Re: CryptoAnarchy: What's wrong with this picture?

[Black Unicorn <unicorn@schloss.li>]

On Sat, 4 May 1996, Jordan Hayes wrote:

> 	From sandfort@crl.com Fri May  3 21:52:50 1996
> 
> 	At 11:31 AM 5/3/96 -0700, brerrabbit@alpha.c2.org wrote:
> 
> 	>Do tell.  How would someone, just for instance, who is considering
> 	>leaving a "permanent" job for the higher compensation available to
> 	>contractors and consultants be able to structure a business in such a
> 	>way as to benefit from these techniques?
> 
> 	2)  Take a vacation to a tax haven you like because of what
> 	    you've read about it.
> 
> I'm confused as to how "merely" putting your after-tax (you *will*
> declare this consulting revenue on your Schedule C, won't you?) bucks
> in an offshore account will "save" you money.  This only "works" if you
> are able to use what you've taken away to advantage; you may generate a
> tax "savings" on those gains.

Incorrect.  There are many options for after-tax funds (including
investing in offshore corporations with active business income derived
elsewhere, offshore mutual funds, offshore funds in general, and the
advantage of extremely high interest rates in some jurisdictions).

The real trick is to structure things to take advantage of pre-tax funds.
This is complex, but certainly possible.  Did you know, for example, that
foreign tax credits can offset U.S. source income and can be carried back 
two and forward 5 years?

> Oh, and it also only works if you are
> willing to expose yourself to being arrested at some point for tax
> evasion.

Incorrect.  There are many legitimate applications for placing funds
offshore that permit an individual to reduce his taxes legally.

> This is silly; there are legitimate reasons for structuring business
> efforts in other tax juristictions.  Avoiding income tax on your
> primary source income isn't one of them.

False.  Avoiding tax is as legal as the constitution.  You mean evading
tax by failing to file truthful returns or otherwise concealing income.

> My answer to the original question: save your $1k you'd send to Sandy
> for the "advice" (plus travel associated with finding your 'haven') and
> open a SEP.

Poor advice.  My advice to you, study tax a bit more carefully.

> /jordan

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