In today’s “Money Stuff” at Bloomberg, Matt Levine describes a way that the wealthy have found to “transmute” interest income into capital gains. Why? Because the tax rate on interest income can be as high as 37%, while tax on capital gains is around 20%.
“We spent seven years figuring out how to do this,” said Wesley Gray, the ex-Marine and chief executive officer of Alpha Architect. “My job is just to deliver all the value I possibly can to my shareholders, within the law.” It’s that last prepositional phrase that ought to give pause. Whenever someone feels the need to add “within in the law,” it often suggests, let’s just loosely say – though we could say it literally –, the fashioning of a Gray area.
The Fourth Policeman 