
The IRS Tried to Take on the Ultrawealthy – It Didn’t Go Well - iron0013
https://www.propublica.org/article/ultrawealthy-taxes-irs-internal-revenue-service-global-high-wealth-audits
======
dalbasal
Re: the term "abuse" rather than a more concrete term like "violation."

About 10 years back, Bono (of U2) was being interviewed on irish tv. They
asked about U2's business interests (real estate and hotels), taxes, and
overseas holding companies... with a " _why don 't you pay taxes in ireland_"
implication.

Bono started with a generic " _U2 is a Businezss_ " answer but he ended with a
(IMO) an honest point that people avoid making.. because it's kind of an
admission of guilt:

"Look... We (ireland) manipulate our tax rules for all sorts of gain^. How can
it be ok for the country but not U2?"

We're an extreme example, but not that extreme. American politicians have also
been big believers in complex tax reforms/policies as a way of tweaking all
sorts of economic results.

We can't have it both ways. Either we have a "the rules are the rules"
approach or we have a principled approach. You can't appeal to the "spirit" of
a soulless ruleset.

^We have a highly "engineered" tax system, designed to encourage foreign
revenue to be silmultaneously booked and not booked in ireland. >30% of
ireland's gdp is Leprechaun money, according to Paul Krugman & some oecd
economists. It's here, but not real. Try to touch it, and it will vanish.

A lot of these rules relate to IP which is why the biggest companies utlizing
irish tax shenanigans are apple, google and other techcos. Music is also IP.

~~~
colanderman
> You can't appeal to the "spirit" of a soulless ruleset

Here's a simple razor: if the people who wrote the rules, upon learning of
what you are doing, would likely have written the rules differently to make
illegal what you are doing, it's against the "spirit" of the rules.

Example: if some tax code says, people who make below $100k must pay $10k in
taxes, and people who make above $100k must pay $20k, paying someone $99,999
to avoid extra taxes is a foreseeable consequence and therefore not an
unethical loophole. However, paying someone exactly $100k so they fall in
neither bracket and thus need not pay any taxes is probably not what the
policymakers intended; they would surely have amended the rules had they had
this pointed out to them before enacting this tax code.

Of course, this requires being a judge of intent, but what ethical framework
doesn't have grey areas?

~~~
Wowfunhappy
> Example: if some tax code says, people who make below $100k must pay $10k in
> taxes, and people who make above $100k must pay $20k, paying someone $99,999
> to avoid extra taxes is a foreseeable consequence and therefore not an
> unethical loophole.

I know you're just making an example for demonstration, but you happened to
choose a scenario that many believe is actually how tax brackets work.

Thus, it's worth reiterating: in the American tax system (and I imagine almost
everywhere), we use marginal rates for income tax. The first 100k you earn
would get taxed at the lower rate, and every incremental dollar above that
would get taxed at the higher rate.

~~~
reducesuffering
But not capital gains. 0% -> 15% -> 20% are not marginal and require careful
maneuvering to stay in the previous bracket. Why the oversight for such a
hugely relevant tax?

~~~
CompelTechnic
Capital gains taxes are marginal. You are mistaken. There are no cliffs to
maneuver.

For example, play with this calculator:
[https://smartasset.com/investing/capital-gains-tax-
calculato...](https://smartasset.com/investing/capital-gains-tax-
calculator#ZFXwG6cA6V)

~~~
fatnoah
I think that calculator shows the opposite of what you're saying. There are
different brackets depending on your overall income, but all of your capital
gains are taxed at that rate. If the gains were truly taxed in a marginal
fashion, some would be taxed at 0%, some at 15%, and the rest at 20%.

I can also confirm this with my own taxes. I only had $10k in long term
capital gains last year, but the entire amount was taxed at 23.8% by the
federal government.

