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Ditto Insurance

9 Sep, 9 tweets, 2 min read

America's richest billionaires are using #insurance to escape paying up their fair share of taxes.

How exactly?

A thread👇 (1/9)

The Biden administration is coming for rich Americans.

The plan is to extract $1.5T in taxes from the top 1% over the decade.

So are these folks going to cough up more in taxes?

No, they’re called tax-savvy for a reason. This time, insurance is coming to their rescue. (2/9)

We are talking about "private placement life insurance."

PPLI is a glaring loophole that can help billionaires not pay up their fair share of taxes.

And here’s the fun part - it’s totally legal. So how does it work? (3/9)

PPLI is not to be confused with your run-of-the-mill life insurance. Sure, it does offer the kind of death benefits typical insurance policies do. But the interesting bit is the investment component it offers. (4/9)

PPLI seeks to maximize the cash value, which is basically the insurer saying that they'll invest a chunk of your premiums in securities to build up a portfolio. Typically, that portfolio looks like this - there’s venture capital, hedge funds, and real estate inv. trusts
(5/9)

But why turn to insurance for investment?

If you go ahead and invest in a hedge fund through your personal account, every single trade you make will attract tax. And we are talking big rates here - as high as 50%. (6/9)

But with the PPLI, you end up paying nothing in taxes on those investments. That's right. Zilch.

Wait, there's more. Cash withdrawals made from the policy - tax-free. Borrowings from the policy - tax-free. Death benefits & the contents in PPLI passed on to heirs- tax-free
(7/9)

Yet this policy isn't without its pitfalls.

For instance, once you’ve put your money down in a PPLI, you have little control over portfolio decisions. (8/9)

Still, they do promise you a safe harbor for your investments without the taxman breaking in. What more could wealthy Americans possibly ask for?

*********
Ditto helps you select the most suitable health & life insurance policies. Visit joinditto.in (9/9)

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