Billionaire talking about why he bought a jet

Mooney_Driver wrote:

And if so, then rather like this, after all the 50 Million he spent on that jet went into an American Business who in turn is taxed on their profit and the workers who make them are taxed by their income rather than hide it in the Virgin Islands or elsewhere.

That is what I meant, only you used way fewer words

As long as it creates pilot jobs I think that is a good use of his money

Is that to say engineering, handling, accounting and management jobs living out of it are not good use too..?
Apologies but I could not help biting the bait

He does what everybody does, just with different numbers, and is willing to be on TV and admit it, while winding up the audience nicely

The law requires you to pay the tax due under the law.

At least he spent the money in his country.

I’ve just got a VAT return done, so I have an assignment for you guys (and especially girls, if any are reading, for they are gonna be a lot better at this sort of thing): Get his number and persuade him to donate 0.001% of his money to EuroGA. He may not do paypal but I can give him an IBAN, BIC code, or any code whatever that he wants. It will be 100% tax deductible, too

America has amazing capital allowances. Over here, it is just the Isle of Man, AFAIK, which allows this.

Yes, he would never get the 50m off his taxes in any country in Europe.

I don’t think he had to pay 50m USD less in taxes in the US either. I think what happened is that his profits got reduced by 50m USD, so depending on his company’s tax rate (I think it’s now ~20% in the US), he saved 10m USD in taxes because he could write off the whole 50m in the same year he took delivery. He states it costs him about 3m USD per year to run the jet. So he is paying 3m USD per year to save 10m USD one time (don’t think he can just sell the jet next calendar year without any impact on the 50m USD write-off). So unless he was buying the jet anyway (or had previous charter expenses nearing 3m USD p.a.), I would say it was a bad business decision.

Then again this guy is a crazy self promoter (check his youtube channel, seems he runs a real estate fund and also does sales training) and probably his jet actually pays for itself by attracting more investors / clients who want to be “private jet successful” like their guru.

Without watching the video, every “rational” individual in the financial sense would do everything he can to minimize expenses and maximize income while complying with the law. And taxes are just another type of expense. On a similar note, I also learnt in my “air transport management” lectures at uni that the “rational passenger” is one who would weigh the cost of his time into the decision of the most appropriate mode of transport, something many people forget (particularly when they choose to fly from a cheaper airport that takes thrice the time to get to…)

If you can avoid paying more tax while complying with the law would you do it? Certainly. Not doing it wouldn’t be rational. I find it a bit ridiculous when people throw in the “morality” into the story, on how “the rich” are ruthlessly benefiting from tax paid by “the poor” etc. because the reality is that the rich pay most of the taxes on one hand, and on the other the poor would be equally inclined to not pay any more tax than they legally had to should they become rich…

Jujupilote wrote:

That a jet really gives productivity and more business is another matter.

That’s a complicated one because I think it revolves around human nature. People hide less and come to closure faster in face to face meetings, even when compared to video conferencing and other competitive ideas.

It can’t cost 3M/year. The DOC is “only” of the order of 5k/hr (I believe the DOC of a 737 is ~15k/hr) so there must be extras involved. Even a crew of four pilots (you need four if you want 24/7 standby, I am told, and this is why Jeppesen started off selling their products with four licenses) won’t add much to this. So there must be other stuff included, and an awful lot of fuel.

Sure, success (and showing it) breeds success. Many years ago I used to make differential temperature controllers for solar heating. That was my first product when I left univ in 1978. The customers – the installers – were mostly chancers, wide boys, conmen, fraudsters, crooks, shysters and a fair few very charming and charismatic criminals, and they included UK’s #1 life insurance salesman (who went to jail in the end). Most were great fun – provided you got paid. The last one’s bank account was a suitcase of cash under the seat of his BMW. Well, like most of the “retail home improvement” scene has always been, I suppose.

