Is 2010 the Year of Avoiding Taxes?

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A VAT is a cascading tax...that is the wrong way to go. Illiminate the income tax, shut down the IRS, which will save billions, have a flat consumer tax that is put upon goods bought and sold. This way, we keep our paychecks and we have the largest part of the tax burden off the middle class, while giving consumers more buying power, thus elevating the economy. This is a win win situation.
http://www.fairtax.org
TAX WALL STREET! Investment banks and consumer banking should be separate. Any high risk banking should have a hefty tax put upon them. They should not get a free ride at the sake of the people. No more bailouts for banks or businesses that can't afford to do business. Where is our bailout? If anyone of us were in the position of pondscum Blankfein, we would be convicted and thrown in jail quicker than an officer of the law could read us our rights.

M Hess of FL 1:05PM June 20, 2010

The income tax is necessarily complex and impossibly to properly enforce.
Replace the income tax with a VAT + standard rebate.

Bob of CA 4:15AM March 26, 2010

"For the very sophisticated people, there will always be loopholes," he says, such as deducting travel and entertainment expenses. "None of my clients pay more in taxes than a schoolteacher."
So why is everyone crying about taxes if the wealthy can already avoid it and all the rest of the people don't make that much money? Every time I see an article about excessive taxes, it is almost always is written using the prescribed rate rather than the effective rate. Two sources I found indicate that the average wealthy american making more than $250k pays an effective tax rate of 16% thanks to all the deductions and loopholes. Sure would be nice as a family making less than $100k per year could pay 16%. The poor get all their income taxes back, the wealthy have their accountants, deductions and loopholes and those of us in the middle get to pay for everything.

tom of ND 5:45PM March 15, 2010

GREAT article

lance wallach of NY 10:17AM March 11, 2010

Actually, the previous 10 year rule on related to U.S. source and U.S. situs assets (and was easily structured around). It was replaced in 2008 by a mark to market deemed disposition.
Having seen the biggest rush of expatriations in the last 1 1/2 in the close to 20 years I have been dealing with this I can make a few observations:
-The Golden Geese have the choice of either paying the capital gains now or when they sell or when they die;
-When you calculate the future cost of money, its better to do this now. Especially as many things which are currently treated as capital gains may very well in the future be treated as income. This instantly doubles the tax rate and often pushes it to current year realization. Ouch!
-Given market drops and loss carry-forwards, this has been an excellent period to realize capital gains.
-If one does have a capital gains tax to pay and does not have the liquidity to pay the deemed disposition, then they can either sell or pledge assets as security. Given the high rates of interest that the government charges on this security, most people are borrowing on the assets and paying the capital gains tax.
-Most Golden Geese assume (with great reason) that the burden will fall even heavier on them in the future, so they are getting out while the getting is good.
Sobering isn’t it.
http://flightofthegoldengeese.blogspot.com/

David S. Lesperance 10:33AM March 09, 2010

Excellent points by David S Lesperance. I agree, the very best thing that the wealthy can do is to leave the U.S.
The U.S. government requires that even upon expatriation and relinquishing U.S. citizenship, that some HNI file income tax returns for up to 10 years. The U.S. government thinks it owns its citizens and has an almost infinite claim on the money they earn. It's gangster government.
I think Republicans and Democrats are committed to the politics of envy, covetousness and class warfare. They prefer to run the country into the ground before they deign to make it more attractive for HNI.

Jason 9:27PM March 08, 2010

Another obvious alternative for HNW people is to properly and completely leave the U.S. tax system!
In 2007 (according to IRS information) the top 1% of US taxpayers contributed just over 40% of the total amount of personal tax revenue (aka “The Golden Geese”). The Golden Geese are not fixed to a specific location to make and grow their wealth; they can afford the best advice; are worldly enough to realize that they can reproduce their current business and personal lifestyle in many locations; and tend to be more likely to think “out of the box”.
The question that policy makers should be asking themselves is, “What will happen to U.S. federal, state and municipal tax revenue if the Golden Geese actually leave the U.S. entirely?” If even a small number leave, it will have a huge asymetric impact.
The government has two possible choices.
The first choice is to try to throw up barriers to departure. This will have one of two results. Either Golden Geese will consider departing too expensive OR they will rush to the exits before the price gets even higher. Considering current tax proposals, staying in the longterm is certainly more expensive than leaving now.
The second choice is to make the system more attractive to pursuade them to stay. Let’s just say that there is not much political mileage in the U.S. these days in doing anything to help the Golden Geese.
The natural result is that advisors like me are seeing a huge spike in the number of Golden Geese who are heading for the exits or at least packing their parachutes. Like many things, the American public will only appreciate them when they are gone.
http://flightofthegoldengeese.blogspot.com/

David S. Lesperance 6:14PM March 08, 2010