This DD, the billionaire boys club part 11 is the latest instalment in the series of citizen journalism attempting to uncover and expose the super wealthy, and particularly those involved in international finance. This episode is exposing how the rich don't spend their own money so they don't have to pay taxes.
Billionaire Boys Club Part 11 - Buy, Borrow, Die
AUTHORS DISCLAIMER: I am not a financial advisor, and I do not provide financial advice. Many thoughts here are my opinion, and others can be speculative.
Everything I am highlighting here is asking questions about publically available information and not an accusation of any wrongdoing of any parties mentioned.
DID YOU KNOW - BANKS OFFER TAX EVASION AS A SERVICE?
Ok Apes, in today’s episode of the BBC we will be looking at a whole new method of tax evasion.
Namely… spending other people’s money instead of your own so you don’t have to pay tax on it.
Let’s look at an example really quick…
Say I am a billionaire, and I want to go out on a night on the town.
An average night out for me, will cost me $100k (I’m a billionaire remember)
If I was to pay taxes like the regular Poories, that night out would cost me (Assuming 29.8% US average tax rate) $129,800
BUT…
If I was able to borrow that money from the Bank, (Who give me preferential Interest Rates, ONLY available to the SuperRich of under 1%) then the night out would only cost me $101,000
See how I just saved 28.8% or $28,800 on this one expenditure?
Now multiply that across ALL MY MONEY.
That’s one of the many ways I avoid taxes.
1% Interest Rate is ALOT better than 29.8% Tax Rate Right?
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BUT IT CAN’T BE THAT SIMPLE… CAN IT?
Not only is it that simple… it’s a FUCKING SERVICE offered by banks to the Ultra-Wealthy!!!
Credit Suisse sets up specific department to offer lending services to ultra-wealthy:
So let’s think about it for a minute…
Let’s pretend I’m Larry Ellison, the co-founder of Oracle.
I’m used to a certain standard of living and in fact am FAMOUS for my lavish lifestyle.
I collect Mansions, Yachts, Aircraft, Race Cars, and Art.
So how am I going to pay for all this expensive showboating?
Well Oracle makes lots of money, I could pay myself a massive amount of Salary…
But then I’d have to pay a metric shit tonne in Tax AND… my salary would be public information.
So let’s not do that…
I can’t SELL MY SHARES… because
1… I’d have to pay Capital Gains Tax on what I get
2… I risk scaring the market and thus devaluing my company.
3… I’d lose some control of my company!!
BUT I REALLY WANT MORE NEW BOATS???
So....
Instead, I will go to my FAVORITE bank, and ask them for a LOAN!!
I already give them GREAT business due to all my Enterprise Accounts so I’m sure they will give me a great interest rate (>1%) and I won’t have to pay ANY TAX ON THAT!
Ok… so how much do I need? Maybe $10 Billion? That should be enough for now.
So I’ll just use my Shares as collateral to get this loan…
Larry Ellison Has Secured $10 Billion Worth Of Credit For His Personal Spending
FUCKIN PUPPY BREAK!!
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Awww.... don't worry little guy... EVERYTHING IS GOING TO BE ALRIGHT!
It's not all doom and gloom... let's go for a WALKIES?
You know you LOVE a walkies!
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So how does this whole fucking thing work?BUY BORROW DIE
This is it Apes…
This is the CODE that the Super Rich and even Rich live by.
Lets break it down with an example shall we?
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So lets pretend again I’m a billionaire.>> BUY <<
I buy assets and assets only. But I can never sell these assets, otherwise, I would have to pay tax on them!
(Ever wonder why Billionaires need so many houses?)
These assets continue to appreciate in value, and I pay no tax on that appreciation until I sell.
But appreciation is no good to me by itself…
I NEED CASH!>> BORROW <<
So I borrow against these assets.
And as highlighted above, the banks LOVE this, so they give me EXTRA SPECIAL interest rates, usually under 1%. (Not available to the general public of course, because I'm special)
BUT BadassTrader, you may be thinking…
Don’t they still just have to pay back that loan?>> DIE <<
When I die, I can pass all these assets down to whoever I want… TAX FREE.
So I buy a house for $10 million
I borrow against that house over 30 years at 1% interest.
But the house continues to appreciate.
In 20 years, I die.
The house value is now $20 million due to appreciation.
My heirs inherit that house… sell it for $20 million… pay off my debt + 1% interest and are still left with $9.9 million in TAX-FREE inheritance.
And of course... I already spent my $10 million on whatever I wanted before I died...
Not bad eh?
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Wanna learn more about this BUY BORROW DIE???
For you smooth brain apes out there… here’s a nice explainer video with lots of pictures.0:001:52
For anyone looking to gain a few wrinkles, here is 2 CPAs laughing about how easy this is while teaching you exactly how to do it.
FUCKING PUPPY BREAK !!!!
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Awww... are you tired after a long day?
Of course you are! Good boy! You go for a nap there now and dream about bones and walkies!
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Ok, so now that we are all caught up on how this BUY BORROW DIE system works... who is actually fucking doing this shit?
(Well likely everyone... but let's look at some we know about!)
Well a widely cited article by ProPublica, states that they managed to obtain IRS tax records of some of the biggest Billionaires in the US.
And while this shows the FRACTIONAL tax these guys paid… it also cites how much debt some of these guys are in due to the BUY BORROW DIE strategy!