~~~
CompelTechnic
That's because your other income raised you up to that bracket.

~~~
yebyen
So are they marginal, or based on brackets? Cause it sounds like they're
bracket-driven, if the entire gain was taxed at 23.8%.

What part am I not understanding? Is the idea that capital gains tax itself is
marginal, but if your other income has already put you in that higher bracket,
then you pay that rate?

Edit: playing with the knobs on the calculator seems to indicate that's what
it is.

~~~
danzig13
Capital gains is added on top of regular income so if you had $450k regular
income then $50k long term capital gains, $38,850 would be taxed at 15% and
the remainder at the top rate of 20%

~~~
yebyen
Thanks for explaining it clearly. I hate to ask for more, but it's a rare
opportunity that my question about capital gains is not completely off-topic.
Can you (or anyone) tell in a similar idea about how Capital gains losses
work?

I understand that there is a limit to how much loss you can claim against your
gains in the coming year, and that you can claim the loss as a deduction in
following years up to a limited number of dollars each year, and limited
number of years, but what I don't know is what the losses can be claimed
against.

If I have capital losses this year, and I'm getting a refund this year for my
income withholdings overpayment... then next year say I owe income taxes from
underpayment, but I have that deduction from the previous year, can I cancel
them out?

Or do I need to report a capital gain in the next year in order to be able to
"use up" the previous year's loss as a deduction? My understanding is I can't
use capital losses to pay income taxes, but I am not a CPA.

Perhaps this is a question for my accountant, and this should be a billable
conversation, but this is just a question I've had since I started thinking
about capital gains, and I've never been able to answer it for myself.

~~~
danzig13
I’m not a CPA or accountant. Investopedia has a few articles on the subject.

I think capital losses can completely cancel any capital gains - kind of
obvious if you think about it - if you lose $10 on sales of stock A and gain
$10 on sales of stock B you had not income from your activities.

In addition, you can apply $3,000 in losses to reduce ordinary income (not
taxes directly) and carry the remainder to following years. So on sale of
stock A you lost $5,000, on sale of stock B you gained $1,000. You can
eliminate the gain, have $4,000 left, reduce your taxable income of $100,000
to $97,000 using $3,000 more of the loss, then have $1,000 left over for
following years. In the next years I think you can use that loss to reduce
gains then income in the same way.

Hope I’m right and that is clear.

~~~
yebyen
Thanks for answering. That is clear, and it makes sense.

------
ptero
I suspect most of those strategies are perfectly legal under the current
(insanely complex) US tax laws. Instead of trying to further complicate those
laws to outlaw a few arcane tax strategies (likely in vain; more complexity
likely leads to more arcane loopholes) we should be _simplifying_ our laws. It
should be dead simple to determine legality and IRS should be left with simple
enforcing function.

I would be much in favor of flat rates with negative tax rates on first $X to
help bridge the gap from minimum wage to living wage. And a better safety net
for those who cannot work. My 2c.

~~~
frotak
Even with a concise and simple tax code the problem is that those with large
amounts of wealth are better off spending a portion of that wealth on
intentionally obscuring their assets and incomes than by simply paying their
fair tax.

From the article:

> They often have trusts, foundations, limited liability companies, complex
> partnerships and overseas operations, all woven together to lower their tax
> bills.

Which is to say that...even if you set out a flat tax rate of X% it is
possible to arrange situations where multiple trusts, companies, partnerships,
etc, are arranged in such a way that even though they are operated for the
benefit of an individual that individual has little to no real obligation via
their engagement, and the interactions of those independent entities behave in
such a way as to - on paper - present a reduced income then it becomes
exceptionally hard to determine who owes what without devoting massive amounts
of effort collecting all of these loosely related entities and analyzing flows
of money.

~~~
aetherson
I mean, foundations and trusts, especially, are artifacts of a complex tax
code.

LLCs maybe less so. Overseas operations much less so.

And look, the complexity of the tax code isn't (solely) a result of raw
dysfunction. We decided that we _didn 't want to_ treat all income the same as
all other income, and all organizations the same as all other organizations,
in ways that are pretty defensible.

But that's generally true of the insanely high-complexity legal systems of
modern countries: most individual decisions make sense, but the aggregate
result of them is bewildering, easily-parasitized complexity.

------
mywittyname
I feel like neutering the IRS is going to have long-term negative impacts on
the country. I hate taxes as much as anyone, but I do think the IRS has been a
force for good in our country. Not just by ensuring that wealthy people make
investment in our society without the expectation of _direct_ financial
return, but also by virtue of being a powerful enough to tackle corruption.

The anti-tax rich are totally fine with continuing to shovel government money
into their pockets, via contracts, grants, etc. Which suggests that a greater
share of the cost burden of enriching these people will fall to regular
Americans.

