The NYT has a long investigative piece explaining the procedures deployed by the Estee Lauder heirs to "shelter" their income from tax, such as donating millions of dollars' worth of art to their own charitable trusts, then taking a gigantic tax write-off.
Estée Lauder Companies went public in 1995, and Ronald Lauder and his mother cashed in hundreds of millions of dollars in stock but managed to sidestep paying tens of millions in federal capital gains taxes by using a hedging technique known as shorting against the box.
Together, Mr. Lauder and his mother borrowed 13.8 million shares of company stock from relatives and sold them to the public during the offering at $26 a share. Selling borrowed shares in this way is referred to as a short position. Since the Lauders retained their own shares, the maneuver allowed them to have a neutral position in the stock, not subject to price swings. Under I.R.S. rules at the time, they avoided paying as much as $95 million in capital gains taxes that might otherwise have been due had they sold their own shares...
“There’s real truth to the idea that the tax code for the 1 percent is different from the tax code for the 99 percent,” said Victor Fleischer, a law professor at the University of Colorado. “Any taxpayer lucky enough to have appreciated property is usually put to a choice: cash out and pay some tax, or hold the property and risk the vagaries of the market. Only the truly rich can use derivatives to get the best of both worlds — lots of cash and very little risk.”
A Family’s Billions, Artfully Sheltered
(via Beth Pratt)
The Chinese government’s wish-list for AI researchers is pretty ambitious: “Breakthroughs should be made in basic theories of AI, such as big data intelligence, multimedia aware computing, human-machine hybrid intelligence, swarm intelligence and automated decision-making.”
Robbo writes, “A number of so-called scientific journals have accepted a Star Wars-themed spoof paper. The manuscript is an absurd mess of factual errors, plagiarism and movie quotes. We know this because Neuroskeptic wrote it and posted about it on the Discover Magazine site. The paper was about Midi-chlorians and attributed to Dr Lucas McGeorge […]
As I wrote about last month, the hotelier who operates the Toronto property bearing Trump’s name was desperate enough to get shut of it that they had bid millions for the right to change the name of the hotel.
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