Like our billionaires at home, foreign oligarchs and despots are sheltering untold sums from taxation across our country.
As the explosive Pandora Papers investigation revealed, the world’s ultra-wealthy employ complex schemes in order to avoid taxation. One of those schemes involves stashing wealth in the state of South Dakota, has become a popular place for multimillionaires and billionaires around the world to stash their money in vehicles known as trusts. Trusts are common tools of wealth management, but they can be abused to generate massive dynastic wealth. For example, a recent Institute for Policy Studies brief details how a multimillionaire or billionaire can create a dynasty trust, in which money can grow almost entirely protected from estate and transfer taxes.
In recent years, US states have increasingly loosened their trust laws over the past couple of decades in order to attract new trust business and compete against traditional corporate-friendly states like Delaware. And South Dakota has quickly become the poster child of the trend, made clear by how often the state is mentioned throughout the Pandora Papers. Currently, there are more than $500 billion in trust assets managed by 106 trust companies in South Dakota; that number of trust assets has more than doubled in the past five years.
Read the full article at The Nation.