How The Super-Rich Avoid Paying Taxes

Tyler Durden's picture




 

If you're one of the 1% of Americans who control over 40% of the country's wealth, life is full of choices. Among them - how best to keep all that money away from the government? The U.S. economic system offers no shortage of loopholes allowing the ultra-rich to shortchange Uncle Sam. The following infographic explains how exactly do the super rich hide that much money from the government every year?

 


Source: TopAccountingDegrees.org

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Fri, 02/15/2013 - 21:28 | 3248388 Xibalba
Xibalba's picture

If the USA can print it's own currency, why does it need to collect taxes at all?  

Fri, 02/15/2013 - 21:45 | 3248433 ACP
ACP's picture

Speaking of printing money, those 3D printers are getting mighty interesting.

Fri, 02/15/2013 - 22:03 | 3248494 unrulian
unrulian's picture

Put it in a PVC tube....where's that fucking pvc donkey when you need him?

Fri, 02/15/2013 - 23:33 | 3248680 Buckaroo Banzai
Buckaroo Banzai's picture

You have to tax for two reasons:

1) ensure a way to pay the interest on the debt that is automatically incurred when the money is printed. Remember, we don't print our own money; rather, we borrow it AT INTEREST from the federal Reserve who prints it for us. It is BORROWED into existence, not just printed willy-nilly, silly!

2) you also need to create a built-in demand for the fiat money. Because what would happen if everyone stopped using it? Nobody would want dollars, except, you'd still have to pay your taxes in dollars. So you'd have to figure out a way to earn those somehow.

Sat, 02/16/2013 - 00:29 | 3248786 ManOfBliss
ManOfBliss's picture

1. It could be printed willy-nilly if the government wanted it to. They simply revoke the charter for the Federal Reserve, take back control over the money creation, and manifest currency at will.

2. Correct.

Sat, 02/16/2013 - 01:29 | 3248861 jeff montanye
jeff montanye's picture

the post doesn't appear to mention that appreciated assets' capital gains are reduced to zero (cost basis becomes current market value) upon death of owner.  this allows, for instance, sam walton's heirs to get their walmart stock and never pay tax based on his very low cost basis, hold it and pass it (capital gains) tax free to their heirs.  this is why the rich so wish to repeal the estate/death tax which, although with some loopholes of its own, is the main obstacle to true dynastic wealth in the u.s.

Sat, 02/16/2013 - 08:22 | 3249111 Supernova Born
Supernova Born's picture

Why would one have to hide or shelter money that doesn't exist...yet?

For those of genuine pedigree? Just print that shit up when needed out of the ether. Free of taxes? Fuck that! Fresh baseless fiat "money" is 100% free of "work"!

Sat, 02/16/2013 - 10:05 | 3249214 Buckaroo Banzai
Buckaroo Banzai's picture

.

Sat, 02/16/2013 - 10:11 | 3249229 Bicycle Repairman
Bicycle Repairman's picture

Taxation is a form of control and the 1% are the controllers.  I'm surprised they pay anything.

Sat, 02/16/2013 - 11:12 | 3249317 Imminent Crucible
Imminent Crucible's picture

Please don't use the term "the 1%". It makes you sound silly. 1% of the USA is more than 3 million people. You don't really think that the control decisions are made by 3 million people who get together in the convention room at the D.C. Hyatt.

The real tally of The Powers That Be, the true "controllers", is less than 1% of 1%.  Let's call them the .001%, and then let's stop taking orders from a handful of rich trailer trash.

Someone here needs to draw up the flow chart with the .001% at the top, their many lieutenants (Bernanke, Obama, etc) underneath them, then the layers of commissars, policy wonks, media heads, the Power shills like Krugman, Galbraith, Stiglitz, and so on all the way down to the vast phalanxes of gendarmes who are here "to Serve and Protect"--the looters, that is.

Sat, 02/16/2013 - 12:19 | 3249419 Bicycle Repairman
Bicycle Repairman's picture

Silly?  The "1%" is just a metaphor.  The actual percentage is .00436%.  Give or take a percent.

Sun, 02/17/2013 - 06:25 | 3251003 Papasmurf
Papasmurf's picture

Your flow chart would look like an Herbalife org chart.

Sat, 02/16/2013 - 12:20 | 3249422 THECOMINGDEPRESSION
THECOMINGDEPRESSION's picture

If everyone stopped paying taxes today, there is nothing they could do..not a thing

Sat, 02/16/2013 - 18:40 | 3250276 11b40
11b40's picture

WRONG.

Turn off the utilities, close the hospitals, suspend police & fire protection, shut the airports.....get the picture?

Nobody likes paying taxes, but most realize they are a requirement for any kind of sciety you would want to live in.  The point is, make sure those who get the most benefits pay the most back.....and that is not what we have now.

I don't know what effective rate you pay, but Romney, to pick a familiar and recent example, pays less than me.  I really don't give 2 shits about what is legal, but the fact that these wealthy pricks have had the tax laws written in their favor (by other rich pricks) is disgusting and wrong.

