Avoiding Income Tax | How do Billionaires including Elon Musk & Jeff Bezos Minimize Taxes?

Описание: This video discusses how billionaires minimize taxes. The US has long had two tax systems: one for people who work for a living, and another for the wealthy. In this video, I am going to cover three common strategies used by the ultra wealthy to minimize their tax exposure.


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✅ REFRENCES ✅

📚 Effective income tax rate in the US
💙 https://thenextrecession.wordpress.co...

📚 The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax
💙 https://www.propublica.org/article/th...

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#wealthinequality #incomeinequality #economicjustice #tax #irs

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✅ About this video ✅

In this video, I am going to cover three common strategies used by the ultra wealthy to minimize their tax exposure.

Strategy #1: Incorporating

One way to save on taxes is creating a structure — such as a limited liability company, or LLC — to manage multiple investments. A corporation or LLC which elects to be taxed as a Corporation can be a tax shelter because the tax on its income is limited to 21%. This rate is lower than the top three individual income tax rates, ranging from 32% to 37%, which would otherwise apply to LLC owners at various income levels.

Another important benefit of incorporating is the tax code provisions that govern deductions and yield huge benefits. The more tax deductions a business can legitimately take, the lower its taxable profit will be. LLCs can deduct expenses such as purchasing cars, expenses of going into business, books/legal/professional fees, insurance, travel, interest and equipment.


Strategy #2: Avoiding capital gain tax

The capital gains tax is imposed on the profit from an investment that is incurred when the investment is sold. When stock shares or any other taxable assets are sold, the capital gains, or profits, are referred to as having been "realized." The tax doesn't apply to unsold investments or "unrealized capital gains," so stock shares will not incur taxes until they are sold.

This means that simple “buy and hold” investors need to pay no tax. This is actually proven to be the winning strategy both in the stock market and in real estate. Since most wealthy individuals have longer investing horizons, they let the value of investments grow without selling their holdings on a regular basis.

Strategy #3: Borrowing Money

One of the key strategies employed by the ultra wealthy to keep their tax bills low is borrowing money. Borrowing money allows the ultrawealthy to earn minuscule salaries, avoiding the 37% federal tax on top incomes, as well as avoid selling stock to free up cash, bypassing the 20% top capital gains tax rate. Since loans aren't considered taxable income, the wealthy need only pay back the principal and interest, rather than the higher taxes that would accompany multimillion-dollar incomes and investments.

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✅ About this channel ✅

Hi everyone! My name is Hamed Dadgour and I am excited to see that you are interested in my content.

Financial Intelligence seeks to deliver best in class educational material in subjects related to personal finance, retirement, investing and financial freedom. Our main goal is to create engaging videos to communicate somehow complex financial matters in a simple to understand manner.

We advocate for long term investing strategies. Short-term trading strategies and get-rich-quick-schemes are dangerous trends that are taking the financial world by storm. Our goal to provide sound and level-headed recommendations.

This channel is particularly targeted towards individuals seeking a breadth of knowledge across a variety of financial disciplines. The range of topics I plan to discuss on this channel are value investing, financial freedom, mutual funds, index investing, monetary policies, inflation and other related economic topics.

Welcome to the channel and please subscribe!

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✅ Timestamps ✅

0:30 Intro
1:37 Strategy #1: Incorporating
3:29 Strategy #2: Avoiding capital gain tax
5:02 Strategy #3: Borrowing money