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@horshack.sixpack top 1% pays 40% of income tax revenue received by the federal government. MUH FAIR SHARE!!!
I'm unsure what you are yelling about. Rich folks typically find ways to avoid having much "income". Of course they pay on their reported income. Are you suggesting that there aren't loopholes?
Copilot seems to think there are ways...honestly can't believe we are arguing about whether rich people avoid taxes through various strategies...
Here are some of the top examples of how ultra-wealthy individuals legally reduce their tax burdens using various tax shelters and strategies:
1. Elon Musk, Jeff Bezos, and Warren Buffett – The “Buy, Borrow, Die” Strategy
These billionaires avoid selling their stock holdings, which would trigger capital gains taxes. Instead, they borrow against their assets to fund their lifestyles. Loans aren’t considered taxable income, so they can access cash without paying taxes. Upon death, heirs inherit the assets with a stepped-up basis, erasing capital gains
[1] [2].
2. Peter Thiel – $5 Billion Roth IRA
Thiel placed undervalued shares of PayPal into a Roth IRA in 1999. As the shares appreciated, the gains remained tax-free. Roth IRAs are designed for middle-class retirement savings, but Thiel’s maneuver allowed him to shield billions from taxes
[1].
3. Steve Ballmer – Sports Team Ownership
Ballmer, owner of the LA Clippers, benefits from tax deductions associated with owning a sports franchise. The IRS allows depreciation of player contracts and other assets, even as the team’s value increases. This lets owners report losses and reduce taxable income
[1].
4. Real Estate Moguls – Depreciation and Cost Segregation
Wealthy individuals like Donald Trump and Stephen Ross use real estate depreciation to offset income. Cost segregation studies allow accelerated depreciation of building components (e.g., HVAC, lighting), creating large upfront deductions
[3] [2].
5. Charitable Foundations – Tax-Efficient Giving
Billionaires often create private foundations. They get immediate tax deductions (up to 30% of AGI) and avoid capital gains taxes by donating appreciated stock. Foundations only need to distribute 5% annually, allowing the rest to grow tax-free
[3] [2].
6. Family Offices – Business Deductions
Families with $100M+ in assets can form family offices to manage wealth. These structures allow deductions for investment management, estate planning, and even salaries paid to family members, converting personal expenses into business write-offs
[3].
7. Changing Residency – Puerto Rico Tax Benefits
Some wealthy individuals, like Jake and Logan Paul, moved to Puerto Rico to benefit from its unique tax laws. Bona fide residents can avoid U.S. federal income tax on capital gains and pay minimal taxes on dividends and interest
[3].
8. Oil & Gas Investments – Massive Deductions
Investing in oil and gas allows billionaires to deduct intangible drilling costs and depletion. These deductions can offset income entirely, making the sector a powerful tax shelter
[2].
References
[1]
Ten Ways Billionaires Avoid Taxes on an Epic Scale - ProPublica
[2]
5 Ways Billionaires Avoid Taxes: Strategies and Examples
[3]
How the rich avoid taxes using loopholes available only to them