~~~
mrfredward
Yes, weak tax enforcement shifts the tax burden from dishonest people to
honest people. Unfortunately, giving funding to those scary tax collectors
doesn't make for much of a political slogan.

------
atonse
When I read this, yet again I think of all the wasted incredible brains and
talent that end up in ad-tech companies like facebook and google.

All this brain power could be used to help with this sort of injustice, in
what seems to be essentially a battle of brains (IRS lawyers vs rich people's
top lawyers).

But then the gov needs to find a way to competitively pay for this stuff.

~~~
rorykoehler
The best idea i’ve heard is to abolish taxes and print money instead.
Inflation becomes the tax and you just print enough to provide the services
that are critical (health, police, fire, Ubi etc). That way you wouldn’t have
to waste the brain power on pointless legal squabbles (antechamber on the
other hand...).

~~~
elcomet
It's a regressive tax, as it affects everyone at the same rate. Modern tax
systems are progressive, ie people get different tax rates depending on their
income.

~~~
ijpoijpoihpiuoh
"As it affects everyone at the same rate." That's a flat tax. A regressive tax
is one that affects the poor more.

However, you are right that it is probably regressive, since the rich normally
place more of their wealth percentage-wise in non-cash assets than poor people
do.

~~~
wavefunction
A flat tax is regressive in nature since the wealthy demand a greater share of
the services provided by civil society.

~~~
zulln
Do they really 'demand a greater share' in proportion with how much more they
contribute?

~~~
cannonedhamster
Police protect assets, fire services protect assets, schools are better in
wealthy districts, The IRS targets poor and middle class because it's easier.
Courts give better outcomes to the wealthy. Businesses are generally started
by those with money. Pretty sure that the wealthy use significantly more
resources because they have more to protect.

~~~
mastox
But where's "with how much more they contribute?" part of the answer? Such as
the jobs created?

------
yardie
I recently called the IRS and by the end of the call I felt really bad for
them. The agent that picks up immediately tells you there ID# even before
their name or any formal greetings. I know it's tax season and they are
harried. But speaking with him he just felt worn down, and it was only 10AM!
And having to use your ID# for every call dehumanizes you. It's the same way
we treat prisoners, only referring to them by their DoC number.

~~~
chrisseaton
How else should they let you note who you spoke to? Using their actual name?
They're not unique. You need some kind of reference number on each call.

I'd love it if each call I had to make to a company started with a call ID
number and then I got emailed a transcript and recording afterward.

I think some call centres give staff pseudonyms so they're unique.

~~~
ben_w
Name is good. You don’t need a customer-facing GUID, you can automatically
keep track of which customers were connected to which call centre person. You
could easily combine that with the automated transcription you’re suggesting,
which I also like. Heck, make it an MP3!

~~~
chrisseaton
> You don’t need a customer-facing GUID

They don't need it, but I do.

> you can automatically keep track of which customers were connected to which
> call centre person

But I want to keep track. I don't care how they keep track.

I want to be able to say 'on call XYZ we agreed this' rather than saying 'I
spoke to someone called John Smith on Tuesday please look it up in your log'.

~~~
ben_w
“Hi, I’m calling about the same thing as last week”

“<Caller ID says your perferred name, and you were talking with Mr ExampleName
about your contract> Hello Mr Seaton, how can I help you today with your
contract?”