Sat, 02/16/2013 - 20:05 | 3250438 Blue Boat
Blue Boat's picture

@11b40, "make sure those who get the most benefits pay the most back"

Using your example of Romney --- how does he get more benefit from the system by paying, for example, $5,000,000 in taxes versus someone who pays $100,000 in taxes or half of that?

Why is the RATE so relevant to you?  Perhaps look at actual tax dollars paid.

Sun, 02/17/2013 - 09:25 | 3251073 11b40
11b40's picture

Are you really such a simpleton?

Tell me quick....what would your basis be?  How would you determine the tax bill for each of us?

Tue, 02/19/2013 - 00:39 | 3255114 Redhotfill
Redhotfill's picture

Infant Tree Sgt brilliant!

Sat, 02/16/2013 - 13:39 | 3249596 Coke and Hookers
Coke and Hookers's picture

Printing money equals taxation. When you print money in a fiat system, it devalues monetary assets (pension funds, saving etc) and reduces living standards through inflation. This is a de facto asset transfer from people with savings/assets/income to the people who receive the printed money.

Sat, 02/16/2013 - 17:06 | 3250020 Rick64
Rick64's picture

Correct. Ron Paul told Bernanke that, and Bernanke agreed.

Sat, 02/16/2013 - 01:36 | 3248866 Xibalba
Xibalba's picture

Doesn't the Fed just turn around and remit the interest back to the Treasury?  Sounds like a ponzi-printing-orgy that Bernie Madoff would be proud to run

Sat, 02/16/2013 - 01:37 | 3248868 Calculated_Risk
Calculated_Risk's picture

3. Power. By setting up a complex tax code the government can take anything they want from whomever they want by citing some obscure tax violation. Remember, Al Capone was taken down by tax violations...

Sat, 02/16/2013 - 08:12 | 3249117 hooligan2009
hooligan2009's picture

bank notes have no interest rate...and....there would be no taxes to pay..so no need to work...pretty much like the fed and other bank screen jockeys/algos...is that "work"? did they make that?

money used to be a measure of work done, value added. now that money is printed, there is no work done or value added, so why not just print it for everyone rather thanthe select few (banksters and corrupt polticial scumbags)

Sat, 02/16/2013 - 12:48 | 3249489 ChacoFunFact
ChacoFunFact's picture

Ithaca Hours Currency can be used privately but you're right -  any sales tax would have to be paid with money signed by the secretary of the treasury.  Does anybody know if Ithaca Hours Currency is redeemable in to hours of labor like time bank money (Hour Exchange Portland)?

 

p.s. end usury

Fri, 02/15/2013 - 22:21 | 3248545 seek
seek's picture

Yup, the 3D printing for guns guys, Defense Distributed, recently made a 30 round 3D printed magazine, code-named Cuomo (lol) and had it function for several hundred rounds without failure (the same can't be said for the printed lower they made earlier.)

I still think it'll be many years before they're as good as home CNC machining is (which is subtractive rather than additive like printing) but both technologies have come down so much in cost and have become so accessible that it's hard to imagine something big isn't going to come out of them eventually.

Fri, 02/15/2013 - 23:14 | 3248643 foodstampbarry
foodstampbarry's picture

Control.

Sat, 02/16/2013 - 03:48 | 3248973 Spigot
Spigot's picture

They forgot to add: Work for your corporation making your compensation a loan to the corporation, then receive "interest" on the loan (15% tax rate on interest income) and the principle is never paid off, therefore the income stream never stops.

Sat, 02/16/2013 - 10:20 | 3249243 GMadScientist
GMadScientist's picture

But make sure you're ahead of investors and creditors in the bankruptcy buffet line.

 

Sat, 02/16/2013 - 12:03 | 3249383 akarc
akarc's picture

yeah but using a 3D printer will give you plastic money. Oh wait, what amI talking about? Never mind..........

Fri, 02/15/2013 - 22:10 | 3248516 schoolsout
schoolsout's picture

Not many yachts go up in value...kinda miffed at the last part.

Also, if your boat has simple accomodations such as galley, head and a bed....plenty of small boats qualify for this...not necessarily a "rich" man's avenue of "avoiding" taxes.

Fri, 02/15/2013 - 22:21 | 3248546 Stuck on Zero
Stuck on Zero's picture

Yachts with 24k gold ballast tend to go up in value with time.  Gold doesn't rust.  It's good ballast.

 

Sat, 02/16/2013 - 01:26 | 3248858 Mike Cowan
Mike Cowan's picture

Gold is good ballast, isn't it?

Sat, 02/16/2013 - 07:16 | 3249085 Seer
Seer's picture

Ready-made boating accident!

Mon, 02/18/2013 - 17:25 | 3254093 BigJim
BigJim's picture

You'd think we'd learn!

