If they intended something else, then why didn't they write the rules to reflect "else"? The truth is that they didn't think that any Roth IRA investor would be as successful as Thiel. He showed that he can be. Good for him.
> If they intended something else, then why didn't they write the rules to reflect "else"?
If the web server didn't intend to allow a buffer overflow on POST requests, why did it improperly allocate memory?
I agree with you that we have a choice: should this be allowed? If not, how do we transition? If yes, do we want to place any limits on it in the future?
When you create a tax shelter, someone always asks "what if someone uses this to create an enormous amount of wealth"? This is not just true for the US tax code, but has been true for probably every tax code in history. When that question is raised, the first thing to contemplate is how likely it is to occur. And if it is not considered likely, then this risk is accepted.
Fuzzing may be a good analogy. Fuzzing can be used to test POST request processing when the logic is too complicated to validate via more formal means. We try a large sample of inputs. If they pass, then the test passes, even though we cannot be confident that the code will handle every input string correctly.
Sure, if you can reproduce the input and if you agree that it is misuse. This is a scenario where we don't know the formula to create $5B, and and there is no consensus that it ("making an extremely successful investment in a tax shelter") is misuse.
Why wouldn't it be allowed? If my investments into my Roth IRA performed so we'll i became a billionaire, I wouldn't want to be treated differently. And I wouldn't want my mom or my neighbor to either. They essentially got lucky, they're not taking anything from me in being so fortunate.
The "problem" in this case is that Thiel was already a billionaire to begin with, and such luck on top of existing wealth is what irrationally bothers people.
We have a progressive tax system, which generally taxes higher incomes at greater rates. Maybe we do want the Roth to be an unlimited shelter, but that has generally not been the approach we have taken.
> The "problem" in this case is that Thiel was already a billionaire to begin with, and such luck on top of existing wealth is what irrationally bothers people.
This isn't how I feel and I don't actually think that is the case ProPublica is making. Tax breaks can also be understood as payments - is it in the interest of the US to pay Thiel to put his money in a Roth? How much should the US pay? How many of your tax dollars would you want to go to funding tax breaks for Thiel?
I am sure people are vindictive as well, but the tax questions seem both meaningful and work asking to me.
I think this is a strange zero-sum way of interpreting things. It assumes tax income is fixed in some way, and that some not being taxed means others always get taxed more. That's false.
> Is it in the interest of the US to pay Thiel to put his money in a Roth? How much should the US pay? How many of your tax dollars would you want to go to funding tax breaks for Thiel?
I submit that yes, it is in the interest of the US to do this, provided that Thiel is creating value for the US (and to some extent the world) with that money. $5B is approximately one day of US government spending (maybe less now). Letting Thiel invest $5B may not be the best investment decision that the USG has ever made (e.g. Internet funding, Telsa support), but it is way higher than the mean decision.
The difference is also that the investments your mom or your neighbor put into their Roth IRA are going to be publicly traded companies and similar. Thiel, an accredited investor and startup founder, tweaked his salary to be low enough for a Roth and sold himself shares of his own company at a very low price to put into his white glove managed Roth IRA.
The average person does not have the ability to do this.
Here, I think some lawmakers probably thought (a) "if someone can use this tool that well, then more power to him", or (b) I don't like it, but it is so unlikely, and I can probably live with it.
I don't think it was a scenario of someone failing to "consider the case."
The law is an evolving code as we discover new scenarios. This reporting is exploring one of those unexpected scenarios so we can understand the need to change the law.
If the web server didn't intend to allow a buffer overflow on POST requests, why did it improperly allocate memory?
I agree with you that we have a choice: should this be allowed? If not, how do we transition? If yes, do we want to place any limits on it in the future?