Reply #82: Then you aren't investing your money "properly". [View All]

[Xithras]

There are lawyers and accountants who's sole jobs are to set up trusts and investments in a manner that will create deductions or exemptions for the income earner. You have to be making a LOT of money before the tax savings exceeds the expense of hiring those lawyers and accountants, but once you've crossed that threshold, they can be very effective at reducing or eliminating your annual taxes.

A person making $2 million a year probably couldn't get down to 3%, but with a good tax attorney and some yearlong planning, they could easily get the effective rate down to 10%-15%. A person making $100 million a year, with a small army of accountants and advisors on staff, CAN create enough exemptions and deductions to bring that number down into the single digits.

The wealthier you are, the more power you have to game the system.