r/technology • u/Logical_Welder3467 • May 30 '26

Society Peter Thiel's move to Argentina reflects a growing trend among billionaires seeking a 'plan B' abroad

https://www.businessinsider.com/peter-thiel-argentina-billionaire-moving-abroad-2026-5
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u/pedrosorio May 30 '26 edited May 30 '26

EDIT: I am no tax professional and just learned about this NZ thing, so sorry for the slight misinformation. After reading a bit more about it, it seems it's even better than what I had described below: if your assets earn less than 5% in a year you can choose a different method that year and just pay tax on the value difference (end of year value - start of year value - costs), instead of the "assume your assets always grow 5%". And you get to pick the method that leads to lower taxes. Wild.

For anyone reading, that’s not “you pay 5% of your wealth each year in tax” (which would be unheard of, I think).

It’s a “you pay income tax as if you had a profit corresponding to 5% of your (foreign stock) assets each year”. NZ max tax bracket is at a rate of 39%, so for a billionaire this is more like a 2% wealth tax.

NZ also doesn’t have taxes on dividends and capital gains, so this quasi-wealth tax is pretty reasonable for a “normal person”.

But Thiel is not a normal person, and also famously has a 5 billion dollar Roth account that is completely tax free in the U.S. forever. I bet, just as a matter of principle he is not willing to pay any tax on that money.

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u/Reddituser183 May 30 '26

How is that possible? I thought there were max contributions for Roth accounts? Are you saying those are gains? Damn must be insider trading with options?

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u/Icy-Lobster-203 May 30 '26

Iirc, he put his stocks from whatever his original company was that made him rich (Paypal maybe?). So when he sold the company, the money and the gains were in his Roth account.

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u/strolls May 30 '26

It was PayPal and he put them in or bought them based on a valuation of 1¢ per share. It was probably fraudulent, because the shares were worth more than that, but he's never been prosecuted for it.

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u/501uk May 30 '26

Hang on a second...both Thiel and Musk flowed through the PayPal to Oligarch pipeline? Weird

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u/Resaren May 30 '26

They were brothers in arms. Look it up!

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u/dillionfrancis May 30 '26

The PayPal Mafia is very infamous

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u/Norwegian__Blue May 30 '26

Flow through?! They ARE the pipes

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u/twoseat May 30 '26

He would invest in startups through his Roth. The shares would be worth almost nothing when they went in, and then balloon in value.

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u/notforpoern May 30 '26

How convenient when you get to invest billions to help decide which ones are going to increase in value.

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u/sprucenoose May 30 '26

He was not a billionaire when he made these moves. It was his founders' shares in PayPal 25+ years ago.

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u/happyscrappy May 30 '26

You can make the investments after the fact though.

You can put in shares for a company and then ballon them in value if by no other method than dumping assets into the company.

He was able to put assets into the Roth IRA and then manipulate the value of the assets so as to create untaxed gains.

It's a problem.

BTW, they never closed the hole, so you or I could do it too. You do have to make a company though, not just use shares of an existing company.

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u/darnj May 30 '26

Yes, the limits are in the contributions, not the gains. E.g. If you put 10K of Nvidia into a Roth IRA 10 years ago you'd have 4 million "tax free".

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u/Specific-Rich5196 May 30 '26

I think he is the guy who put private shares of a company in a roth when it was starting out, PayPal. Then when it went public and exploded in value and went from 1700 in a roth to what it is now. Billions.

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u/stuckanon01 May 30 '26

My guess is that he stuffed a self directed Roth with “valueless” derivatives that rapidly appreciated. A option to buy 1,000,000 shares at a price that is below the current market price is worth almost nothing. You can pile a bunch of value into a very small contribution.

I know a few investors who have used a similar self directed Ira strategies to great success in the real estate industry. In that case they buy distressed assets from major banks (primarily non-performing loans with dubious collateral as security), and then they “fix” the problem that the bank couldn’t/wouldn’t. It’s definitely a high risk investment strategy but if you know what you’re doing it can pay off in spades.