WE already talked about LARRY ELLISON and his $10 Billion Credit line back by his shares…
ELON MUSK - Last year Tesla reported that Musk had pledged some 92 million shares, which were worth about $57.7 billion as of May 29, 2021, as collateral for personal loans.
Wallstreet Journal Source Paywalled
CARL ICAHN:
In both 2016 and 2017, investor Carl Icahn, who ranks as the 40th-wealthiest American on the Forbes list, paid no federal income taxes despite reporting a total of $544 million in adjusted gross income (which the IRS defines as earnings minus items like student loan interest payments or alimony). Icahn had an outstanding loan of $1.2 billion with Bank of America among other loans, according to the IRS data. It was technically a mortgage because it was secured, at least in part, by Manhattan penthouse apartments and other properties.
Borrowing offers multiple benefits to Icahn: He gets huge tranches of cash to turbocharge his investment returns. Then he gets to deduct the interest from his taxes. In an interview, Icahn explained that he reports the profits and losses of his business empire on his personal taxes.
Icahn acknowledged that he is a “big borrower. I do borrow a lot of money.” Asked if he takes out loans also to lower his tax bill, Icahn said: “No, not at all. My borrowing is to win. I enjoy the competition. I enjoy winning.”
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Some of the ways to run this BUY BORROW DIE
- Shares (The companies they own type)
- Non-Dividend Paying Stocks (The investing kind)
- Property (Lots of Mansions + Commercial Property)
- Art (Fuckin Art - Looking at you Kenny)
- Life Insurance (YES… fuckin LIFE INSURANCE!!)
- Sports Teams (Owners get better tax rates than players)
And I’m sure there are a ton more that my smooth brain can’t even imagine.
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WANNA GAIN SOME REAL BIG THICK WRINKLES ON THIS SUBJECT??
The University of Southern California Tax Law Professor Edward McCaffrey Did a FULL RESEARCH PAPER on this topic and called it
THE DEATH OF INCOME TAX (OR, THE RISE OF AMERICA’S UNIVERSAL WAGE TAX
Apes this is basically a peer-reviewed study of how the whole fucking system is rigged against us. Worth taking a read when you have some spare time.
FUCKING PUPPY BREAK!!!
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Look at this little fella... he's asleep on the door handle...
Must be exhausted!
AWWWwwww.....
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NOW REMEMBER EVERYTHING I HAVE BEEN RANTING ON ABOUT IN THIS BBC SERIES?
Charities and funds?
READ THIS SHIT...
The notion of dying as a tax benefit seems paradoxical. Normally when someone sells an asset, even a minute before they die, they owe 20% capital gains tax. But at death, that changes. Any capital gains till that moment are not taxed. This allows the ultrarich and their heirs to avoid paying billions in taxes. The “step-up in basis” is widely recognized by experts across the political spectrum as a flaw in the code.
Then comes the estate tax, which, at 40%, is among the highest in the federal code. This tax is supposed to give the government one last chance to get a piece of all those unrealized gains and other assets the wealthiest Americans accumulate over their lifetimes.
It’s clear, though, from aggregate IRS data, tax research and what little trickles into the public arena about estate planning of the wealthy that they can readily escape turning over almost half of the value of their estates. Many of the richest create foundations for philanthropic giving, which provide large charitable tax deductions during their lifetimes and bypass the estate tax when they die.
Wealth managers offer clients a range of opaque and complicated trusts that allow the wealthiest Americans to give large sums to their heirs without paying estate taxes. The IRS data obtained by ProPublica gives some insight into the ultrawealthy’s estate planning, showing hundreds of these trusts.
The result is that large fortunes can pass largely intact from one generation to the next. Of the 25 richest people in America today, about a quarter are heirs: three are Waltons, two are scions of the Mars candy fortune and one is the son of Estée Lauder.
And here's an article detailing SOME examples of over $100 billion in documented Wealth Estate Tax Breaks.
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So that's it Apes...
The mystery is solved!
These 3 little words are the code to how Billionaires pay fractional taxes
The code to why top CEOs only pay themselves $1 in salary a year
The code to why Banks love Billionaires SO MUCH
The code to why JPMorgan Chase, BofA, Citigroup and Morgan Stanley dole out $600 Billion a quarter in loans to the super-rich
The code to why these personal loans to the 0.1% make up 22.5% of all bank loans
The code to why JPMorgan and City now LOAN more to the Super-Rich than ALL THEIR CREDIT CARD CUSTOMERS COMBINED!
(Source)
BUY BORROW DIE
The entire series is listed below:
| Part 1: Is this the final boss? | Read On Hive |
| Part 2: The Inner Circle | Read On Hive |
| Part 3: The Big Boys | Read On Hive |
| Part 4: Recess is over | Read On Hive |
| Part 5: Foundational Strategy | Read On Hive |
| Part 6: Smile for the Camera, Kenny | Read On Hive |
| Part 7: What DAF F**k is This? | Read On Hive |
| Part 8: The Chips are Stacked Against Us | Read On Hive |
| Part 9: Steve Cohen | Read On Hive |
| Part 10: Vacation of a lifetime | Read On Hive |
| Part 10.2: Cayman Island Getaway | Read On Hive |
| Part 11: Buy Borrow Die | Read On Hive |
| Part 12: Specialized Purpose Entities | Read On Hive |
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