SecondCor - you seem hung up on this "can't put stock into IRA" thing, but that hardly matters when the share price can be anything you want. To illustrate:
I form corporation A, you form corporation B. I use my Roth IRA funds to buy $5000 worth of shares in your corporation B, that can be 1 share or 1 trillion shares, it does not matter. You use funds in your Roth IRA to buy $5000 worth of shares in my corporation A. Next, I buy back your shares of my corporation with my non-IRA money for $1 million, and you similarly buy my shares for $1 million. Just like that each of us has effectively transferred $1 million into our respective Roth IRAs. Yes, if the IRS gets wind of this simplistic scheme they will likely shoot it down. A more complex scheme can achieve the same result and be much harder to shoot down, and that's what the big wigs do.
Emphasis added.
I can be pedantic, argumentative, and stubborn, often all in the same day.
The point about putting stock in an IRA was more of a pedantic thing, and not really very important in the scheme of things.
The more important issue to me is item 4 about how some people think that rich people mostly get ahead by cheating/bending rules/etc. It's a free country, and people are obviously entitled to their opinion in general and specifically on this board. I simply strongly disagree with how the vast majority of wealthy people manage to get that way.
As information supporting my opinion, I gave two counterexamples of where fraudulent behavior doesn't work to achieve sustainable wealth in my previous post. I also can point to the work in the Millionaire Next Door books which describe common traits of millionaires to decamillionaires - my recollection of that book is that rich people get that way through a lot of honest hard work, frugality, and investing well over time, not through tax fraud as alluded to with your example above.
As an additional set of information I could add my personal experience. I've met and known a variety of wealthy to very wealthy people ($1M - $1B). While some have been a tad eccentric, all were uniformly excellent human beings who treated other people with decency and respect and usually great care, were respected members of their community, and as far as I knew conducted their financial affairs with integrity and honor.
You might point out that there could be a difference between those folks and the ultra ultra rich (Musk, Buffett, etc.). To that I might reply that although that may be so, I suspect that the number of millionaires to decamillionaires probably vastly outnumber Musk/Buffett/Bezos types. That, plus the fact that most Musk/Buffett/Bezos types also seem to achieve wealth through valuable businesses and/or talented investing over time, means there's not a lot of wealthy people left over who get that way through cheating/crazy tax schemes/etc.
It is very difficult for somebody who isn't an accredited investor (aka rich person) to buy stock in a private company period. (IRA can impose even higher standards). As GreyHare points out, if you are really rich like a partner in Bain Capital you have even more opportunities to take advantage of differences in pricing.
Plus most of the time it is not even intentional fraud. Outside of public markets, there is a wide discrepancy between prices in virtually all assets. Real Estate, the more specialized the bigger the spread. Art, private business, patents, bond values of companies in bankruptcies or Venezuelan bonds. A spread of 2x between what a buyer and seller think something is worth is not uncommon and even 10x is unheard of.
To me that's one of the most problematic issues with any type of wealth tax.
This is a good legitimate example of a case where rich people can do something that poor people cannot - only accredited investors can invest in certain things, and accredited investors I think have to have a certain amount of wealth. Thank you for the example.
