(H/T to a SouthDacola Foot Soldier who sent me this)
I will admit I learned a lot about SD Trusts listening to Terry Prendergast in this podcast. While Terry points out many great things about trusts that the media hasn’t mentioned, he still can’t convince me that they are good for the average South Dakotan.
While they do create jobs, can be held by anybody with wealth or inheritance, are free from state income taxes and help feed the Federal coffers they still leave me with a lingering question, “How does have $500 billion of someone else’s wealth in South Dakota benefit the average South Dakotan?” It doesn’t. And in a round about way, Terry brings it up. He does admit it is a legal tax shelter (not evasion) does benefit the state with bank financing fees, but also admits there is no actual tax dollars coming into the coffers.
While I appreciate him clearing up a lot of questions, even to go so far as saying nothing nefarious is going on (which is true) I have to disagree with him on the benefit of having them here. While SD Trusts are not illegal, and are being ran with the highest standards, at the end of the day I ask why the state legislature is so eager to pass laws beneficial to a select group of people that live out of our state while having very little benefit to South Dakotans?
If the state legislature really wanted to make an impact with legislation, they would focus on its citizens instead of Kings, Drug Traffickers and Dictators (legally) hiding their money in South Dakota (and an occasional farmer).
The mere fact he calls it a tax shelter while also claiming it feeds the federal coffers is classic attorney talk.
The bottom line is this. If you put lipstick on a pig, it’s still a pig. I don’t care if some jobs are created by it, or fees are raised by it. The fact that the trust system in South Dakota is what it is because they got rid of the rule against perpetuities is the real issue here and not any asserted collateral benefit.
The rule against perpetuities dates back to 17th century England and was a decision by the courts to end the perpetuity of wealth through dead hand control. This court ruling and its precedence were another means to end feudalism and the control of wealth by the few, and then instead hand that control to the masses by preventing the potentially untouched growth of wealth in the hands of a few, the wealthy, in a manner that could dwarf, or at least compromise, growing democratic norms and practices overtime.
I see a strong analogy between South Dakota’s ending of this rule and it contemporaneous ending of usury laws in this state. This analogy goes beyond the obvious similarity, where both are seen as pro-business, however. Rather just as usual laws allowed a bank to become predatory and successful (in my opinion), which then in turn allowed a billionaire to unilaterally fund a health care system in this state. These perpetual trusts, that we now allow in our state, have the same potential to generate a similar continual wealth control which is consolidated within the hands of one, or a few, that can appear to do good in the future, but with the most undemocratic of means and with this enormous wealth potential having the capability to also control, dictate, and taint our finest and most necessary institutions in our civil society. But, if you think having a billionaire directly influence our health care system is a good thing, then maybe you can like the trust system in South Dakota, too, because the South Dakota trust system overtime will produce the same domineering public policy realities that our usury laws, or lack of them, have, I am afraid.
The trust tactic resembles how we became a credit card state. Basically, use a small fly over hokey state to improve yet hide income for corporations and the wealthy. Then also, pay an inferior salary for a few clerical jobs. With 360 billion coming in and out of the state, there’s no tax income benefit. Wall Street funds have a one percent annual management fee. This is taxable services that the state could use for infrastructure. 7 percent of 1 percent for 360 billion is more than the present state and counties budgets combined. Once other states copy this con, there will be federal interest if not intervention.
Let’s also remember that some of your best lobbyists are attorneys. These lobbyist/attorneys are always tweaking laws to benefit clients and so they (the attorneys) can financially benefit from them as well. Because that’s what is really going on here with these trust laws in South Dakota. It’s a cash cow for some attorneys in this state. #SouthDakotaInc
( and Woodstock adds: “Yah, but those attorney positions are good paying jobs for South Dakotans”…… “All a guy has to do is get a bachelor’s, score well on the LSAT, get accepted to a good law school, graduate, pass the bar, and then get an attorney job”…. “I think most job seekers can relate to that”…. )
IF none of you are taking advantage of TRUSTS in this state I would question your financial idealogy…
I mean, the easiest form of a TRUST to establish is your own LLC to incorporate your FIRST AND LAST NAME as a Stand alone entity which allows you to keep 100% of your Gross Income “Tax Free” so long as it remains in the trust. Any profits from your LLC should be immediately transferred over to your Land Trust, Real Property Trusts, Retirement Trusts, Healthcare Trusts, Education Trusts, etc-etc.
I am not sure why you all have a hard time with Trusts. Be thankful SOUTH DAKOTA is made up as a FREE REPUBLIC of honest people who will defend their fellow citizens against the Federal Govt.
Why pay a Federal Income Tax if you do not have to?
But if you don’t have to pay a Federal income tax, then that means you never touch your trust. So why have the trust and the money? It would be like someone who stares at their passbook savings account on a regular basis but never withdrawals anything. Not even for a rainy day.
( and Woodstock adds: “Ya, but with a passbook savings account your interest is taxed on a yearly basis, but with a trust, even as it grows, it’s never taxed if you don’t withdraw”…. “The rich win again”…. )
The purpose of an LLC is to call yourself something instead of your name so you can’t be sued personally. If you’re keeping lots of money in one, you’re foolish. A court can freeze it. Then, why can’t a trust be locked? An LLC and a trust are different in many respects. It’s $100 to create an LLC but you can’t without two officers. A trust is private and must be treated as such. I can’t stop a court from forcing me to report assets. Why is a private trust any different?
We’re ‘People’ and ‘People on Paper’. One of us is biological with a brain, feeling and emotion. The other is just crepe.
Daily Spin, you are correct, one of the two purposes to create a LLC in your name is for legal matters of splitting your commercial property from your personal liability. But do not forget the “Tax” consideration also. Any income left in the LLC is not taxed until you personally withdraw it from the company, LLC’s should be, and are the first step to avoiding federal income tax, cause any profits remaining in the company can be, should be diverted to one of your other trusts. Yes, an LLC is the cheapest form of ‘trust’ to set up, which is why they are so common, and why people have more than 1 LLC for many purposes. But let’s not forget, transferring profits to Land Trusts, Real Property Trusts, Retirement Trusts, Healthcare Trusts, Education Trusts is all part of the financial tools ‘we’ have in South Dakota. The longer you can keep that income ‘invested’ and kept from the Federal Govt, the better.