Tue, 02/19/2013 - 00:42 | 3255125 Redhotfill
Redhotfill's picture

"Not many yachts go up in value...kinda miffed at the last part"

 

They are hard assets and will go up just due to inflation, expecially the hyper kind.

Fri, 02/15/2013 - 22:12 | 3248524 Yes_Questions
Yes_Questions's picture

 

 

So that you cannot acquire enough dough through wages to get off the hamster wheel before 67YO.

Sat, 02/16/2013 - 11:24 | 3249322 Imminent Crucible
Imminent Crucible's picture

Collecting wages was never a route to financial independence. Wages are what you get when you work and create value for someone else. There are no drivers for higher wages in the west these days, any way. The corporate oligarchs will continue to arbitrage the labor cost differential between developed West and developing East.  If China gets too expensive, they move operations to Vietnam.

The best route to freedom is to work for yourself while keeping your living expenses as low as possible. Eventually, your income from productive assets surpasses your total cost of living. At that point, you're free.

Joe Dominguez' book Your Money or Your Life was especially useful in getting me off the hamster wheel.

Fri, 02/15/2013 - 22:17 | 3248537 e_goldstein
e_goldstein's picture

To limit upward social mobility.

 

Fri, 02/15/2013 - 22:27 | 3248561 Buck Johnson
Buck Johnson's picture

They didn't tell us ALL the ways that the super rich move their money, not all of it.  One is to give up your citizenship and move to a lower tax country.  The other which is more secreative is to be invited to institutions/banks that help to hide your money and move it for you for a fee with help from govt..  There's some more but they don't talk about that because that only goes to clients who are billionaires and connected.

Mon, 02/18/2013 - 07:41 | 3252574 StandardDeviant
StandardDeviant's picture

And you know this because...?

Fri, 02/15/2013 - 22:28 | 3248565 Buck Johnson
Buck Johnson's picture

They didn't tell us ALL the ways that the super rich move their money, not all of it.  One is to give up your citizenship and move to a lower tax country.  The other which is more secreative is to be invited to institutions/banks that help to hide your money and move it for you for a fee with help from govt..  There's some more but they don't talk about that because that only goes to clients who are billionaires and connected.

Sat, 02/16/2013 - 00:55 | 3248826 willwork4food
willwork4food's picture

..why does it have to collect taxes at all?

 

Two reasons:

 1.Perception of scarcity 

2. Controll over State & Federal funded programs, i.e. schools, colleges , church 503b, grants.

When a state decides to fight the fed, they risk the money the fed delivers. They simply have to repatriate the federal lands DC stole and start development to make up the loss.

Sat, 02/16/2013 - 02:04 | 3248908 Dingleberry
Dingleberry's picture

You forgot the main method....all of these tricks were bought for fair & square by TPTB from Congress.  There are infinite ways to scam. That's all these guys think about 24/7. 

Sat, 02/16/2013 - 07:40 | 3249096 world_debt_slave
world_debt_slave's picture

It is called slavery, the W-2 slaves are born and die on the rich's plantation.

Sat, 02/16/2013 - 08:14 | 3249118 hooligan2009
hooligan2009's picture

apologies...posted at wrong place:

 

bank notes have no interest rate...and....there would be no taxes to pay..so no need to work...pretty much like the fed and other bank screen jockeys/algos...is that "work"? did they make that?

money used to be a measure of work done, value added. now that money is printed, there is no work done or value added, so why not just print it for everyone rather thanthe select few (banksters and corrupt political scumbags)

 

Sat, 02/16/2013 - 10:14 | 3249231 steelhead23
steelhead23's picture

Firstly, the U.S. Government does not control the money supply - the Federal Reserve System does.  Secondly, even if the U.S. did issue money directly and could cover all costs of government, simply by printing, it would have to levy taxes to prevent an excessive money supply (aka inflation).  You might enjoy the Creature from Jekyll Island.

Sat, 02/16/2013 - 10:27 | 3249255 Enslavethechild...
EnslavethechildrenforBen's picture

The U.S. Military uses the Fed as a front.

Bitchez.

Sat, 02/16/2013 - 16:46 | 3250045 Rick64
Rick64's picture

I don't agree, they would just need to keep the money supply in proportion to the population and the economy. Many would argue that they wouldn't be responsible and would print too much thereby devaluing the money, but isn't that what we have now. I don't think the results would have been any worse than the Fed. They also would be directly accountable because they wouldn't have the Fed obscuring the truth. Also they wouldn't be borrowing money so they wouldn't have to pay interest.

Sun, 02/17/2013 - 08:19 | 3251036 auric1234
auric1234's picture

Secondly, even if the U.S. did issue money directly and could cover all costs of government, simply by printing

If? You just described its main activity!

 

Fri, 02/15/2013 - 21:29 | 3248393 scottch
scottch's picture

Populist drivel.  You don't have to be super-rich to take these deductions.These are staples of the middle class, too.

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