tax advice 101 anyone?

This discussion of tax brackets is a reminder of how low (in historical terms) today's rates are. This is why I'm inclined to pull some $ from my IRAs now (though carefully watching out for the IRMAA monster) before I'm forced to start RMDs in a few years anyway (I'm 68). I figure rates are unlikely to go lower, and might eventually move back toward more historically typical levels, though who knows.
 
When you’re a tax payer they have formulas and forms to make sure they extract every penny from you down to the gnats ass, but when the government spends it they just blast it out. Gender studies in Pakistan, a few hundred billion for some PPP loans that probably won’t get paid back, on and on. Am I wrong to be so cynical?
 
midwestpa24 said:
And the game still runs today. The more you make, the higher your tax bracket, but also the more opportunities you have to find deductions and credits. That's why you see mega millionaires only paying an average of 18%. People say they are cheating, but I see it as playing the game and winning. Unless you are a politician, you didn't write the tax code.
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Yes. There is an entire industry around that and around maintaining an entire industry around taxation. Income taxes, estate taxes, different tax classifications for trusts with pass through income, and a hundred other special circumstances. The IRS, Tax Accountants, Tax lawyers, Tax Lobbyists, Industry Lobbyists, etc. only exist because the tax code is so complicated. The complications have unintended consequences and leave loopholes for people with enough money, motivation, and time to find them. Simplify the tax code and most of that non-value added drain on society goes away.

Here's how a billionaire avoids taxes: You're Jeff Bezos and own a bunch of Amazon's stock. But you've always owned it - you started the company. So you have paper wealth based on stock value, not wealth based on what you've taken home in a paycheck. Owning a $50B in stock makes you wealthy, but wealth and income are different. You won't get taxed until you sell the stock.

In the meantime, you borrow money against your stock portfolio. If you own $50B in Amazon stock, the bank is happy to loan you a billion or two against it to support your lifestyle. You pay interest on that loan, and that reduces whatever taxable income you get from your position as CEO. You don't have much income nor do you pay much income tax. Of course, you'll die one day and your estate will have to pay estate taxes on most of the $50B you have in stocks. That's a huge tax burden, but it is years down the road.
 
Of course there was a war on in 1944, an expensive one.

If we want to go back to the 50s tax tables then we need to scale the government back to the size it was in the 50s.

And accept high unemployment rates and no epa.
 
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JimNtexas said:
Of course there was a war on in 1944, an expensive one.

If we want to go back to the 50s tax tables then we need to scale the government back to the size it was in the 50s.

And accept high unemployment rates and no epa.
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fortunately, that's not the only possible way to do that.
 
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