A popular subject of interest to wealthy investors is ways to reduce taxes without renouncing American citizenship. The short answer is that this would be an extreme measure that is not necessary. Taxes on corporate profits and business income are at an historic low. Savvy business people have many options available to lower their obligation to the government.
It could be argued that when one person lowers the amount they owe, another person has to pay more to make up the difference. This is really not true. The federal government does not operate that way. In fact, most of the money the federal government spends is borrowed money. Tax money actually only makes up a fraction of federal spending. Therefore, it really does not matter if people minimize their tax bill because the government just borrows what it needs anyway.
Many people complain that the IRS code is too complex. Many politicians propose a flat tax. With a flat tax, everybody pays the same rate on all levels of income. The claim is that a system like this is more fair. Without all the special provisions, the government could actually raise more revenue. Those who are sophisticated with their financial affairs like the current IRS code. They can afford to hire lawyers and accountants who can take advantage of a complicated system.
The serious loopholes and provisions in the IRS code apply to business income. People who earn wages or a salary can not take advantage of these provisions. Starting and owning your own business is the only method to benefit from the dark hole that is the IRS code. There are a few items that ordinary working people can use, but it pales in comparison to the way a business can manipulate the complicated laws.
It is reasonable to try to hold down the amount of money you must give to the IRS, but it is not healthy to become obsessive. A person should consider themselves fortunate that they live in a country that provides the opportunity to be prosperous. A selfish obsession with tax avoidance is self-defeating. Those who have benefited from living in a country that offers everyone equal opportunities ought to feel a loyalty to their nation.
Nobody likes having to give their hard earned money to the government, but this is the price of citizenship. Without this revenue, citizens would not enjoy the high quality of life that they have now. It could be argued that the patriotic thing to do is to pay the IRS what you owe. There is nothing wrong with taking advantage of legitimate deductions and credits.
The reason why the IRS revenue code is filled with loopholes, special provision and breaks is to provide an incentive for people and business to behave in certain ways that are a benefit to society. At least, that is the rational behind them. Many of them are simply special interests attempting to have things setup in ways that benefits their industry. Without these complexities, many businesses would be paying more to the government.
While it may be possible to reduce taxes without renouncing American citizenship, the important thing is sound fiscal and monetary policy which helps grow the economy. A society that values economic justice and democracy will be the society that succeeds.
It could be argued that when one person lowers the amount they owe, another person has to pay more to make up the difference. This is really not true. The federal government does not operate that way. In fact, most of the money the federal government spends is borrowed money. Tax money actually only makes up a fraction of federal spending. Therefore, it really does not matter if people minimize their tax bill because the government just borrows what it needs anyway.
Many people complain that the IRS code is too complex. Many politicians propose a flat tax. With a flat tax, everybody pays the same rate on all levels of income. The claim is that a system like this is more fair. Without all the special provisions, the government could actually raise more revenue. Those who are sophisticated with their financial affairs like the current IRS code. They can afford to hire lawyers and accountants who can take advantage of a complicated system.
The serious loopholes and provisions in the IRS code apply to business income. People who earn wages or a salary can not take advantage of these provisions. Starting and owning your own business is the only method to benefit from the dark hole that is the IRS code. There are a few items that ordinary working people can use, but it pales in comparison to the way a business can manipulate the complicated laws.
It is reasonable to try to hold down the amount of money you must give to the IRS, but it is not healthy to become obsessive. A person should consider themselves fortunate that they live in a country that provides the opportunity to be prosperous. A selfish obsession with tax avoidance is self-defeating. Those who have benefited from living in a country that offers everyone equal opportunities ought to feel a loyalty to their nation.
Nobody likes having to give their hard earned money to the government, but this is the price of citizenship. Without this revenue, citizens would not enjoy the high quality of life that they have now. It could be argued that the patriotic thing to do is to pay the IRS what you owe. There is nothing wrong with taking advantage of legitimate deductions and credits.
The reason why the IRS revenue code is filled with loopholes, special provision and breaks is to provide an incentive for people and business to behave in certain ways that are a benefit to society. At least, that is the rational behind them. Many of them are simply special interests attempting to have things setup in ways that benefits their industry. Without these complexities, many businesses would be paying more to the government.
While it may be possible to reduce taxes without renouncing American citizenship, the important thing is sound fiscal and monetary policy which helps grow the economy. A society that values economic justice and democracy will be the society that succeeds.
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