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How the Wealthiest Avoid Income Tax

 
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pilight



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PostPosted: 06/08/21 8:26 am    ::: How the Wealthiest Avoid Income Tax Reply Reply with quote

https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

Quote:
No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire



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scullyfu



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PostPosted: 06/08/21 11:55 am    ::: Reply Reply with quote

They buy politicians to make legislation favorable to them.



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FrozenLVFan



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PostPosted: 06/08/21 5:06 pm    ::: Reply Reply with quote

Aren't individual tax records supposed to be confidential? Question


GlennMacGrady



Joined: 03 Jan 2005
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PostPosted: 06/08/21 5:08 pm    ::: Reply Reply with quote

I don't see anything in this article that shows secret tax tricks used by the super wealthy.

Let's start with some basic premises from tax time immemorial, which apply to rich and poor alike:

-- You only pay income tax on "income".
-- The increase in market value of an asset is not income (nor is a decrease in market value a loss of income).
-- The money you get from borrowing a loan is not taxable income.

What the article does is to measure these plutocrats' non-income asset appreciation against the income tax they paid on actual income sources. This is irrelevant fluff. For example, if all I economically have is a zillion shares of Amazon that is appreciating wildly but pays no dividends, and I have no income dollars flowing into my pocket from any other source, then I have no income on which to pay income tax.

What I can do if I own a zillion shares of Amazon is to get a (tax free) loan for a quarter of a zillion dollars from a bank, using the shares as collateral, and spend it on expensive houses, yachts, sex, drugs and rock & roll.

Of course, in order to pay back the loan, I will have to acquire some income from some source to do so, and that income will be taxable. But that's enough of this boring subject.
tfan



Joined: 31 May 2010
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PostPosted: 06/08/21 9:10 pm    ::: Reply Reply with quote

The easiest way for a rich person to get out of paying taxes is to buy rental real estate. Even though houses etc. last for a century, you can treat them as if in some amount of time (think it used to be 15 years but now it looks around 30) they will become worthless - deducting a depreciation expense from your income each year. And if you live long enough to get down to zero depreciation remaining they allow a "1031 Starker exchange" where you swap buildings with some other landlord and inexplicably get to begin depreciation deductions all over again.


pilight



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PostPosted: 06/08/21 9:44 pm    ::: Reply Reply with quote

This is why raising income taxes is so unpopular. It doesn't affect the wealthy, the burden falls almost entirely on middle class wage earners.



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Howee



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PostPosted: 06/09/21 10:23 pm    ::: Reply Reply with quote

This is NOT remotely my wheelhouse, but....how do Capital Gains taxes, inheritance taxes, and wealth taxes affect the uber-wealthy?



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