Any opinions on this? South Dakota as the Cayman Islands of the US?

[pmv]

As far as I can understand it, it's actually worse than offshore tax havens.

It sounds as if it means any sufficiently rich family can replicate what Lizzie and the Windsors have (wealth sheltered and untouchable for generation-after-generation, never to be eroded by inheritence tax or even divorce settlements). Just without the price the Royals pay of having to become a living soap opera for everyone else's entertainment.

Isn't this a recipe for ever-increasing stratification?

The great American tax haven: why the super-rich love South Dakota

The long read: South Dakota is known for being the home of Mount Rushmore – and not much else. But thanks to its relish for deregulation, the state is fast becoming the most profitable place for the mega-wealthy to park their billions

www.theguardian.com

 

[pmv]

I mean, ultimately the rich are stashing their wealth there because it has the stability of the US, which gives it an edge over the traditional foreign tax-havens. But the more US cash that gets stashed there, the less there is to pay for the services that keep the US stable.

 

[Thebobo]

I wonder how the internet is there maybe I'll retire there

 

[Victorian Gray]

I wonder how the internet is there maybe I'll retire there

Have fun with that

 

[dank69]

Have fun with that

View attachment 13283

Good, hopefully the whole midwest turns into a popsicle.

 

[Victorian Gray]

Good, hopefully the whole midwest turns into a popsicle.

One of the main reasons I moved from Winnipeg to the west coast. Winter.

 

[feralkid]

Good, hopefully the whole midwest turns into a popsicle.

It already does every Winter.

 

[hardhat]

I wonder how the internet is there maybe I'll retire there

100/25 fiber in the bigger cities unless you need a business line. 50/10 in smaller towns. Wifi is wifi. Snow doesn't affect it as it is all buried.

But florida has a lot nicer weather excluding hurricanes and also has no income tax. Don't know about estate tax.

 

[bbhaag]

It has been this way for a long fucking time. When they passed these laws every credit card company in the US set up shop in SD. It is literally the cc capitol of the US.
I don't have an opinion on this because it has been this way for so long I stopped giving fucks long ago.

 

[pmv]

Good, hopefully the whole midwest turns into a popsicle.

Though the wealthy don't actually have to _live_ in the state to take advantage of the zero tax rate, they just set up a trust there.

It may have been this way for a long time, but it sounds as if the super-rich are only slowly realising the benefits of this. The fundamental issue being the US law only requiring disclosure in one direction.

Oh well, I'm already of the view that plutocracy is an inevitable development of contemporary capitalism. This just seems to me to be one of the mechanisms for getting there.

 

[dank69]

Though the wealthy don't actually have to _live_ in the state to take advantage of the zero tax rate, they just set up a trust there.

It may have been this way for a long time, but it sounds as if the super-rich are only slowly realising the benefits of this. The fundamental issue being the US law only requiring disclosure in one direction.

Oh well, I'm already of the view that plutocracy is an inevitable development of contemporary capitalism. This just seems to me to be one of the mechanisms for getting there.

Not looking to freeze the people taking advantage, just looking to freeze the useful idiots that enable it all.

 

[Exterous]

As far as I can understand it, it's actually worse than offshore tax havens.

It sounds as if it means any sufficiently rich family can replicate what Lizzie and the Windsors have (wealth sheltered and untouchable for generation-after-generation, never to be eroded by inheritence tax or even divorce settlements). Just without the price the Royals pay of having to become a living soap opera for everyone else's entertainment.

Isn't this a recipe for ever-increasing stratification?

