that he claims it's Irish money, not American money.

http://www.bloomberg.com/news/articles/2015-04-30/george-soros-s-tax-bill

Quote
George Soros likes to say the rich should pay more taxes. A substantial part of his wealth, though, comes from delaying them. While building a record as one of the world’s greatest investors, the 84-year-old billionaire used a loophole that allowed him to defer taxes on fees paid by clients and reinvest them in his fund, where they continued to grow tax-free. At the end of 2013, Soros—through Soros Fund Management—had amassed $13.3 billion through the use of deferrals, according to Irish regulatory filings by Soros.

Congress closed the loophole in 2008 and ordered hedge fund managers who used it to pay the accumulated taxes by 2017. A New York-based money manager such as Soros would be subject to a federal rate of 39.6 percent, combined state and city levies totaling 12 percent, and an additional 3.8 percent tax on investment income to pay for Obamacare, according to Andrew Needham, a tax partner at Cravath, Swaine & Moore. Applying those rates to Soros’s deferred income would create a tax bill of $6.7 billion. That calculation is based on publicly available information such as the Irish regulatory filings, which provide only a partial glimpse into Soros’s finances. The actual tax bill would be affected by factors specific to the billionaire. Soros declined to comment, according to Michael Vachon, a spokesman, as did Anthony Burke, an IRS spokesman.

Just before Congress closed the loophole, Soros transferred assets to Ireland—a country seen by some at the time as a possible refuge from the law. The filings show for the first time the extent to which Soros’s almost $30 billion fortune—he ranks 23rd on the Bloomberg Billionaires Index—came from finding ways to delay taxes and reinvesting the money in his fund.

... story continued in link



Outer Limits 1963 original. Coincidence? I think not!


bacchi

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This is similar to what the tech companies have been doing for years. That loophole was closed late last year.

Hey It's Me

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Deferring taxes is nothing new - it's what we all do with 401(k)s. And it makes sense for him to defer paying taxes until the final moment when they're due, as long as the returns he's getting from that money outweigh any fees he has to pay.

That said, does this make him a hypocrite if his stance is that the rich should pay more in taxes? Hell to the yeah...

MgoSam

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I honestly hate this topic. Is it that hard to understand that someone can be saying that tax rates should be higher, and meanwhile they are paying the current tax rate and not a penny more? When Warren Buffet said that his tax rate was too low, the republican response was to make it possible for people to pay more than what is required, and then started calling him a hypocrite for not doing so.

I believe that if all loopholes were closed, the economy would be better, but I don't make the rules.

Bob W

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If we went to a full "Inflation Tax" vs. the current partial one it would end all this silliness.

A full "Inflation Tax"  is simply when Congress prints all the money it budgets each year.   They don't "borrow" it,  simply print it.  The price of some goods and services may go up for everyone.   

It eliminates the need for the IRS,  tax accountants,  tax sheltered accounts,  inheritance tax etc..  It also eliminates the need for the feds to have any financial information about you and allows you to remain private in your papers and dealings. 

A full inflation tax also has the impact of negating all these clever tax work arounds  that people have devised and it applies fully to the underground economy.   

There is no escaping an inflation tax by anyone so there is a rather equal distribution. 

Sid Hoffman

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I honestly hate this topic. Is it that hard to understand that someone can be saying that tax rates should be higher, and meanwhile they are paying the current tax rate and not a penny more?

You say "they are paying the current tax rate" but the article says otherwise.  Somebody else said it was a loophole only just closed last year, but again, the article says 2008.  We're talking about somebody who is NOT paying their taxes, and hasn't paid taxes since 2008 and instead keeps deferring it year after year.  It is NOT like your 401k, because your 401k has an $18,000/year limit.  He's been putting away billions tax free.  I don't get it; why does everyone seem to think that living in a developed nation is cool, but nobody wants those who are most able to pay taxes to actually pay taxes?  Is this thread full of right-wing numbnuts who think that the poor are the ones who need to pay for everything, and that's why rich guys like themselves and George Soros need to get off without paying taxes?  This baffles me.  I've never seen so many people who are actively, hatefully, and intensely arguing against making a rich New Yorker pay back taxes.

There is no escaping an inflation tax by anyone so there is a rather equal distribution.

That would be regressive taxation, as it hits the poor harder than anyone else.  I've noticed that the rich are always huge fans of taxes that affect the poor more than themselves, and an inflationary tax system would be the same as a flat tax and so many other tax schemes: the poor pay for it the most while the rich figure out ways around it.