The problem with solar heating was (and is) that you never even remotely begin to get your money back. It does only water heating (not space heating) and it cost 5k to install. Same with photovoltaics.

So you had to go after people with lots of money who wanted to look “socially responsible” in their retirement i.e. champagne socialists.

And there is a lot of them out there.

The most successful salesman ever dressed at the top end of “smart casual” (in today’s money, a jacket for 1k, 500 quid sunglasses, etc) and drove around in an open top turbo Porsche. He actually looked a bit like Liberace. This (1980s) was when a Porsche cost real money; now any 20 year old with a job and above average focus can get his hands on one. He would drive up some drive leading to a big country house and just walk in. And worked like a dream. He had an ex model wife, of course, but he ended up, in his 50s, in the arms of a 20 year old girl, with a fatal heart attack. In style to the last day – but ending like this guy

But yes, seriously, face to face meetings remain the most effective way to do business – in most cases. Especially in cultures which attach a lot of importance to personal contact.

What would I do with a few million? I could afford to employ a programmer who knows the EuroGA forum programming language

EDIT: just spoken to somebody… it can cost 3M/year, apparently, with a lot of flying, maybe 1000hrs/year. A “C” check is likely to be 500k.

Antonio wrote:

From the emotional point of view we could let envy or even ambition or judgement be our guide here and it is easy to exercise all three with a guy that exposes himself in this way. Some people could choose to give the $50M to a charity of his choice, which could even be your tax agency if you like to see it that way. Nothing is to say the guy did not give another $50M or whatever to a charity, it does not look like that but, still, it is his personal choice. I believe in freedom and I believe it is his entitlement to use his money as he pleases, as long as it is legal and he does not willingly hurt anyone.

Well, although this is a pilot forum where ‘rational’ thoughts and attitudes probably prevail (‘the money flows back to jobs’, ‘they all do it, but hidden’, ’it’s all within the law’ etc), let me provide a contrarian view. I’ll probably end up at the back side of the power curve but hope I don’t get banned here. Or lose my table spot at the restaurant on friday night in Friedrichshafen! But then I’ll go and sit with Vladimir and Airborne Again at a different table. ;)

Yes, I do get emotional about this. However, envy or ambition don’t play a role at all (the contrary actually) but judgement does. This guy’s goal in life is tax minimisation and wealth increase and nothing else. Even if he gives to charity in a serious way (which i doubt), it will be for tax reasons, that is what he portrays. Antonio, I also believe in freedom and the freedom of enterprise has treated me very well but I’d like to expand your above mentioned condition ‘as long as he does willingly hurt anyone’ into something more positive and ambitious and ‘rational’ in my definition, which is caring for this planet. No, I’m not talking about the stuff that comes out of the exhausts of his G550, although I could..

I think that a lot of people have more money than they can ever spend sensibly (insert your own definition here, but there is such a thing as surplus unless you want to buy 10 Airbus 380’s and have you and your friends and family fly these around the world 24/7 and even then some people can probably afford that easily). These people, most of whom are intelligent, can play a vital role in solving the various crises that the world is facing. Our friend in the video should reflect a bit more on his first name. If most of the billionaires (or even those in the league right below) would seriously put themselves to it, it would make a real difference. Not just the money they provide, but the inspiration and the sense of solidarity it radiates may do wonders for many to pitch in. I’m fortunate to have a close friend who is such a person. Mind boggling what he spent on charity sofar, a billion +. Very inspiring the way he targets his money efficiently and effectively towards specific goals, and he made me increase my one drop in the ocean to two ;). Although there are more operating positively, either in the limelight or not, we need more like people like him, Musk, Soros and Gates to name a few.

aart wrote:

Musk

I find that choice of ultra wealthy philanthropist interesting in the context of this discussion, given that Elon Musk’s principal business is selling a product that has by design helped thousands of his customers avoid taxes – both in the form of an US income tax credit applicable to the purchase and ongoing avoidance of fuel taxes.