Rich Lists Are in ‘Public Interest,’ a German Judge Rules |
| Rich Lists Are in ‘Public Interest,’ a German Judge Rules Posted: 08 Apr 2011 08:42 AM PDT Rich lists seems to be one of the fastest growth areas of the business media. After Malcolm Forbes kicked off the trend in 1982 with his Forbes 400, publications around the world have followed. Britain, Germany, Australia and others all have their own rich lists now, while China, India and others are quickly catching up.
Readers like the lists because they are, well, entertaining. But is there a legal justification for ogling the fortunes of the fortunate? A rich German recently sued the country's Manager Magazine for publishing his name and assets as part of its annual ranking. The man's lawyer said he aimed to bring about "a fundamental change in the way the law dealt with such information," according to an article on Germany's The Local news site. "A private man does not have to put up with appearing in such a public hit parade," the attorney said. (Clearly, he hasn't met Donald Trump). The suit also challenged the magazine over what he argued were inaccurate figures about his net worth. (Or perhaps he has met Donald Trump). Luckily for us wealth reporters, the judge in the case, Thomas Steiner, rejected the complaint. He said there is "legitimate public interest in the assets of people who are worth more than €100 million," as well as the origins of their fortunes. The judge said the information had to be correct, of course. But since the rich German guy refused to disclose his assets, the magazine had no way of confirming the information, the judge said. A rep for the magazine said the case sent a simple message to the rich when dealing with rich lists: "Put up with it."
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| Trusts for the Rich Flock to Low-Tax States Posted: 07 Apr 2011 11:59 AM PDT It isn’t just wealthy taxpayers that are threatening to move to lower-tax states. Their trusts and family offices also are shopping for the best tax deals.
The family office of the Johnson family, which runs Fidelity and which has a net worth in the billions of dollars, recently moved from Massachusetts to New Hampshire, which doesn't tax many forms of income from trusts. (Their offices are now a mere three miles over the border, lest they also sacrifice convenience). New Hampshire, in fact, has become a kind of mini-Switzerland for wealthy Northeast families. Trust assets under management by banks and trust companies up north have jumped 70% over the past five years, to $311 billion in 2010, from $184 billion in 2005, according to the New Hampshire Banking Department. State. The Boston Herald says trust companies are "cropping up like tax-free liquor stores in southern New Hampshire." Can we blame them? Of course not. Yet as competition for wealthy taxpayers and their trusts escalates–given state dependence on taxing their income–the arms race for favorable tax treatments is likely to escalate. New Hampshire, for instance, only got into the game after watching South Dakota set up a similarly favorable tax regime. South Dakota, in fact, had such an influx of trusts that it now is trying to rein in its reputation as a trust tax haven. More states are likely to follow suit. And unlike tax residency, which actually requires rich people to live in their new, lower tax state, trust locations have little or no impact on the daily lives of the beneficiaries. One solution is to create a uniform tax treatment at the federal level that will prevent states from poaching each others' assets. That, of course, will never happen, because some states need the revenue.
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