How to Protect Your Income from Taxation?

Quote from 1prometheus:

So long as we do not have a wealth tax, one of the best ways to reduce taxation is to reduce realized income. This is not relevant to the wage earner, however for many here who i assume are investors it is perhaps the best method.
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I agree. The goal is convert income from earned income to passive income or to long term capital gains.

Buying rental property helps.
 
Quote from Free Thinker:

the law is nothing more than a withholding tax for hi net worth people. the government wants you to mark to market if you leave.

why should someone be allowed to spend their whole life in the us as lets say a real estate tycoon and build a billion dollar estate of realestate holdings tax free and then when he is ready to sell be allowed to leave the country,then sell,and escape all taxes?
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Because they already paid taxes on it as it was earned. Just like the estate tax. Double taxation. Govt greed pure and simple.
 
Quote from Free Thinker:

do you understand what effective tax rate is? ask someone to explain it to you.
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I grasp the deep meaning. Where did you get your research? NPR.org?

I am glad corps have found a way to pay less taxes, it keeps them and their jobs here.

Otherwise many more on welfare which is the liberal dream. Welfare and poverty for all.
 
Quote from pismo10:

Because they already paid taxes on it as it was earned. Just like the estate tax. Double taxation. Govt greed pure and simple.
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educate yourself. the withholding tax is designed to catch untaxed capital gains from fleeing the country. it is not double taxation.
 
Quote from lionfish42:

Sure - to each their own. However, to call Monaco boring, well - it might not be to one's taste, but I would certainly not call it boring.
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Any place with a 30k population gets boring after a while. I'm sure it can be fun for a few weeks, but living there would be dull IMO.
 
Quote from Marsupilami:

If your yearly income is in the seven figure range, it doesn't really matter whether a Wiener Schnitzel costs 100 CHF or whether property is expensive. It's all about percentages, i.e. taxes, then.

Still, I wouldn't want to waste my time living in Switzerland or Monacco....boring as hell.
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First point is not true, because cost of living affects normal people. If somewhere is pricey, then only the rich, and those who live off them, will be able to live there. That's why, for example, Belgravia is the most boring part of London. Most people are not rich, and being surrounded only by rich people and their de facto servants is boring, compared to being in a more varied social milieu. If a glorified hot dog costs 100 CHF then a starving artist or curvaceous 19 year old burlesque dancer probably can't afford to live there.

I agree about Switzerland and Monaco - do you have any recommendations for interesting places to live?
 
Quote from brutusmaximus:

..........Still, I wouldn't want to waste my time living in Switzerland or Monacco....boring as hell..........
true but you don`t get it. You do not actually have to live in that country.To have a tax status is one thing to live and move around another. We traders need laptops and connectivity. I can get that anywhere and I am loving it especially with saving 6 figures every year........it is all about percentages.
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Living on the move is not comparable to living in one place. Changing accommodation repeatedly is a serious hassle. Many activities can only be done properly if you put down roots of some kind. Owned property is more enjoyable than rented property, but is a major hassle to manage from long distance. Relationships don't work over long distance, casual pickups are harder when there's a language barrier. Contacts take time to make and tend to be in one area - if you move away just after building up a network, it loses a lot of its effectiveness. Rebuilding a social life in a country full of strangers takes time and effort. Different cultures need adjusting to.

There's also the problem that only a small number of places are the best places to live in. If you are moving to new places all the time, by definition you are not living in the best places most of the time. IMO living on the move is a good thing for a while if you are single with no responsibilities, but over the longer-term its downsides begin to grate.

There are many civilised first world countries where you can structure tax to get the overall burden down to tolerable levels. For example, you can longer-term trade financial markets virtually tax free in the UK via spread betting. In the US you can be a long-term stock or property investor and pay a mere 15% on your capital gains. Some European countries don't tax capital gains at all. Ireland taxes companies at 12.5% (although that may rise). Quite frankly, in many cases it is worth paying an extra 10-20% in tax to live in your home country, where you know how things work, can communicate with 100% effectiveness, and do not have to move around constantly.

Whatever you earn now, ask yourself would you go and live in Mongolia or Saudi Arabia if you were offered a 50% pay rise. If you answered no, then why vacate a reasonably civilised home country, for the de facto 50% pay rise that you get from moving to a tax haven or becoming a perpetual traveller, and avoiding 1st world taxes?
 
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