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Peter Schaeffer: "I really don't have a problem with Edwards investing in a shipwreck business. However, the S Corp assertion is serious. Years ago, I was self-employed. I heard of schemes like that back then, but never did it. The consensus was that it was treading too close to the law. Perhaps the law has changed, although I doubt it. A quick check online shows that the law has not changed."
To paraphrase Emeril: Dude, you gotta ratchet up the cynicism a notch.
Don't believe for a second that the "elites" labor [no pun intended]under the same legal code that they impose on their serfs.
And don't think for a second that those hedge fund guys are gonna pay 39+% income tax on the pirate booty - they'll fix the paperwork so that it comes out as a "Capital Gain" for which they'll pay AT MOST 15% [and after all the depreciation, amortization, R&D, and various other write-off shenanigans, their final rate will be vastly less than 15%].
Why do you think Microsoft never declares a distribution?
Or why did Ross Perot's 1992 tax returns show that almost 100% of his investments were in tax-free state & municipal bonds?
In their disclosures during the 2004 campaign, it came to light that the Kerry's [John & Teresa Heinz] were paying all of about a 12.5% tax rate on their income.
That's like a point less than Joe Sixpack pays on his Social Security alone.
The elites are just different than normal people.
And "employment", with its associated tax penalties, is just a polite euphemism for "slavery".
bttt
This screed was written as if it was some big revelation. LOL - practically everyone in Calif knows the score - that's why the #1 thing you must do out here is buy a house, no matter what.
Where I live, illegals are nannies to the kids, serve up the food & maintain the yards. Home owners stop working once the AMT & 50% rates kick in, since everyone is sitting on a pile of equity that will never be taxed. (Either on a rollover or the 55 yo exclusion.) And when a development plan is proposed, they are regularly defeated to keep open space and limit increases to the housing stock.
But here's the big secret: it's not just the oligarchs doing it. It's middle-class folks (in some cases blue-collar) and believe me, everyone is on the game.
ping, read this
Peter Schaeffer: "Peri rather explicitly does not even consider the possibility that immigration has impacted prices (mainly but not exclusively housing) in California..."
Peter Schaeffer: "If one takes into account housing costs, Calfornia is considerably more expensive than the US as a whole and real wages corresponding lower..."
This is all a huge win-win for established California elites. They get the re-introduction of de facto chattel slavery [Esmeralda, be a dear, and run get me another piña colada, would you please?], and, at the same time, that army of little brown wage slaves drives the values of their existing real estate holdings right through the stratosphere.
By the way, a little known fact of the California real estate market is that, in addition to having the "immigrants" drive up the DEMAND for California real estate, the elites have also restricted the SUPPLY of California real estate, via the Williamson Act:
http://www.google.com/search?safe=off&q=williamson+act
If you ever take the PCH north of Santa Barbara [which has some of the highest real estate prices in the known universe], then you'll see that suddenly all of the development stops completely, and you're out in the middle of strawberry fields for as far as the eye can see.
And you wonder to yourself why the development community hasn't built up there, so as to ease the cost of real estate down in Santa Barbara, and of course the answer is that the Williamson Act prevents the old farmland & ranchland from being divided into parcels smaller than 100 acres.
So the elites have artificially inflated the demand for real estate, and artificially strangled the supply of real estate, and, thanks to Howard Jarvis, exempted their property holdings from taxation, ergo - la voila! - they're all gazillionaire land barons.
PS: This is also the primary reason that California wine is so darned expensive, relative to e.g. Spanish, Italian, or even French wine. The Williamson Act presents a massive barrier to entry for would-be small vintners, who might be able to make a go of it with only five or ten acres; instead, the California wine market is dominated by the mega-millionaires [Francis Ford Coppola, Nancy Pelosi, etc] & the corporate megaliths [Gallo, Beringer, Mondavi, etc] who can afford the millions of dollars necessary to purchase a 100+ acre parcel of California soil.
PPS: And notice how the elites tax the wage slaves at 30% to 40% on the dollar [20+ points income tax, 13+ points social security, 3+ points medicare, etc etc etc], but they only tax themselves 20% on capital gains, and Prop-13 their way out of property tax obligations?
And almost none of those capital gains taxes are making their way into the welfare trough that Robert Rector has written about so much lately:
http://www.heritage.org/about/staff/Robertrector.cfm
So they get the cheap labor, they tax themselves at a far lower tax rate than everyone else, and, because capital gains taxes don't go into the same pot as social security & medicare taxes, they don't have to foot the bill for the $19K per year that the cheap labor costs the social welfare system.
Quite the scam they've got going there.
Must be nice to be an oligarch - funny how everyone pays lip service to the ideal of "equality before the law", but nobody actually believes in it.