For Goldman Sachs execs, momentarily working for the government means hundreds of millions in tax savings


#1

Originally published at: https://boingboing.net/2018/03/19/hectabucks-for-nothing.html


#2

“We don’t pay taxes. Only the little people pay taxes.”


#3

I would guess that the next step is to never fully cash out these assets (and pay taxes) but instead to borrow against them in perpetuity thus giving you access to cash as if you did receive the funds and also skipping pesky taxes.


#4

A good example of unintended consequences. The stated intention of this rule is that since high level government executives are forced to divest themselves of conflicts of interest, perhaps they shouldn’t be “punished” by forcing them to get a huge tax bill if they were getting a government job. But really…How is paying taxes NOW on capital gains accrued over a long period of time a “punishment”?


#5

I know, right? Almost sounds like a law made up by… corrupt politicians.


#6

Fucksake.

In 1940 Bill Knudsen was president of GM, when Pres Roosevelt asked him to leave GM to head the Office of Production management. Do you know how much Knudsen was paid? $1 per annum.

A number of other execs leading other high profile businesses also worked for government at about the same time under the same arrangement. They didn’t need inducements to go work for the government, working for the government was the inducement.


#7

To be fair, there WERE people that expressed concern about the conflicts of interest for FDR’s $1-a-year men.

Also: I suppose that to an extant, deferring taxes on capital gains means greater returns through the magic of compound interest. Realistically, only paying capital gains when an asset is sold makes sense because for many assets assigning a value to an asset when it hasn’t been sold is difficult and would therefore be fraud-tastic. I just don’t think that giving away a free basis change makes much sense.


#8

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