Virtually every individual income tax shelter is devoted to converting fully taxed income into capital gains.
There's a tax cost, though: If title is transferred, the leasing firm no longer has depreciation with which to shelter income from tax.
Right now, you can deduct 30% of a charitable gift from your income to shelter you from income tax.
It is currently estimated there are 30, 000 users of what are known as employment intermediary schemes and partnership loss schemes - where partnerships that make a loss can shelter their other income from tax.
BBC: Tax avoidance schemes 'costs UK billions in lost revenue'
The Senate inquisitors aren't accusing the tech companies of doing anything illegal but of cleverly exploiting loopholes in U.S. tax laws that allow them to shelter income overseas.
No matter how much you wiped out your income with exotic tax perks like intangible drilling costs and other tax-shelter sounding items, you paid a smaller alternative tax rate on virtually everything with no deductions.
Join the ministry and shelter hundreds of thousands of dollars in income from any income tax, perfectly legal, and enjoy sun and fun while doing it.
Most of these rationales for low taxes on people like Mitt Romney are wrong or overstated, and they miss a key point: taxing capital gains at much lower rates than other income creates a ginormous loophole that leads to a tremendous amount of inefficient tax shelter activity.
This starker division of relative tax burdens can be explained by the inability of upper-income groups to shelter income.
But anyone investing in such bonds should try to do so in a tax shelter like an IRA or 401(k), as bond coupons are taxable as ordinary income.
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