Interesting fact: Despite having one of the lowest tax rates in the nation, South Dakota ranks in the top 5 for fiscal stability and lowest state debt, and also maintains an average to above average ranking for public services such as infrastructure and education.
Sources, sources, and sources. SD is top 5 in the short-term fiscal stability[1]. SD may be top 5 in lowest state debt but they are 16th in per capita debt[2](that's below average). Hey I guess you're right about the public services, a local news paper reports they are also "above average"[3].
"not much else" ? Mount Rushmore is a tourist trap - the view is basically the same as looking at a photo. Visit the Black Hills themselves, and of course the Badlands.
As for the article's actual gripe, I can't tell what it is besides an overembellished "rich people have a lot of money and you don't". AFAICT the tax advantage of a trust is the same as retirement accounts, but retirement accounts are essentially limited to one (and a half) lifetimes while a trust can go on forever. The tax advantage comes from having enough money to be able to commit so much of it on a long time scale, just like having the stability to give a newborn $15k per year to reduce your eventual estate.
Which yes, is a problem. But not due to the exact protections a trust can provide from creditors, which seems to be the article's only bit of substance. In fact, given the ongoing "healthcare" trainwreck, the middle class really should be looking into trusts to protect themselves against hospital extortionism. Not having your nest egg available to pay a fictitious $100k emergency room bill gives you a much better shot at not losing that game of musical chairs!
This article reads like a few I have seen in the NYT— it’s written in a populist tone, but it simultaneously reads like an advertisement: “Want to park money somewhere anonymously? Try South Dakota!”
The NYT has run similar articles on Cook Island Trusts and the use of anonymous LLCs to purchase real estate.
I was born and raised in South Dakota. I still have family and friends there.
It's bitter cold in the winter, and summers can be hot. The people are tough by nature, they have to be. I never heard of this trust issue before.
I expect most South Dakotans would favor it. Nature has given them few advantages over other states. (New York has history, and the ocean to bring immigrants. California is blessed with great weather. The southern states have no harsh winter. Etc) It's probably considered good to have at least some factors that drive money their way.
This article is pretty bad at actually conveying information. It’s nominally about trusts in South Dakota, but first there’s a story for many paragraphs about the history of some unrelated laws that make a few random South Dakotans look bad.
So the main thing these South Dakota trusts actually do isn’t evading taxes, it’s just lasting an indefinite amount of time, being private, and not putting many restrictions on what you can do with the money. None of those seem that bad to me.
Way down at the end of the article, it even mentions that many other states have now copied the South Dakota trust rules, so there’s nothing particularly unique about them nowadays, and South Dakota changing their laws probably wouldn’t have any effect. Well okay, that kind of defeats the whole point of the article though, which was that South Dakota was doing something bad.
The one interesting thing to me is that when cracking down on offshore accounts, the US created some international standards that the US states don’t have to follow themselves. In a sense that was a protectionist move, which I didn’t realize before.
When you decamp from SF to Texas, or NYC to Florida, you avoid a significant amount of taxes whether you made the move specifically for that or not. Similarly, if you are in Europe and change your primary residence to Monaco or Luxembourg, you accomplish the same thing.
There is a disconnect when you do something and someone vastly richer does something. There is a line above which it is immoral and wrong, and below which it’s totally OK because you aren’t rich and you are just a good person making a financial decision.
Probably we should pass laws that stop anyone from making any decision that avoids taxes. It’s not fair if you are raised and educated in SF and then take all your money away from the future generation there. Logically it must follow that you owe the community that raised and nurtured you a lifelong duty of taxes. It’s very wrong how people move from SF to Texas.
Obviously I’m not in favor of limiting freedom of movement, that would be insane. I’m merely advocating for fairness. Why is it wrong for someone to move their wealth to South Dakota to avoid taxes, but OK for someone to move from SF to Texas and avoid paying back the community that raised and nurtured them?
Maybe we need to have the government track where you reside every day, and then your taxes are paid proportional to the communities in which you lived. This would be some sort of “social tax” which is the fair solution.