~~~
chrisseaton
Have you never had a protracted problem that's taken multiple phone calls,
each with different people, to resolve?

~~~
ben_w
Of course. I’m suggesting what I think is a better solution than yours.

------
clarkevans
The Land Value Tax
([https://en.wikipedia.org/wiki/Land_value_tax](https://en.wikipedia.org/wiki/Land_value_tax))
should be considered: It's progressive. It's hard to conceal/evade. It muffles
speculation bubbles.

~~~
chongli
The problem with this is that a huge amount of wealth today is not in the form
of land, it's in the form of capital (physical, cash, and equities) and a lot
of that is located off-shore. Yes, the Apple UFO campus is extremely valuable
land but it's a very tiny fraction of Apple's overall wealth.

~~~
dredmorbius
Citation requested.

(I've looked for wealth distribution by asset class. It's remarkably hard to
find.)

~~~
myroon5
as of 2016: [https://www.claconnect.com/-/media/cla-image-
repository/gene...](https://www.claconnect.com/-/media/cla-image-
repository/general/illustrations_and_objects/the-investable-universe.jpg)

------
zdragnar
Wealth and income are two different things.

Think of income taxes as regulatory capture by those who already have money.
The higher the taxes, the greater wealth inequality becomes. Once you have a
lot of wealth, you can afford to stop and start new efforts at getting income,
while everyone else is stuck taking a salary (and if they're lucky, stock /
401ks). That flexibility lets them stay ahead of the tax laws that keep
everyone else down.

------
tomohawk
Classic hit piece from propublica, trotting out the classic villains. If only
the poor IRS was allowed to go after those neer do wells!

I've known wealthy people, but not plutocrats, who the IRS has gone after.
Auditing (harassing) them year after year. Referring them to be investigated
by DEA, BATF, etc. It's totally insane how unaccountable the IRS is.

Of course someone in the gun sites of the IRS is going to avail themselves of
the best legal and accounting talent they can get. If you have lots of money,
you are in their sites.

------
mbostleman
I wish a switch to a consumption tax would get more (or any) traction. It
seems like it would solve so many problems, be more efficient, and
considerably more liberal. Unfortunately the institution that is the IRS, the
government's addiction to its citizens' private information, and the financial
services / tax prep lobby are likely impassable obstacles.

~~~
atonse
This idea is appealing to me as well but unless it's based on your income
(hence yet another progressive tax), such a tax hurts the poor
disproportionately.

~~~
jbattle
This could get complex fast, but if the consumption tax was graduated
according to a subjective measure of how critical the need was ...

Food purchases get taxed at 1%

Car purchases get taxed at 2%

First home purchases get taxed at 3%

Second home purchases get taxed at 6%

Private airplane purchases get taxed at 99%

that sort of thing

~~~
nemo44x
I don’t like it. Who gets to decide what tax rate each thing gets? There are
just so many things.

Make it flat at 20% for any time money is traded for something. This would be
for toilet paper to a house to a political donation and include capital gains
profits. Everything is taxed at 20%.

Then eliminate income and corporate taxes. States can define other taxes like
local income tax, property tax etc.

Then every adult gets a check for 20% of the agreed upon poverty level in
January.

Now taxes are not tied to income, to only those that work or capitalize, etc.

~~~
nybble41
> Everything is taxed at 20%.

You'd need to exclude resale of used items, unless it's your intent to kill
the market for used goods and ensure that they end up straight in the trash.
With a 20% sales tax on used items you might as well buy new instead,
especially for durable goods which wouldn't trade at much of a discount.