The great American tax haven: why the super-rich love South Dakota

The long read: South Dakota is known for being the home of Mount Rushmore – and not much else. But thanks to its relish for deregulation, the state is fast becoming the most profitable place for the mega-wealthy to park their billions

www.theguardian.com

So it sounds like there are some benefits to SD's laws but I think the article misses on several points

In most jurisdictions, trusts have to benefit someone other than the benefactor – your children, say, or your favourite charity – but in South Dakota, clients can create a trust for the benefit of themselves (indeed, Sun Hongbin is a beneficiary of his own trust)

I don't think the jurisdiction part is true. I've only ever seen trusts that the benefactor(s) are the primary beneficiary and none of those were based in SD although I'll admit my experience is limited to three states in the midwest. Besides if the benefactor is also the beneficiary you're going to specify who or what gets the assets on their death anyway so the statement doesn't really make sense.

A South Dakotan trust changes all that: it protects assets from claims from ex-spouses, disgruntled business partners, creditors, litigious clients and pretty much anyone else

An irrevocable trust already does this assuming you're not doing this to hide assets from active or soon to be active creditors or as part of "divorce planning". The claimant time might be advantageous but it doesn't seem like it would be excessively so compared to what I suspect you'd find in other states (And I'm assuming there is a broad range across the US of what you'll find). It sounds like you'll retain marginally more control with SD's self settled trust that a traditional irrevocable trust but you've still got to hand over most of it.

And it shields your wealth from the government, since South Dakota has no income tax, no inheritance tax and no capital gains tax.

Only the State government as the Federal Government still taxes it. And its not really a shield just a benefit of SD not charging income tax. If SD decides to charge income tax trusts would have to pay those along with residents. Not sure what a "South Dakotan" trust is but they are still assessed taxes at whatever federal tax rate the trust conforms to. For your standard trusts its $3,075 plus 37% over $12,750. For perpetual trusts (dynastic trusts) money put into these is taxed at the federal rate above the inheritance limits ($11M currently) and they are taxable entities that have to pay federal income tax (I don't think distributions are taxed but you might get the opportunity to disburse the money as a taxable event to the beneficiary if the beneficiary is in a lower tax bracket than the trust).

 

[Bitek]

It has been this way for a long fucking time. When they passed these laws every credit card company in the US set up shop in SD. It is literally the cc capitol of the US.
I don't have an opinion on this because it has been this way for so long I stopped giving fucks long ago.

Delaware tries to give them a good run chasing the money.

Lots of cc issued from there, as well as corporate headquarters, no income tax, etc.

 

[purbeast0]

As someone who's been to Grand Cayman 4x, I can tell you they are nothing like and a temperature difference of about 100F.

Oh and Grand Cayman doesn't have any snow, just if you weren't sure.

 

[imported_tajmahal]

If you get a chance, visit the Crazy Horse Memorial still under construction. South Dakota is a great place to visit for a vacation. A shame they actually allow people to keep their own money when socialist Democrats think they can do so much more with it.

Plan a Visit : Crazy Horse Memorial®

Plan a visit to Crazy Horse Memorial

crazyhorsememorial.org

 

[Greenman]

Sounds like South Dakota is doing as well.

 

[Jhhnn]

If you get a chance, visit the Crazy Horse Memorial still under construction. South Dakota is a great place to visit for a vacation. A shame they actually allow people to keep their own money when socialist Democrats think they can do so much more with it.

Plan a Visit : Crazy Horse Memorial®

Plan a visit to Crazy Horse Memorial

crazyhorsememorial.org

99.9% of the population receive negative benefit. Worship the sacred Job Creators.

 

[senseamp]

No such thing as a tax free lunch in perpetuity. Something is going to give eventually, and that something is going to be the stability and safety of that money. Once the public coffers are bled dry with tax avoidance, those trusts will be low hanging fruit to raid.

 

[1prophet]

Is this the same South Dakota that cried about not getting sales taxes from out of state purchases?

https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc

.

South Dakota v. Wayfair, Inc., 585 U.S. ___ (2018), was a United States Supreme Court case in which the court held by a 5-4 majority that states may charge tax on purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state. The decision overturned Quill Corp. v. North Dakota (1992), which had held that the Dormant Commerce Clause barred states from compelling retailers to collect sales or use taxes in connection with mail order or Internet sales made to their residents unless those retailers have a physical presence in the taxing state.