How do rich people legally avoid paying taxes, and is it tax evasion?

[Anonymous]

I heard some rich people avoid paying taxes like tax evasion

[FreyaRed]

Tax paradises prosper like never before.
You have a million. You transfer it to Dutch Foundation (there are dozens of thousands of them). You officially made a donation which is tax free. Of course it's still your money, this foundation buys over some third world account some over expensive stuff (water pumps for Africa or medication for Bangladesh, no one will ever control that)
You lose 3-10% (it still less then taxes) 900-950k land on your private bank account in Switzerland as payment for that stuff. This money is outside any financial control in your country because Swiss banks don't sell any information to other countries (mostly). The Mountain Jew Bank in Swiss can't give you that money directly but you get a low interest rate credit by them. (because it's your money). Now you have officially your money washed as credit that you have to pay back to yourself. Debt brings in most countries tax benefits. Isn't that wonderful?

[jazzy34]

They don't "get away" with it. Tax evasion is illegal. Please be advised that many rich people don't care about what's legal or not legal. They feel that the law doesn't apply to them.

[slatyb]

One way is they borrow money against their stock holdings. For example, someone with $100 million in stock may be able to borrow up to $60 million using the stock as collateral. Now suppose they stock appreciates 5% per year, so in two years the stock is now worth $110 million. They can now borrow $66 million, so they can have $6 million more in cash than they had two years ago, and spend it, but they don't owe any tax on the $10 million in unrealized capital gains. They won't pay tax until they sell the stock.

[Maybe_Maybe_not]

If it is legal, then it is tax avoidance, if not, it is tax evasion.

The richer you are the more you can pay for advanced financial and legal advice. Advice here is about finding ways to spot and target breaches in your local tax laws or to find ways to get your money transferred to another jurisdiction, one that taxes you less.

[strateguy632]

by giving money to CHARITY. rich people give millions to charity so they are ALLOWED to pay less taxes. meaning 25%. that is a much bigger percentage and amount than my 200$ i pay in taxes after 'deductible'. if they do evasion they get punished.

[glennos89]

They are often soeverin people which means that they claimed back their independency instead of being owned by the government on paper. Souverin people can avoid having to pay taxes by making this deal with the tax income agency. They cannot be punished by law because souverin people are equal to the law while we are below the law

[exitseven]

They hire accountants and tax attorneys. If you have a lot of money you can really save a lot by using certain long term tax strategies. It is all legal too.

[Anonymous]

If its legal its not a crime. If your neighbour could legally take your property they would.

[Opinion Owner]

The employ an accountant to help them avoid tax.
For instance my husband was advised by his accountant to buy a new truck to avoid paying £50,000 in income tax.
Billionaires own nothing but set up an offshore holding account that owns their homes, cars etc and pays for their lifestyle as buisness expenses.

[jahaims]

They take low interest loans against their networth. Like stocks etc. Which are unrealized gains.

[NathanDavis]

by donating to politicians...

[Anonymous]

Why do you keep asking about taxes?

[Asker]

I am bored.

[Jen_oic]

Donations to charities are tax exempt

[In_Trance]

You've asked this before