Quincy Prempeh
According to a post by (usatoday), Every year, almost 200 million dollars in revenue from taxes is lost.
Wealthy people are able to afford tax attorneys, estate planners and accountants; these are very helpful services to have when managing wealth.
Some tax benefits require plenty of money in order to be accessed. The Internal Revenue Service states that the amount spent on business expenses can be written off when filing taxes and this is how some wealthy individuals avoid paying taxes.
“Wealthy people avoiding taxes is 100% legal, so there is not much that can be done. Although it is legal, it is not morally right for people who are already rich to avoid paying taxes while the poor are taxed heavily,” said Michael Colby, an art student at Delaware State University.
How Do Wealthy People Avoid Paying taxes?
Charitable donations, Property taxes, Foundations,Gifting, Trusts, and Life insurance.
Wealthy people avoid taxes by increasing the value of their assets, such as stock and real estate. U.S. regulations do not classify those gains as taxable income until the assets are sold.
According to a post by (nytimes) “the Biden administration pushes lawmakers to embrace its ambitious proposal to beef up the Internal Revenue Service to narrow the “tax gap,” which it estimates amounts to $7 trillion in unpaid taxes over a decade.” Owning a business is one way many people can reduce the amount of taxes they pay. Necessary business expenses can be written off. Example, if one owns a shop, the cost of advertising and delivery of goods can be deducted on your taxes.
If you’re a freelancer, you are able to deduct costs related to your business site. These are some methods wealthy business owners use to reduce their tax burden.
“Establishing a small business will allow you to legally avoid paying thousands of dollars in taxes on your full-time work income and the income of your spouse, due to the fact that businesses can deduct the costs of housing, utilities, transportation, travel, and computer equipment from their taxes. For this reason I started my real estate business,” said Professor Marquis at Delaware State University.
Poorer people and some rich people want the top 1% to pay way more taxes than they do. Although the super rich avoiding taxes on a large scale is legal, efforts are being made by the current President, States, and Congress to make wealthy individuals pay more taxes. Since the law to tax wealthy people has not been passed, people can take advantage by opening a business, to pay less taxes.