How the Super Rich Avoid Paying Taxes

Written by on January 9, 2013 in Money - No comments | Print this page

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New found millionaires quickly learn how to lower their income tax rates. For someone with the means to do so, heaving millions of dollar through tax law loopholes is a rather effortless process. In fact, experts suggest that, as a whole, America’s wealthiest individuals should be paying between $70 and $100 billion more in annual income tax.

American taxpayers who make $1 million or less pay an average tax rate of 24 percent, but those making $10 million pay an average rate of 19 percent. This disparity only highlights how easy it is for the rich to reduce their taxable income.

One popular method involves making a charitable donation. An individual can purchase a sculpture for $1,000 one year, have it appraised for $10,000 some years later. He can then donate it to an organization, effectively earning a $10,000 reduction in taxable income.

Yacht owners, too, can claim their vacation vessels as a second home, as long as they spend two weeks of the year on board.

Source: TopAccountingDegrees.org

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