Apart from that change, what you're describing is essentially the "Fair Tax",
except that they calculated that the rate would need to be more like 30% to
remain revenue-neutral with the current income tax scheme.

~~~
nkurz
_With a 20% sales tax on used items you might as well buy new instead_

I don't see why this follows. For example, most states currently charge sales
tax on the sales of used cars and there seems to be a thriving market for used
cars. Do you believe that raising this rate from 5-10% to 20% would
significantly impact the sales of used vehicles?

 _especially for durable goods which wouldn 't trade at much of a discount_

While I don't think it's a likely outcome, suppose that for some reason all
buyers balked at paying a 20% tax. I think it's likely that this would cause
sellers to reduce their asking price to clear the market. Why do you think
sellers would throw the item in the trash rather than reducing the price?

~~~
nybble41
> For example, most states currently charge sales tax on the sales of used
> cars and there seems to be a thriving market for used cars. Do you believe
> that raising this rate from 5-10% to 20% would significantly impact the
> sales of used vehicles?

First, it would be raised _by_ 20%, _to_ 25-30%. Adding a federal sales taxes
wouldn't negate the existing state taxes.

Second, vehicles are a special case in the tax code. When you trade in a used
vehicle you typically only pay the tax once, on the value of the new vehicle.
(Technically, one tax on the trade-in value and another on whatever extra you
paid for the new vehicle to make up the difference.) Under your scheme there
would be a 20% federal tax on the value of the old vehicle plus another 20%
federal tax on the value of the replacement. (Unless you don't intend to apply
the sales tax to barter... with the predictable consequence that all
significant transactions thereafter will avoid any actual exchange of
currency.)

More importantly, used cars tend to be _much_ cheaper than new ones. There's
some basis to that joke about losing half the value just driving the car off
the lot. Even a 25-30% tax wouldn't make up for that much of a difference in
price, though it _would_ make used vehicle trades more expensive and probably
put a damper on the market. Do you believe that imposing an extra cost of
anywhere from hundreds to thousands of dollars in taxes on any used vehicle
sale _wouldn 't_ significantly impact the sales of used vehicles? I think
people would be more likely to buy their vehicles new, when they can afford
it, and hold on to them longer. The ones that would be available used would
consequently tend to be older and in worse condition, on average.

> Why do you think sellers would throw the item in the trash rather than
> reducing the price?

How much do you think they can reduce the price before it isn't worth the
trouble? Finding a buyer is not necessarily an effortless process, and given
that buyers aren't likely to want to pay more (incl. tax) than they do now the
seller will have to lower their pre-tax price by at least 16% to make the
sale. I already see perfectly good items sitting out on the curb with a "free"
sign in less-than-ideal weather because they'd be too much trouble to sell;
reducing the incentive to advertise and locate someone who values the item
will only make that more prevalent.

Besides, do you really want individuals collecting and remitting sales tax on
behalf of the federal government? Sales of used items are much more likely to
be person-to-person. Taxes on the sales of new items tend to be collected by
registered businesses, which makes it a more manageable problem.

------
Nasrudith
I see the tax issue as a cybersecurity analogous issue - the complexity gives
room for exploitation. A refactor could help alleviate many of the issues but
that would be a very difficult task even without regulatory capture and
perverse incentives.

~~~
jacobush
To riff on that, the complexity is a feature. For some.

~~~
Bombthecat
Well, in IT it definitely is :)

------
jasonshen
One of the challenges we have with our current tax code is the fact that it's
based on income (salary, capital gains, etc). One idea is to use a value-added
tax (VAT) that allows all consumption to be taxed. This is a big part of
Andrew Yang's campaign to fund UBI.

