So how exactly do the richest people on Earth avoid paying taxes?
The secret lies in the fact that US tax law focuses on taxing income, however, the majority of their wealth is tied up in company stocks or other investments that have real value but not taxable year to year. While much of their wealth is tied up in securities, their companies are the ones that pay taxes and the current corporate tax rate of 21% is far lower than the top rate of 37%. Bottom line, even with their wealthy lifestyle, their loans are taken against assets probably pay less to the bank in interest than they would to the government in income tax. These are just some of the legal tax avoidance strategies they use to pay next to nothing in taxes! Proactive tax planning is powerful!
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