How The Wealthy Slash Their Income Tax Bills

Legal deductions and exemptions etc. made by the rich for the rich does not equate with ethical, or progressive or dare I say it fair.

According to the book the Millionaire Next Door and Stop Acting Rich both by Thomas Stanley, a large % of millionaires have never made more then 100k a year. They live in modest homes in modest neighborhoods. Many own smal business' or have large investments. That's the key to it. They live below their means and their very happy.The idea is to reduce realized income and increase investment income.

Remember the Golden Rule. He who has the gold makes the rules. Been that way throughout human history.

The wealthy can buy boats, airplanes and income property, there you get depreciation that is a “Tax Deduction”. To get wealthy, you have to learn the tax code.

I'll make a deal with congress... I will pay more in taxes they eliminate government assistance to anyone who spends more than $50 a month on tv (sat. tv, cable, or netflix account), has a smart phone, or purchased the new Air Jordans. If you can afford these things, you don't need government assistance.

I find it tough to swallow that you need help to buy food or housing assistance for your family but you can afford $180 sneakers and pay $100 plus a month for tv each month as well as an Iphone for $100 a month.

If you want more of something subsidize it, if you want less of it tax it- Basic economics- as long as we continue to subsidize a persons bad choices i.e. dropping out of school, failing to learn productive job skills, out of wedlock pregnancy, or failure in being a productive member of society you will get more of these people, if you penalize success with higher and higher taxes you will get less people who want to become successful. One political party loves loyal voters who depend on the government for their daily existence, can you figure out who they are?

So how come the article left out ALL mention of the Alternative Minimum Tax (AMT) which eliminates nearly every deduction and taxes all income at 28%, no matter how rich you are? In fact, the AMT was created in 1969 specifically to ENSURE that the rich do pay taxes, no matter how many deductions they try to take.

You want the boomers to retire and move out of the job market? Well get the FED to stop artificially lowering the interest rates. If secure sources were paying 4-5% many could leave now but a current rates they are stuck.

Tax evasion is a crime, yet overspending and reckless spending by those that forcibly take those tax dollars is not a crime. Hmmm. Please vote for smaller government and more individual freedom.

It's amazing how many posters display the the extraordinary level of their ignorance.

Two points of bias I'd like to mention. Article states, " _Charities_ This tax deduction helps to provide more assistance to people who truly need it. " Does that include the attendees of elite with massive endowment funds? Opera companies with special events for large donors? Those attending the gala opening wine/cheese event at the art museum they donated to? Churches whose massive structures rivaling medieval cathedrals?
Article states, “_Investment Income_ Employees lose out on the higher wages and salaries their employers could have paid them if not for the additional tax.” Yeah, cause I’m sure the employers are just dying to pass on more to their employees. This wouldn’t just be added to their retained earnings, would it? Used to be that a business existed to make a family rich – they had some incentive to treat employees and customers of the business they were passing to their kids with some concern. Now corporations are self-perpetuating existing to make shareholders rich – anything can be excused if it is in “the interest of shareholders”. Rip off the customers, rip off the employees. In the end rip off the shareholders who will see decreased value – doesn’t matter cause the dirty secret is, the corporation doesn’t exist to make shareholders rich – that’s just the cover for their dirty deeds. The corporation really exists to make the CEO, VPs and Board rich. If you don’t believe me, you have either never worked for a corporation or are an ignorant peon, too far down the reporting structure to have a clue.

The author seems make the new definition as being rich as being able to max out your pretax 401K. If you manage to save a reasonable 15% of your income for retirement in a 401K, and max it out, you made $111,000/yr. So that's the new rich definition? Seem OK?

The top 10% currently pays for 70% of all federal income tax collected. Top 10% starts at about $110k a year.

For "B" -- the current law (at least so far) on the inheritance tax is to allow a $5 million exemption before the taxes ($35% for everything over $500,000). That allows for the assets of family & small businesses, without forcing them to be broken up and sold off. Also, most heirs of fortunes usually squander or disperse the fortunes completely by the second generation (grandkids) -- "redistributing" them into the economy.

But that doesn't mean that the wealthy are tax criminals.

Who writes the tax laws for them for their advantageous untaxed earnings? The rich have a tax shelter by contributing campaign donations to "their" Representative, who are themselves, rich.

Boondoggle: funded by the government out of political favoritism that is of no real value to the community or the nation.

Congressmen: work of little or no value done merely to keep or look busy. "of course, if you look at how much richer they become since they were elected to office, you know who they have been spending time with at the golf course, their interests and not ours."

Favoritism, Cronyism, and Nepotism: Our Representative Government, the best influence money can buy.

Now I have to go throw up, it turns my stomach thinking about it. To know, We live in America with a Dumbocracy where The People are second class with an educational system dumbed down to less than a Third World Country. Where children walk around looking like dopes. Where children younger than 9, walk around looking like prison inmates, acting and imitating punks. Where children grow up with nothing more than The Streets of Social Decay, adding to it, creating a cultural influence of misbehavior, violence and sexual promiscuity, publicly shared as the Norm of Society, from all the dollars the rich make off of the media advertising, packaging and selling societal decay to be marketed to a neighborhood near you. Good luck with the kids, since they don't value Conservative Rules of our grandparent because they want to fit in with their peers at school in order to have friends.

All perfectly legal and good things to do. Charitable contributions are, of course, to be encouraged, as is saving for retirement. Taking risk and investing in companies that create jobs and build our economy is also to be encouraged (hence the lower tax rate if the investment yields a profit and is held long-term). Too bad the article makes it sound like the "rich" are doing something evil.

takes money to made money!!---get that seed money and do drips!!

Earned Income Credit costs the US $70 billion more in revenue loss than the lower capital gains taxes do, but I dont hear anyone screaming about lower income folks getting a bonus check at the end of the year.

Gee, so the moral of the story is that if we don't make enough we don't get the luxury of the tax breaks? Well isn't that convenient and expected, that the wealthy design the tax code that benefits their status and behavior over that of the rest of us.
IN AMERICA, THE GAME IS RIGGED AND WE ALL KNOW IN WHO'S FAVOR!
And the wealthy wonder why the rest of us 99% despise them? We're not stupid, we're just not privileged. We're quite aware of how most of them made their riches.

When we talk about 'millionaires and billionaires', we are talking net worth, but the article is about taxes, which is paid on income, not net worth, so its misleading. Those people who earn 100,000 to 1 million a year AND are paid with a W2, have virtually no way to avoid paying taxes. Unless ofcourse you own the company. But if you draw a paycheck, you are paying the bulk of taxes and there is no body protecting you. The city, county, state and federal politicos are ALL coming after you, demaining your success while all the while confiscating it for their own political purpose.