[https://www.yang2020.com/policies/value-added-
tax/](https://www.yang2020.com/policies/value-added-tax/)

He also wants to increase the IRS's funding which would help go after those
super rich people and their lawyers.

~~~
dredmorbius
Or wealth / property taxes.

Or exim taxes on international money transfers.

Or taxes on bank balances, particularly offshore.

[https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_V/...](https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_V/Chapter_2)

------
lordnacho
If you've never had a tax scheme offered to you, this is how it goes. My
experience is in the UK but there's similar stuff everywhere, I'm sure.

Someone from an "aggressive accountant" will somehow find you. They will tell
you what kind of people they represent, and why you are one of them.

Then they will draw an immensely complicated block diagram, like the UML
diagram of a large enterprise application, except none of the blocks means
anything to you.

There's always some special rule they are using. One time it hinged on me, a
guy who can't play or sing a note, spending an hour or two each week
critiquing the lyrics of a well known rap artist. Another time it hinged on me
writing and publishing poetry. Yet another one was related to films. I've got
zero skill in anything artistic, so obviously this was not going to be legit.

It is what the guy presents it as, a tax dodge. The guy also says your winning
are dependent on running a legal gauntlet; Some schemes work, others don't and
you end up paying the tax bill, the accountants, and a penalty.

Luckily I wasn't tempted to participate in any of these schemes. You know why
you are participating in these schemes, and it's not a sincere desire to
improve rap music. And I did hear about a friend of a friend recently who
tried and lost, and is now in deep trouble.

That's just the tip of the iceberg as well. All sorts of other tax games are
played by people way wealthier than me, as well as corporate entities.

------
flyinglizard
1\. This is a fantastic piece of reporting.

2\. Reading through all of this, I hold no sympathy to the IRS given this
situation. The government policies described, from the requests of disclosure
to the taxation levied in this specific case appear downright abusive.

~~~
influx
I read it and came to the same conclusion. The whole crux of the case is that
there was unreported income from a loan that was forgiven. The banks did make
it complicated, but they did so to avoid driving the company (and themselves)
into bankruptcy, and look to still get paid back.

Collecting a billion dollars on a loan that really hasn’t been forgiven and
driving the company into bankruptcy seems insane. The IRS would have more of a
case if they looked at the situation at the term of the loan and found it
hadn’t been repaid.

~~~
ben7799
I agree with your take on it.

If they got their billions of taxes they'd have bankrupted this guy and put
Continental Tire and a bunch of other companies out of business.

There would be a ton of lost jobs and a lot of value in society destroyed.

All because they couldn't back out of a deal because of the law in the first
place.

Definitely a weird international thing going on here too with the IRS
potentially bankrupting a German company and the Germans being stuck with the
fallout.

------
treespace8
It used to be simple. Government taxed their citizens.

But now at a certain level of wealth you can turn yourself into an
international corporation. Who isn’t really a citizen of any one country.

No one is going to ban international business. So the ultra rich will probably
continue to get away with this. And the upper class (100k - 500k a year) will
bear the tax burden.

------
joelx
All tax returns should be public. This would vastly reduce cheating on taxes.

Our society has run into a fundamental problem - there are always a certain
number of people who will cheat on their taxes. According to research, these
people are disproportionately the ultrawealthy. The real problem comes up when
the government does not do proper audits and doesn't enforce penalties because
then good and honest people see the cheaters get away with it. This leads to a
quick erosion of morals and integrity in the whole system.

Making all tax returns public makes it very easy for anyone to spot the
cheaters. Even pathological liars and cheaters will have a strong disincentive
against cheating and will be quickly punished if they do.

~~~
nojvek
Making tax returns public also attracts a shit ton of spammers and conmen.

But I whole heartedly agree, if you want to solve any form of corruption or
“some are more equal than others”, public accountability and
immutable/verifiable record keeping is the best counter.

------
specialist
I wonder if there's enough public information to do third party (citizen)
audits?

Crowd fund some under employed accountants and geeks and sleuths to dig into
some of the big boys.

\--

Is there some kind of bounty program exposing tax cheats? Like that small law
group that's made millions whistleblowing big pharma.

------
z5h
Dear interested lawyers, keep half the money you recover.

