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Chris DeMuth Jr. is the founder of Rangeley Capital LLC. Rangeley is an investment firm that focuses on event driven, value-oriented investment opportunities. Rangeley Capital and his value investing forum, Sifting the World (StW), search the world for misplaced bets. Rangeley exploits them for... More
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  • Amish Arbitrage 4 comments
    Jan 22, 2013 3:43 PM

    As part of Obamacare, taxes on investment income were hiked by 3.8% starting this month on AGI of over $200 k for individuals and couples of over $250 k for couples. Except… Pound for pound, going joint and several on health liabilities with 300 million perfect strangers may not sound like an optimal use of one's resources. You may consider investigating some alternatives. In a subsequent post, I will go into the more elaborate alternative of citizenship in Dominica, but for now I will focus on the altogether more incremental and obvious solution: become a Mennonite. There is lots of small print in the Obamacare legislation, so lots of scope for regulatory arbitrage. In particular, about a quarter of a million Old Order Mennonites and Old Older Amish are exempt from Obamacare's mandates and taxes. There are no penalties for filing for a religious exemption, but using modern medicine anyway. A key requirement is that one needs to link up with a qualifying sect that has existed since 1950.

    To learn more about the life that you have to look forward to, consider watching Witness.

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Comments (4)
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  • SevenCostanza
    , contributor
    Comments (46) | Send Message
    Ha - I like it! There are some execution costs to think about: I believe tithing would be appreciated (though not mandatory depending on the order). The 3.8% savings could fund a healthy offering, but it doesn't get you to the traditional 10% tithe. Although tithing to a non-government organization is intrinsically more appealing than having money confiscated by the government.
    23 Jan 2013, 11:59 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11755) | Send Message
    Author’s reply » A very good point. I think that the utility/positive externalities from the tithe beats the 3.8% such that the benefit is greater, even for a generous congregant. Also, to take the edge off I tithe net.
    23 Jan 2013, 12:04 PM Reply Like
  • jaginger
    , contributor
    Comments (816) | Send Message
    And don't forget that the tithe is tax-deductible! So, it really only costs you 10% (1 - marginal rate.)


    If you tithe on net and have a high marginal rate, you could be in the ballpark of that 3.8% (plus you'll enjoy the positive externalities.)


    And, I know a ton of Amish if anyone cares to pursue it!
    11 Sep 2013, 05:42 PM Reply Like
  • Jbgoose
    , contributor
    Comments (3348) | Send Message
    If you do it; then it gets even better once you obtain more rolling farmlands than about anyone. Then hit oil. Nice twist Chris.
    10 Jul 2014, 11:42 PM Reply Like
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