Foundations and Trusts, how the UBER RICH really subvert taxation.

I have heard all kinds of arguments regarding raising taxes on those that make more money. I just wanted to let folks know about what the UBER RICH really do to sidestep taxation.

This is just going to be a breakdown from what I know by experience and knowledge of accounting and taxation. There will be no links, if you refute my assertions, I would appreciate a citation.

The UBER RICH, those that make enough money to make it feasible to hire lawyers to set up tax havens, never really pay income taxation. Think of it this way, if you run a business, would you rather pay the income tax plus social security plus medicare which comes to about 50% in the higher tax ranges or would you rather pay a corporate tax rate where you can deduct all of your expenses, including what you eat?

Think about it, let us say you make 50k per year. Your expenses for living cost you about 42-48k per year, would it not be nice to only pay taxation on your actual profit of only 2k-8k per year. See, this is how it works for the UBER RICH. They set these foundations and trusts up so that they are not actually paid anything. Everything is in the corporate components, they are given like a salary of $1 per year or something ridiculous. This is all completely legal according to the tax laws. But you and I are not allowed to do this because the cost is prohibitive to set up these tax schemes.

Now, you have these folks in government and the UBER RICH that talk about raising the individual tax rates to higher percentages. Do you actually think that is so they have to pay higher rates? Of course not, that is to create a barrier for folks that could compete with them. If you know how cost accounting works, with calculus formulae, there is a supposition that you have to either give a huge chunk of your money to lawyers to set this up or you cannot go higher.

It is a rigged system and has been for about 100 years. Imagine if the tax system was set up where what you spent was what you are taxed on? Would that be a better system than what you earn, especially if some folks never actually earn a dime by the way they set up their accounting system?

Remember, the more you earn, the more you are taxed. But imagine if you earn NOTHING and are only supplied your money by a trust or foundation.

Think about it.

I don't mind paying my crazy high taxes because it means I'm making some crazy money.

Maybe the average joe should go talk with a good CPA and see what advice they give you...its worth a shot.

reply to post by topdog30


Well you are right, at certain earnings a CPA will help you save money, but once you get to a certain point of earnings, you do not pay individual income taxation.

Just for an example, let us say someone makes 100 million per year. That person will not allow that to be listed as individual income, they will hire several lawyers and accountants to get income to be defined as something else. That is just the way our tax system and accounting loopholes is set up.

Why is it the stuff I bring up no one wants to argue?

You can agree even though you are on the other side of the debate, it does not mean you are capitulating!

If you want to make the tax system fairer, then it needs to be simple. Tax law is big and complex with heaps of loopholes if you have the money and know where to look. Trusts and foundations are one way hide money, off shore accounts, private banks and plenty of other systems exist.

reply to post by kwakakev


K.I.S.S.

Keep It Simple Stupid!

Nahhhhh, if the tax system is simple than it would be fair, why the HELL would the government want the tax system fair!?

tax laws? I didn't think there were any. They are statutes which are legal not lawful. There's is a difference there. I know of a few freeman who challenged their tax returns and have succeeded using a notice of conditional acceptance. They ask the tax man to prove their claim. They may threaten you etc but if you don't buckle then your a winner. I'm in the uk so unsure if other countries have any successes. I'm speaking of self employed freeman not paye!