MgoSam

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I honestly hate this topic. Is it that hard to understand that someone can be saying that tax rates should be higher, and meanwhile they are paying the current tax rate and not a penny more?

You say "they are paying the current tax rate" but the article says otherwise.  Somebody else said it was a loophole only just closed last year, but again, the article says 2008.  We're talking about somebody who is NOT paying their taxes, and hasn't paid taxes since 2008 and instead keeps deferring it year after year.  It is NOT like your 401k, because your 401k has an $18,000/year limit.  He's been putting away billions tax free.  I don't get it; why does everyone seem to think that living in a developed nation is cool, but nobody wants those who are most able to pay taxes to actually pay taxes?  Is this thread full of right-wing numbnuts who think that the poor are the ones who need to pay for everything, and that's why rich guys like themselves and George Soros need to get off without paying taxes?  This baffles me.  I've never seen so many people who are actively, hatefully, and intensely arguing against making a rich New Yorker pay back taxes.

I'm actually left-of-center, but my dislike of this topic is that it was framed under the "he wants people to pay taxes but personally doesn't."

I absolutely agree that loopholes should be eliminated and if everyone were to pay taxes on their earnings, the country and the economy would be a far better place. That said, if I as a businessman can legally avoid paying taxes, then why would I? Why should I? This would hurt me and might make me less competitive if my competitors aren't paying the same taxes as they have more money to invest.

Captain_Burrito_Pants

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How many of you purposely pay more taxes than you're required to?


jrmrjnck

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If we went to a full "Inflation Tax" vs. the current partial one it would end all this silliness.

A full "Inflation Tax"  is simply when Congress prints all the money it budgets each year.   They don't "borrow" it,  simply print it.  The price of some goods and services may go up for everyone.   

It eliminates the need for the IRS,  tax accountants,  tax sheltered accounts,  inheritance tax etc..  It also eliminates the need for the feds to have any financial information about you and allows you to remain private in your papers and dealings. 

A full inflation tax also has the impact of negating all these clever tax work arounds  that people have devised and it applies fully to the underground economy.   

There is no escaping an inflation tax by anyone so there is a rather equal distribution.

Is this a serious proposal? It seems like people would simply ignore the quickly depreciating FedBux and switch to a more stable currency.

zephyr911

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Any and all retorts to advocates of progressive tax structures, or other similar proposals, that involve advising the proponents to voluntarily pay extra, are stupid.

This also happened when Warren Buffett made public statements about his effective tax rate being lower than his secretary's. "Hey Warren, pay extra if you don't like it". Paying extra misses the point and doesn't solve shit. Buffett, or Soros, could give their whole income, could give their entire net worth, and it wouldn't address the structural problems they are trying to explain to the public.

You're talking about a guy who has given away more money to causes that will never benefit him, than most of us will ever see in our lives. He deferred a lot of income for a long time - completely legal - and by all accounts is making no effort to avoid the bill now that the law has changed. Much ado about nothing.

beltim

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I honestly hate this topic. Is it that hard to understand that someone can be saying that tax rates should be higher, and meanwhile they are paying the current tax rate and not a penny more?

You say "they are paying the current tax rate" but the article says otherwise.  Somebody else said it was a loophole only just closed last year, but again, the article says 2008.  We're talking about somebody who is NOT paying their taxes, and hasn't paid taxes since 2008 and instead keeps deferring it year after year. 

No, that's not what the article says.  The article says,
Quote
George Soros may owe at least $6.7 billion in federal, state, and local taxes on income he deferred and reinvested in his fund.  ==>
Theoretically, a hedge fund manager with Soro's record who started with $12 million, didn't take in more money, and reinvested his share of profits pretax, would have $15.9b after 40 years.

The article is based on a theoretical calculation of what his taxes could be.

Elsewhere, it talks about how Soros moved money to Ireland to avoid paying deferred taxes.  But the article says "Most, if not all, of the notes [the tax free profits distributed by the Soros Ireland subsidiary] were held by Soros's tax-exempt Open Society Foundations."

Then, in the conclusion, the article says, "at least four tax attorneys say they know of no way for money managers to avoid the bill that comes due in 2017."

This is a lot of theoretical sturm und drang over a bill that isn't even due for two years.  There's no support in the article to say that Soros hasn't paid taxes since 2008.  The only support for the $7 billion in taxes owed is a theoretical calculation done by Bloomberg as clickbait. 