Problem solved.

~~~
xtracto
That would be brutal, but really good.

------
adolph
See also Propublica on what regions are subjected to the most audits. Hint is
in the URL.

[https://projects.propublica.org/graphics/eitc-
audit](https://projects.propublica.org/graphics/eitc-audit)

------
mrnobody_67
If any other revenue generating entity was bringing in $4500/hr of labour,
it'd be rapidly scaled up and funded to capture the maximum possible upside...
crazy how that doesn't happen here.

------
linsomniac
The graphic on that article reminds me of something a multi-millionaire once
told me about his stock market high-frequency trading: It's like picking up
pennies in front of a steam roller.

------
HillaryBriss
I love the quotation "From the minute it went live, it was dead on arrival."

I mean, that's pretty dead.

------
jacobush
Oh, this adds another twist to why taxes are so complicated in the US. If the
IRS was not bogged down in the tax reports of commoners, they might have more
time for mischief, like pursuing Schaeffler and friends.

~~~
AlexTWithBeard
But are the "commoners" taxes really complicated? If you only have w2 income
it's just a simple 2-page 1040 form.

~~~
scott00
A form so simple it only needs 117 pages of instructions.

~~~
bzbarsky
I mean, it's got 4 pages of instructions for whether you should file it at
all, and if so where to send it. It's got a third of a page for what to put in
the "name and address" fields. It's got half a page for what to put in the
"SSN" field. A bunch of that deals with edge cases that are not relevant to
most people, who don't even read this part of the instructions and just write
down their name, address, and SSN.

8 pages of EIC credit table. 10 pages of tax table. Longish, but pretty
simple.

Now there are in fact things in there that are not simple. Filing status is
usually simple, unless you try to figure out "head of household", in which
case it's not. But in general, the 1040 is quite simple as tax forms go, and
the instructions are mostly long because they are written out with a lot of
detail and to be easy to follow, and have to cover various edge cases.

------
wav-part
Ultrawealthy Ought to Help

[https://www.youtube.com/watch?v=PGMQZEIXBMs](https://www.youtube.com/watch?v=PGMQZEIXBMs)

------
tmp09211
The pain of Trump's tax law in California can't be understated ...the cap on
SALT deductions means that you cannot deduct more than $10k in income +
property taxes anymore, which barely covers an average base salary for many
people. Double taxed on income we'll never see.

------
xiphias2
The tactics used for lowering taxes looks like a great target for WikiLeaks.
The more people use the same tactics, the less efficient it is for
billionaires.

~~~
AlexTWithBeard
How to lower your taxes using the same tactics as billionaires:

step 1. Hire a team of accountants and legal advisors

~~~
ryandrake
Is that really all it is, though? Hire wizards and they cast spells to make
your taxes lower? I think being able to lower taxes has more to do with your
billionaire status (there are more loopholes and deductions for wealthy
people) and less to do with hiring professional help.

Nearly 100% of my income is W2 labor, and I always do my own taxes. A long
time ago I thought I'd hire a CPA to do my taxes, to double check that I was
doing mine optimally. Total waste of money. He cost about $400 (I understand
that's a pretty good bargain these days), and found no additional deductions,
and was kind of a pain to deal with. For working class and middle class
people, there really aren't that many ways to get creative with your income to
reduce your tax bill.

~~~
AlexTWithBeard
It's not about some special status, it's purely about money: casting the magic
tax-lowering spell requires a lot of mana.

I'm sure your accountant could have set up a charity, put most of your assets
there, the charity would hire yourself as an independent contractor... But it
will cost more than it's worth.

------
jerkstate
This is what people who argue for the expansion of the welfare state don't
understand. The ultrawealthy will always find ways to protect themselves from
taxation (as they did back in the days when "tax rates" were "80 to 90
percent" as they love to tell you) and the brunt will be borne by people like
me, who are relatively comfortable in providing for my family but still worry
a lot about saving adequately for retirement and college payments down the
road (which if I am restricted further from doing properly, will simply
increase the burden on the welfare state).

~~~
matchbok
We do not have a welfare state. There are simple ways to get people to pay
their taxes, there simple isn't political will.

