How The Rich Avoid Paying Taxes

The more money you make, the more you have to pay in taxes, right? Not always. The ultra-wealthy typically take advantage of rules in the tax code which enable them to lower their effective tax rate. Warren Buffet has often pointed out that he pays less taxes than his secretary and Amazon famously paid zero taxes in 2018. So how exactly are the country’s biggest earners using the tax code to avoid paying taxes?

About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.

Connect with CNBC News Online

#CNBC

How The Rich Avoid Paying Taxes

[PremSteve-ygde]

Having lived in both America and Canada, I've found that I pay roughly the same amount in taxes in both countries. However, in Canada, I receive significantly more benefits and services for my tax dollars. Many Americans harbor a strong disdain for their government and are reluctant to part with their money because they have rarely experienced effective governance.

[Hannahbenowitz]

The cheque i cut the government on my propertirs and kinvestments are seriously eating into my project bufgets. It would hurt less if I received value for my taxes but healthcare still isn't cheap, my children's college tuition costs a small fortune, and my husband and I still have retirement to plan for. Right now the only solutioniwe see is to scale up my profits and with our limited knowledge, we are at a loss on how to do that

[EyeTech]

Me: gets paycheck
IRS: roses are red violets are blue half that check doesn’t belong to you

[lambdamax]

Tax avoidance: legal. Tax evasion: illegal

[AlanJWatkins]

I used to flip houses, but taxes were ridiculously high. Now I rent them out and my taxes are ridiculously low.

[Luke-hnfv]

step 1: hire an accountant
step 2: listen to the accountant
step 3: repeat step 1

[LinxuSx]

The two best things I did to significantly reduce my tax rate was:
1. Buy a house and rent out room - allows you to take a lot of deductions not to mention extra tax free income
2. Start a side business and push expenses/deductions to that side business.

I am not rich nor wealthy. Anyone with a decent income can do at least one of these if not both.

[madbug]

One of my friends gets around paying taxes by buying tax free municipal bonds. However, the bonds cost $10, 000 a piece but the interest from them is tax free. The thing is the more money you make, the more opportunities open up to shelter your income from paying taxes.

[jackcurrence]

This is one of those, "Don't hate the player, hate the game" kind of deals. If a rich person (or company) complies with the law in paying no income taxes, the problem isn't with that person (or company); the problem is the law.

[TedfordChan]

These are the thing that needs to be taught in school

[howardharris]

I don't know who, but someone actually needs to hear this, you've got to stop saving all your money. Venture into investing some, if you really want financial stability

[un]

If you get mad at the Rich for doing this, you are missing the lesson.

[SERGIO-cruy]

"If you wanna pay more taxes you can write a check to the IRS.."
Yeah I can see that happening quite often.... 🤔

[hiranikumar]

The best way to find growth stocks, key features to keep in mind is as follows:
1. Ensure gross margins are greater than 50%
2. Ensure P/E ratio is less than 100
3. Buy companies that are PROFITABLE, very important irrespective of sector.
4. Debt to equity ratio is less than 30%
5. Current ratio is above 1 6. and a Float under 100 million One stock that fits the bill is FLGT (Fulgent)

[sammyg.]

The people who get up very early to go to work and get home late in the evening are the ones getting screwed on taxes. The tax system in this country is unbelievable.

[MetaGPT]

For a moment I read the title as how do rich avoid Texas.

[fifafan]

You can easily lower your taxable income by just saving for retirement

[vladyslavdiumin]

2:45 and 6:28 there is a sound problem when the lady starts talking and expaikibg things. In my JBL headset I can hear the sound only the right side while the left side just playing the background music. That's what I noticed. Thanks for the video!

[boblamerine]

Most people complain and complain about how the system doesn't treat them fairly and demand the wealthy pay their "fair" share of taxes. Those same people are the ones who completely steer clear of any tax planning and are the ones who sit on their couches, watch TV all day and run across a turbo tax ad in which turbo tax offers services to completely take "care" of their taxes. Your average person sitting there watching this advertisement doesn't even give it a second thought and spends extra money on a tax professional and continues to sit down and watch TV or party on the weekends instead of learning the ins and outs of tax planning that include numerous tax credits and deductions they could otherwise use to their advantage without the help of a professional, saving thousands of dollars, and potentially doing a better job than those Turbo tax professionals in reducing their tax liability to its fullest extent. Get your priorities straight and quit complaining about something that is 100% in your control. Choices and priorities are what separate the rich from the average person, not the IRS or capitalism/"system".

[DrBeauHightower]

All this does is explain how people avoid double taxation. - signed someone who owns multiple businesses