Roblox’s CEO is alleged from the New York Times for Tax Evasion

[ebprince the computer nerd]

Summary

Roblox’s CEO, David Bazucki, has been alleged by the New York Times, for not paying for millions of dollars in taxes through a legal loophole. They used small business tax to evade millions in taxes.

 

Quotes

Quote

• Roblox founder David Baszucki potentially avoided paying millions in taxes, according to The New York Times.
• Baszucki and his family used a small business tax exemption at least a dozen times, the paper reported.

 

My thoughts

I don’t think it’s his fault. Yes it is annoying, but they took advantage of a loophole and look what happened, it worked and saved them tens of millions of dollars.

 

Sources

https://www.businessinsider.com/roblox-founder-billionaire-david-baszucki-qsbs-tax-break-small-business-2021-12

 

[SansVarnic]

-= Moved to General Discussion Off Topic =-

Doesn't meet the Guidelines definition of Tech News.

 

E: Since this is about personal finance of said person, this isn't about tech or tech company. -LogicalDream

Edited December 30, 2021 by LogicalDrm

[Cyberspirit]

I think it's pretty safe to say that anyone who is rich or is in a CEO position does some kind of tax fraud. Not really surprised tbh.

[bmx6454]

8 minutes ago, Cyberspirit said:

I think it's pretty safe to say that anyone who is rich or is in a CEO position does some kind of tax fraud. Not really surprised tbh.

it's not fraud though lol. i'm not a fan of it either, but it was legal...

[poochyena]

I, also, avoided paying millions in taxes.

Tax avoidance and tax fraud are two completely different things. I'm also unsure how this is a "loophole" when the law reference was literally designed for this.

[Blue4130]

This isn't fraud or evasion. He used a legal loophole. Is it a dick move? Yes. But it's all within the letter of the law. 

[LogicalDrm]

Thread moved again, this is about personal finance, not tech related.

[wasab]

13 hours ago, Cyberspirit said:

I think it's pretty safe to say that anyone who is rich or is in a CEO position does some kind of tax fraud. Not really surprised tbh.

not really, it can be done without fraud. it is called, borrow, spend, then die apprach. these people lock their wealth into stocks, for company CEO/Founders, it is usually stocks of their own company. Later they go to banks that cater these high net worth individual and borrow against their stock portfolio at super low interest rate of like 2%. They then just use the borrow money to fund everything, from food to their private jets. 

 

Now here is the kicker, borrow money is not consider income thus no tax. what does this mean? their wealth can grow billions each day as their stocks value grow and they pay at most just 2%, instead of 80%+ or so on progressive income tax. As long as their net wealth in stocks can cover their liabilities, they can keep borrowing and spending until kingdom comes and never have to pay back the debts. 

 

It is no surprise many CEOs take just $1 in salary and choose to be compensated with stocks instead. Finally, they just die at old age and their billions net weatlh pass down to their kins. Due to tax laws, their kins pay abolustly no tax on the capital gains that would be realized had their parents sold the stocks while they were alive. 

 

All of these together, what does it mean? top 1% can pay shit lower tax than the poorest lower class. Only fools would commit frauds when loops holes are plenty. 

[Cyberspirit]

13 hours ago, bmx6454 said:

it's not fraud though lol. i'm not a fan of it either, but it was legal...

 

34 minutes ago, wasab said:

not really, it can be done without fraud. it is called, borrow, spend, then die apprach. -snip-

My wording wasn't the best but by some kind of tax fraud I meant anything that lets them save money on them. Good for them either way.

[MultiGamerClub]

Roblox.. not suprising.

[ebprince the computer nerd]

20 minutes ago, MultiGamerClub said:

Roblox.. not suprising.

after they went public it feels like they’ve been on headlines the entire time

[wanderingfool2]

4 hours ago, wasab said:

not really, it can be done without fraud. it is called, borrow, spend, then die apprach. these people lock their wealth into stocks, for company CEO/Founders, it is usually stocks of their own company. Later they go to banks that cater these high net worth individual and borrow against their stock portfolio at super low interest rate of like 2%. They then just use the borrow money to fund everything, from food to their private jets. 

 

Now here is the kicker, borrow money is not consider income thus no tax. what does this mean? their wealth can grow billions each day as their stocks value grow and they pay at most just 2%, instead of 80%+ or so on progressive income tax. As long as their net wealth in stocks can cover their liabilities, they can keep borrowing and spending until kingdom comes and never have to pay back the debts. 

 

It is no surprise many CEOs take just $1 in salary and choose to be compensated with stocks instead. Finally, they just die at old age and their billions net weatlh pass down to their kins. Due to tax laws, their kins pay abolustly no tax on the capital gains that would be realized had their parents sold the stocks while they were alive. 

 

All of these together, what does it mean? top 1% can pay shit lower tax than the poorest lower class. Only fools would commit frauds when loops holes are plenty. 

It's sort of a double edged sort to be honest though.

 

If they were to tax capital gains on death, then you would have family businesses that essentially would have to become either public companies or essentially give up shares of the company...or have it so that less of the company is sold publicly (meaning more failed companies because capital raising is more difficult).  There is also the concept that a company worth billions will likely be spending a lot more money, thus generating more jobs and purchases of goods which means more taxes contributed towards the government.  It also creates issues in terms of how do you tax someone who is inheriting a lot of stock.  An example would be if Elon Musk died tomorrow, the stock price of Tesla would plummet, given the amount that the stock is overvalued the people who are inheriting the stock could potentially owe more money in taxes than the stock would be worth.

 

While not popular in the eyes of the people, higher consumption taxes would be a better way to go (harder to dodge, and easier to prove).  That way a billionaire who lives an extravagant lifestyle would be paying a lot more everyday tax.  i.e. Imagine if income tax was eliminated but there was a 25% consumption tax (with the exclusion of taxes on food, and essentials)