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Stanley Kubrick once wrote the script to a film called I Stole 16 Million Dollars that was rejected by Kirk Douglas as badly written and never got made. Because of the Panama Papers, we now know that Kubrick’s millions were concealed in tax shelters, along with the riches of hundreds of other Americans.
Kubrick, a famously eccentric filmmaker, was less known for being savvy with his taxes—but it turns out he was, both in and out of Hollywood. Kubrick moved to the English countryside in the early 1960s while working on Lolita because “there was a tax allowance for American films,” according to his wife, Christiane, a German who still lives at their 18th-century country manor in Hertfordshire.
When Kubrick died in March 1999, just after filming Eyes Wide Shut (much of it shot at his English country manor [actually incorrect, almost all of it was shot at Mentmore Towers & Elstree Studios]), he had an estimated net worth of $20 million. As has now been revealed by the Panama Papers, at least a part of that fortune—and probably a substantial part—was his country manor, purchased in 1978, which was transferred to offshore companies controlled by his family.
According to the Panama Papers, the companies were registered in the British Virgin Islands and consisted of shares that were distributed to trusts held by Kubrick’s children and grandchildren. This arrangement is believed to have saved the Kubrick family hundreds of thousands of dollars in inheritance taxes at the low end, and possibly millions at the high end. There’s no immediate indication Kubrick was doing anything illegal.
The reason Kubrick took such pains to keep the house in his family is not hard to fathom: He chose to be buried on the grounds of Childwickbury Manor, under his favorite tree. One of his two daughters with Christiane, Anya, who died later in 2009, is also buried on the 1,100-acre estate. Christiane now lives at the manor with her other daughter by Kubrick, Vivian, and a third daughter she’d had prior to their marriage, Katharina, as well as her grandchildren. After shooting scenes there for the end of Kubrick’s 1980 film The Shining, which featured some of the grounds, Jack Nicholson once observed that Childwickbury Manor was, more or less, a family compound, and that Kubrick was “very much a family man.”
Documents from Mossack Fonseca show Kubrick created tax shelters to protect not just the value and ownership of his home, but also profits from some of his movies through a complex network of offshore companies. Others who were named included Hong Kong entertainer Jackie Chan; TV personality Simon Cowell; the ex-wife of Paul McCartney, Heather Mills; and a billionaire American DreamWorks co-founder, David Geffen.
Since the Panama Papers first came to light, there’s been widespread revulsion toward those who attempt to shield their riches from taxes—not just those abusing offshore tax havens for criminal or money-laundering purposes. “We’ve had another reminder in this big dump of data coming out of Panama that tax avoidance is a big, global problem,” President Barack Obama said last week, calling on Congress to do more. “It’s not unique to other countries. A lot of it is legal, but that is exactly the problem. It’s not that they’re breaking the laws, it’s that the laws are so poorly designed.”
In fact, what the scandal really shows is that the laws are poorly designed for everyone—the poor, the super-rich billionaires and those somewhere in between, like Kubrick, whose millions place them well within the 1 percent, but not in the same league as Bill Gates.
As an American, Kubrick would have had to pay U.S. taxes in addition to U.K. taxes, subject to treaties, even though he had lived in the U.K. since the 1960s. While billionaires like Geffen will still have some billions to pass down to family members after inheritance taxes, the heirs of someone like Kubrick might have to sell his home to pay the tax bill. And yet the two are in the same bracket for inheritance tax.
In other words, once you have more than $5.43 million in the U.S. or 325,000 pounds in the U.K., you have enormous incentive to start looking into tax shelters. Although many start looking into them sooner. This is how money is drained from the broader global financial system, chipping away at public services and, ultimately, raising the tax burden for those who cannot afford the accountants and lawyers required to arrange tax deals that, as Obama said last week, are “gaming the system.”
For someone like Kubrick, the question becomes, if you don’t shelter your assets from taxes, are you prepared to potentially see your family lose its home?
Funny, I didn't think 20 Million would be within the 1%. Maybe like top 5%? There are a lot of billionaires now.
It takes at least $389,000 to make the club: That was the minimum threshold of adjusted gross income in 2011, the most recent year for which the IRS has final data.
But policy concerns aside, this raises an interesting question: Who exactly are the 1% ? The surprising answer: If you’re an American, you don’t have to be even close to uber-rich to make the list.
Ranking by Income
According to the Global Rich List, a website that brings awareness to worldwide income disparities, an income of $32,400 a year will allow you to make the cut. Using current exchange rates, that amounts to roughly:
Making 1% Ranks in U.S.
Of course, Americans live in the United States, contending with U.S. prices. Who constitutes the 1% if you just look at the U.S.? Not surprisingly, it takes a massively higher income to crack the top percentile of wage earners: You’d have to make $434,682 in adjusted gross income to make the cut, according to the non-partisan Tax Foundation.
And to rank amongst the highest 1% of Americans by wealth? That requires net assets of more than $7 million, based on the latest Federal Reserve figures.
Do you think your sevant government who claims to govern only the with consent of the govverned will implement these reforms?
originally posted by: ColdWisdom
a reply to: Azureblue
Do you think your sevant government who claims to govern only the with consent of the govverned will implement these reforms?
No, because if any one of those things you listed became a reality then I think even more corporations and wealthy individuals will book their money off shore.
I asked what kind of incentives could the US Government offer its citizens and companies to motivate them to declare more of their income. Not what kind of regulations could we pass.
Although I am in favor of all of those things, sort of. Bitcoin & Blockchain may be the nearest solution to the transparency issue.
I think the issue is the transparency of banking laws.
The law firm, Mossack Fonseca that leaked news of the Panama Papers has more offices in China than ANY other nation.