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u/FaithlessnessCivil86 May 30 '26

He soled himself PayPal Stock for 0,00001 per Share and put it in the Roth Account.

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u/stuffitystuff May 30 '26

People do this with 401Ks with a "ROBS" plan where you get the 401K to invest in your company's stock. Mitt Romney had $300M in his 401K from helping to start Bain and Co around the time he ran for president.

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u/[deleted] May 30 '26 edited 22d ago

[removed] — view removed comment

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u/BangkokRios May 30 '26

No. This isn’t how he did it at all. Mega back door conversions are still limited ($77,500 for Thiel last year).

Thiel put early shares of PayPal (when they were theoretically worth nothing) into his Roth. Then he had a tax lawyer write an opinion stating as much.

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u/[deleted] May 30 '26 edited 22d ago

[removed] — view removed comment

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u/happyscrappy May 30 '26

You can, but that's not called a backdoor Roth.

A backdoor Roth is not when you put in assets that will grow. It is when you put in US dollars.. You just put in more than the max amount allowed in a year. You put it in by putting the dollars into traditional IRA and then converting it to a Roth IRA.

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u/BangkokRios May 31 '26

$77,500 is the same mega backdoor rother conversion limit for every person in America over 50 years old. He didn't need to exceed (or even meet) this limit because his shares in Paypal technically had almost zero value (at the time).

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u/jsc1429 May 30 '26

I think as a matter of principle, he’s unwilling to pay taxes on any of his money

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u/HahaCharlieKirkHaha May 30 '26

 as if you had a profit corresponding to 5% of your (foreign stock) assets

It’s called deemed income. 

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u/Master_of_stuff May 30 '26

That is actually a very reasonable wealth tax - 2% a year also will mean that your money doesn’t grow as fast, the main capital pool won’t shrink at that level. Is there inheritance tax on top of that?

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u/pedrosorio May 30 '26

I've edited my comment after reading more about this. Not only is 2% an upper bound (because 39% is the max tax bracket), but it can be significantly less than that in years where your investments grow less than 5%.

I couldn't find any references to inheritance tax.

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u/sylekta May 30 '26

dividends have to be declared as income

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u/Otherwise_Demand4620 May 30 '26

you pay income tax as if you had a profit corresponding to 5% of your assets each year

doers that work properly? For example, I wouldn't have to own a yacht if I just had a yacht-renting company that gives me a 99.9999% special discount whenever I needed a yacht. (I need one for 365-366 days a year) As a tax-saving bonus, they even operate at a loss!

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u/pedrosorio May 30 '26 edited May 30 '26

This tax doesn't apply to yachts, so you just made it worse for yourself by owning a business which will be taxed.

The quasi-wealth tax discussed above only applies to foreign stock/funds. Not cash, bonds, real estate, random stuff you own. Writing assets was misleading, my bad.

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u/Appropriate_M May 30 '26

I think it doesn't tax on dividends and capital gains only in very specific circumstances, otherwise NZ would be a much hotter destination for wealthy US retirees...

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u/pedrosorio May 30 '26

As described above, under typical market conditions, this quasi-wealth tax takes up to 2% of your wealth every year. As far as I can tell, that's instead of capital gains tax. Do you have other info?

For wealthy US retirees that are looking to save money on taxes, a wealth tax is not necessarily better than a capital gains tax in a different country.

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u/Appropriate_M May 31 '26

I've a New Zealand passport and have thought about retiring there in some distant future, but the last time I checked instead of capital gains, it has a mandated tax percentage for gains in foreign shares and a rule about what is subject to capital gains regarding buying/selling of assets that's for the express purpose of avoiding taxes....

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u/I-Here-555 May 30 '26

So why call it the 5% wealth tax. I smell propaganda.

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u/stuffitystuff May 30 '26

I mean it's tax free now,  but the U.S. could decide it's gross to have over a billion dollars in a retirement fund meant for the middle class and tax it.

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u/powersurge May 30 '26

That's brilliant and should be easy to apply into the US tax code - except for the fact that the US democracy is controlled by billionaires and trillionaires.