Look, there's no doubt that Soros exploited a loophole.  Fortunately, that loophole was closed.  The tax bill for the closing of that loophole isn't due yet.  Come back to us in 2017 if Soros doesn't pay the appropriate tax bill, but in the meantime, there's no proof at all that he isn't following the law.

Sid Hoffman

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You're talking about a guy who has given away more money to causes that will never benefit him, than most of us will ever see in our lives. He deferred a lot of income for a long time - completely legal - and by all accounts is making no effort to avoid the bill now that the law has changed. Much ado about nothing.

I started looking into this.  Actually it seems Soros gives to political bodies that lobby to change the policy of US law directly to benefit himself.  He doesn't donate to charity like Gates, he donates to political activist groups that shape laws to be personally beneficial to himself.

Also, it's ridiculous to compare a BILLIONAIRE to any normal person.  I see comments about "Would YOU pay extra tax?"  No, because I'm not a billionaire, and I'm not even close to financially independent like the billionaires who pay to get laws made that benefit themselves.  This is a structural problem of the nation when the richest get to make the donations to elect the bought politicians who make laws to the benefit of the ones who paid to put them in office.

grantmeaname

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Interesting. So if you were a billionaire you would give the federal government all of your money in voluntary taxes?

grantmeaname

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This is similar to what the tech companies have been doing for years. That loophole was closed late last year.
1) Inversion transactions are not very much like this at all, and they're definitely still possible.

2) By "loophole" do you mean the fact that non-US persons are not subject to US laws? Because that's not a loophole.

gimp

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If I were a billionaire, I would do everything legal to pay the fewest taxes possible, even if I felt the methods used should be closed off and/or the marginal rate raised. Why part with money you don't have to?

bacchi

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This is similar to what the tech companies have been doing for years. That loophole was closed late last year.
1) Inversion transactions are not very much like this at all, and they're definitely still possible.

2) By "loophole" do you mean the fact that non-US persons are not subject to US laws? Because that's not a loophole.

1) I meant the double Irish, not an inversion.

As far as being similar, obviously the mechanics are vastly different but the intent is the same -- a way to move profits from a higher-tax to a lower-tax country. In this case, Soros only defers taxes.

2) No, the loophole refers to the first sentence, where I mention tech companies.

grantmeaname

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I guess I just don't see how those have anything other than Ireland in common. The effect is the same but they're not really similar techniques.

bacchi

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I guess I just don't see how those have anything other than Ireland in common. The effect is the same but they're not really similar techniques.

True enough. From a 30,000' view, they have a similar purpose. With any examination, they're very different.

grantmeaname

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I guess from a journalist's or citizen's perspective there's more in common than different. As a tax accountant I'm coming at it from the opposite direction so the differences in form are starker than the similarities in effect.

LalsConstant

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If we went to a full "Inflation Tax" vs. the current partial one it would end all this silliness.

A full "Inflation Tax"  is simply when Congress prints all the money it budgets each year.   They don't "borrow" it,  simply print it.  The price of some goods and services may go up for everyone.   

It eliminates the need for the IRS,  tax accountants,  tax sheltered accounts,  inheritance tax etc..  It also eliminates the need for the feds to have any financial information about you and allows you to remain private in your papers and dealings. 

A full inflation tax also has the impact of negating all these clever tax work arounds  that people have devised and it applies fully to the underground economy.   

There is no escaping an inflation tax by anyone so there is a rather equal distribution.

Is this a serious proposal? It seems like people would simply ignore the quickly depreciating FedBux and switch to a more stable currency.

Not saying I agree with the proposal but as long as the government demands taxes be paid in currency and not say gold or something that wouldn't be an issue.

Our money quickly loses value now and it's still the default global reserve currency.

zephyr911

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I started looking into this.  Actually it seems Soros gives to political bodies that lobby to change the policy of US law directly to benefit himself.  He doesn't donate to charity like Gates, he donates to political activist groups that shape laws to be personally beneficial to himself.
I am neither a personal fan of Soros nor a party loyalist to the politicians he sides with, so I'm not just saying this for emotional reasons: I am struggling to find support for your statement amongst the publicly available information.

A billionaire with an involvement in politics seeking to simply further enrich himself would be expected to lobby for reduced corporate regulations, a flatter tax structure, weaker labor laws, and less transparency in politics. Yet it would appear he has done the opposite.