<story><title>How Billionaire Robert Smith Avoided Indictment in Multimillion-Dollar Tax Case</title><url>https://www.bloomberg.com/news/features/2021-02-03/how-billionaire-robert-smith-avoided-indictment-in-multimillion-dollar-tax-case</url></story><parent_chain><item><author>lisper</author><text>There are four differences.  First, the IRS prosecutes a lot more low-income people than high-income people (by percentage as well as by absolute numbers) so a billionaire has much better odds of not getting caught.  Second, billionaires have access to better layers, accountants, publicists and politicians to give them negotiating leverage if they do get caught.  Third, the payoff for a billionaire successfully cheating on their taxes is much higher than for a non-billionaire.  And finally, even if a billionaire does get caught and pays all their back-taxes with penalties, they will still most likely be a billionaire and be able to sustain a pretty posh lifestyle.  So the expected value of the tax-cheating lottery is much higher for a billionaire than a normal person.</text></item><item><author>modeless</author><text>My understanding is that if a little guy evades taxes, but then cooperates with the IRS when caught, and agrees to pay all taxes and interest and penalties, then they generally don&amp;#x27;t get thrown in jail and have all their other money and possessions and responsibilities taken away, as this article seems to imply they should do with billionaires.&lt;p&gt;I don&amp;#x27;t see how this is evidence of special treatment for billionaires. The guy paid way more in penalties than he saved on taxes and also had to help prosecute his friend, who evaded way more tax than he did. It doesn&amp;#x27;t seem to me like he came out on top.</text></item></parent_chain><comment><author>modeless</author><text>&amp;gt; even if a billionaire does get caught and pays all their back-taxes with penalties, they will still most likely be a billionaire and be able to sustain a pretty posh lifestyle&lt;p&gt;By that logic, if they just pay their taxes it won&amp;#x27;t affect their lifestyle either, so their incentive to cheat is also lower.&lt;p&gt;&amp;gt; the payoff for a billionaire successfully cheating on their taxes is much higher than for a non-billionaire&lt;p&gt;In absolute terms, sure. And in absolute terms the penalties are much bigger too.&lt;p&gt;&amp;gt; the IRS prosecutes a lot more low-income people than high-income people (by percentage as well as by absolute numbers) so a billionaire has much better odds of not getting caught&lt;p&gt;Your conclusion doesn&amp;#x27;t follow from your evidence. It&amp;#x27;s possible that low income people are cheating taxes at a higher rate than billionaires. I really don&amp;#x27;t have a lot of trouble believing this; small tax fraud is widespread, even accepted by a lot of people.&lt;p&gt;&amp;gt; billionaires have access to better layers, accountants, publicists and politicians to give them negotiating leverage if they do get caught&lt;p&gt;I don&amp;#x27;t see any evidence that this guy got a better deal than he should have.&lt;p&gt;The point of tax enforcement is not to punish billionaires for being billionaires. The point of tax enforcement is to ensure taxes are collected. If you think taxes are too low, or just want to punish billionaires more harshly because they&amp;#x27;re billionaires, then Congress is the place that has to be changed.</text></comment>
<story><title>How Billionaire Robert Smith Avoided Indictment in Multimillion-Dollar Tax Case</title><url>https://www.bloomberg.com/news/features/2021-02-03/how-billionaire-robert-smith-avoided-indictment-in-multimillion-dollar-tax-case</url></story><parent_chain><item><author>lisper</author><text>There are four differences.  First, the IRS prosecutes a lot more low-income people than high-income people (by percentage as well as by absolute numbers) so a billionaire has much better odds of not getting caught.  Second, billionaires have access to better layers, accountants, publicists and politicians to give them negotiating leverage if they do get caught.  Third, the payoff for a billionaire successfully cheating on their taxes is much higher than for a non-billionaire.  And finally, even if a billionaire does get caught and pays all their back-taxes with penalties, they will still most likely be a billionaire and be able to sustain a pretty posh lifestyle.  So the expected value of the tax-cheating lottery is much higher for a billionaire than a normal person.</text></item><item><author>modeless</author><text>My understanding is that if a little guy evades taxes, but then cooperates with the IRS when caught, and agrees to pay all taxes and interest and penalties, then they generally don&amp;#x27;t get thrown in jail and have all their other money and possessions and responsibilities taken away, as this article seems to imply they should do with billionaires.&lt;p&gt;I don&amp;#x27;t see how this is evidence of special treatment for billionaires. The guy paid way more in penalties than he saved on taxes and also had to help prosecute his friend, who evaded way more tax than he did. It doesn&amp;#x27;t seem to me like he came out on top.</text></item></parent_chain><comment><author>buzzerbetrayed</author><text>&amp;gt; the IRS prosecutes a lot more low-income people than high-income people (by percentage as well as by absolute numbers)&lt;p&gt;I&amp;#x27;m not sure how this is relevant. As of October 2020, there were 614 billionaires in the US[1].  Of those 614 people, only a few of them are likely breaking any sort of tax law (billionaires have a lot of money to make sure they take advantage of loopholes, without breaking the law). So there isn&amp;#x27;t some big list of billionaires that the IRS could be going after but is choosing not to.&lt;p&gt;So the question is, are there known billionaire tax evaders that aren&amp;#x27;t getting prosecuted? That should be the only question that matters. Using statistics in this case would likely lead to more injustice than less, as the only way you could get billionaire vs non-billionaire prosecutions rates to align is by prosecuting billionaires that aren&amp;#x27;t breaking the law. (edit: unless there are many billionaire tax evaders that are just getting away with it, of course.  I don&amp;#x27;t know if that&amp;#x27;s the case or not)&lt;p&gt;[1]: &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;List_of_Americans_by_net_worth&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;List_of_Americans_by_net_worth&lt;/a&gt;</text></comment>