How to Protect Your Income from Taxation?
- Thread starter adadadog
- Start date
Absolutely agree. The same follows for any other tax planning. Perhaps only retirement accounts and the like are straightforward enough.
It also helps to know what professional to ask for advice. There are a few stories on this forum from people who were unlucky to meet a tax adviser who was being extremely dense regarding customer's circumstances.
Not only that but there is also a tax break on foreign income for people born abroad. Further, limited companies solely owned by a person can qualify for taxation as a company under certain conditions; naturally, anyone who uses such a route pays first corporate tax and then personal taxes on any money withdrawn from a company.
Yikes! Are you joking about "computer monitor" tax?
Unfortunatly not. We're the number 1 top listed Tax country in the world. There are taxes on everything.
What are you guys complaining about anyways ? Just pay the lousy 35% and be done with it.
Yes, that's correct. They are planning to stop that.
In my daytrading I'm taxed on the highest level since that is my source of income and I'm too active on it.
In my daytrading I'm taxed on the highest level since that is my source of income and I'm too active on it.
To compare countries in terms of levels of economic freedom, including tax burden, I like this site
http://www.heritage.org/index/
The top 3 countries with the most economic freedom are:
1) Hong Kong
2) Singapore
3) Australia
The United States is number 9.
"U.S. tax rates are burdensome. The top income and corporate tax rates are 35 percent. Other taxes include an estate tax and excise taxes. Additional income, sales, and property taxes are assessed at the state and local levels. In the most recent year, overall tax revenue as a percentage of GDP was 26.9 percent."
http://www.heritage.org/index/
The top 3 countries with the most economic freedom are:
1) Hong Kong
2) Singapore
3) Australia
The United States is number 9.
"U.S. tax rates are burdensome. The top income and corporate tax rates are 35 percent. Other taxes include an estate tax and excise taxes. Additional income, sales, and property taxes are assessed at the state and local levels. In the most recent year, overall tax revenue as a percentage of GDP was 26.9 percent."
You are only looking at one side of the equation. Those US taxes and citizenship also come with benefits, and foreign citizenship/long-term residence comes with disadvantages. Depending on the individual and their circumstances, these may well outweigh any financial saving.
Personally I find that exiling yourself to another country is, on balance, not worth it for money alone, at least not at current tax differentials. If places like the USA and UK had top rates at 65-70%, like they used to, and closed the many loopholes (such as trading through a corporation, or running an offshore fund, putting cash into pension vehicles) then it would become worthwhile. At the moment, IMO it is not worth it as a long-run option (taking 1-2 years out for a bit of adventure and a bonus of some tax saving is reasonable). You need to have additional reasons, such as a significant preference for the culture and/or people you are going to live amongst, compared to your own country. For example if you are a hard-drinking atheist from Saudi Arabia, acquiring citizenship in a western country is probably a good idea. If you are a citizen of Somalia, it may well be worth getting foreign nationality if you can manage it. But giving up a 1st world citizenship is probably not a good idea. Most true tax havens are boring, limited places. Most interesting places have tax rates similar to, or not massively less than, countries like the USA. You are not comparing 35% with 0%, you are comparing 15-28% (LT capital gains/dividend rate, blended futures rate, taking advantage of various tax planning measures) with 15-20% (typical tax rate in low tax countries with actual civilisation and proper societies). Moving away from everyone you know, learning a new language, being in a foreign culture, is not worthwhile to say 5-10% on your tax. If you are paying 50-75% then yeah, it makes more sense. But the USA is not currently facing a really large tax burden, it's not Denmark.
My advice is count your blessings, stop assuming the grass is greener, and remember that the best way to boost your bottom line is not to change citizenship, but to improve your top line. Becoming a better trader/investor is a far more effective way to make more money than changing where you live.
that just bs. the effective tax rate for us corporations is something like 17%. half of us corporations pay no tax at all.
"According to the Government Accountability Office, in any given year, at least 60% of US corporations surveyed paid no federal income tax liability for 1998 to 2005 (the years studied). That statistic includes corporations of varied sizes.
If the trends in the survey are accurate, nearly one quarter of large US corporations donÂft pay any federal income tax at least half of the time. Large U.S. corporations are those with at least $250 million in assets or gross annual receipts of at least $50 million."
also this:
¡Revenue from the corporate income tax fell from between 5 and 6 percent of GDP in the early 1950s to 2.1 percent of GDP in 2008