ProPublica: How Peter Thiel Turned $2,000 In A Roth IRA Into $5,000,000,000

Following up on my previous posts (links below):  Pro Publica, Lord of the Roths: How Tech Mogul Peter Thiel Turned a Retirement Account for the Middle Class Into a $5 Billion Tax-Free Piggy Bank:

Roth IRAs were intended to help average working Americans save, but IRS records show Thiel and other ultrawealthy investors have used them to amass vast untaxed fortunes.

Billionaire Peter Thiel, a founder of PayPal, has publicly condemned “confiscatory taxes.” He’s been a major funder of one of the most prominent anti-tax political action committees in the country. And he’s bankrolled a group that promotes building floating nations that would impose no compulsory income taxes.

But Thiel doesn’t need a man-made island to avoid paying taxes. He has something just as effective: a Roth individual retirement account.

Over the last 20 years, Thiel has quietly turned his Roth IRA — a humdrum retirement vehicle intended to spur Americans to save for their golden years — into a gargantuan tax-exempt piggy bank, confidential Internal Revenue Service data shows. Using stock deals unavailable to most people, Thiel has taken a retirement account worth less than $2,000 in 1999 and spun it into a $5 billion windfall.

To put that into perspective, here’s how much the average Roth was worth at the end of 2018: $39,108.

And here’s how much $5 billion is: If every one of the 2.3 million people in Houston, Texas, were to deposit $2,000 into a bank today, those accounts still wouldn’t equal what Thiel has in his Roth IRA.

What’s more, as long as Thiel waits to withdraw his money until April 2027, when he is six months shy of his 60th birthday, he will never have to pay a penny of tax on those billions.

• Barron's, How Peter Thiel Turned $2,000 in a Roth IRA Into $5,000,000,000
• Bloomberg, Thiel Gets Tax Edge With $5 Billion in Roth IRA, ProPublica Says
• The Guardian, Billionaire Peter Thiel Amasses $5 Billion In Tax-Free Nest Egg in Retirement Account
• Holman W. Jenkins, Jr. (Wall Street Journal), Peter Thiel’s Taxes Aren’t the Real Story
• Inequality.org, Peter Thiel’s $5 Billion Roth IRA: Only the Size is News
• ProPublica, The Ultrawealthy Have Hijacked Roth IRAs. The Senate Finance Chair Is Eyeing a Crackdown.
• ThinkAdvisor, Peter Thiel's $5 Billion Roth IRA: Tax Pro Jeffrey Levine Weighs In
• Wall Street Journal Tax Report, What Peter Thiel’s Roth IRA Means for Yours

Prior TaxProf Blog coverage:

• ProPublica: America's Richest People Pay Little To Nothing In Federal Income Taxes (June 8, 2021)
• Dorothy Brown And David Cay Johnston Discuss Yesterday's ProPublica's Report On The Tax Secrets Of The .001% (June 9, 2021)
• Dorothy Brown On The ProPublica Tax Report, Racial Justice, And The Gig Economy (June 14, 2021)