Nerdville Tax Shelter?

[eric ernest]

I would love to see the comparable statistic for the US, but in Canada, the top 10% of income earners earn 34% of the income in the country and pay 54% of the taxes - so there is a large vocal contingent of people included in the 90% that pay little or no taxes, yet complain anyway. Also, it doesn't take much to get in the top 10% here, less than $100k per year. The tax rules are there for everyone to use, however if you have no assets and low income, you can't take advantage of the few that are favorable to the average person. People like to complain about certain tax rules that favour the wealthy but get amnesia when it comes to the fact that they contribute very little to society, pay little to no taxes, yet take advantage of all the infrastructure that is built with other peoples' money every day.

The top 1% paid 40% of the Federal taxes in 2018. So, they're paying something.

The majority of taxes should be local...not state...not federal.

Much easier to prevent people from gaming the system when they have to answer to the community...unless they "buy off" the local officials...which people WILL figure that out.

This is really our one hope to get out of this mess...to end the bickering.

We should be having these discussions in our communities..not on-line, not with people across the country...and CERTAINLY not with people from another country.

 

[efstop]

I was going to highlight an illegal post, but nah.
Dear Abby said you MUST do only two things in life: pay your taxes, and die

 

[rhys1157]

If I understand correctly, it does not matter if they are "living large" if they are not taking a taxable salary.

They have paid taxes on their previous salaries. They will pay CG tax on dividends, etc..

How much are you worth? Don't answer, rhetorical.

Now, suppose you are worth $500K, just picking a figure out of the air.
Should we tax you on that 500K every year?
Well why the hell not?

Folks seem to think OTHERS should be taxed on their worth, in addition to their annual salaries/earnings..... which is SELECTIVELY SANCTIMONIOUS BULLSHIT.

Goo example: Read the following. and see if you can spot the bullshit.... I'll help...

Bezos, chief executive of Amazon and the owner of The Washington Post, paid $973 million in taxes on $4.22 billion in income, as his wealth soared by $99 billion, resulting in a 0.98% “true tax rate.”Jun 8, 2021

BULL. SHIT. His stock grew. True. No argument. When his stock is exercised, he WILL PAY TAX ON THE GAINS.... Just like anybody else.

He paid 973M on 4.22B. is about 23.1%

But parrots keep saying he didn't pay any tax. he paid $ 973,000,000.... almost a BILLION in taxes.

He’s still a jerk, and probably doesn’t even play guitar haha

 

[eric ernest]

I was going to highlight an illegal post, but nah.

If you don't report illegal activities to the authorities that makes you an accesory....hate to see you go to jail and all that.

 

[ehb]

He’s still a jerk, and probably doesn’t even play guitar haha

I
He is a mondo dipshit. A smart dipshit, but still a dipshit.

 

[rich85]

My economics teacher used to talk about how the richest man in Aus would only be paid 30 grand a year as personal income, yet have 100k in cash in his drawer as he loved gambling. Fun times.

 

[sws1]

When his stock is exercised, he WILL PAY TAX ON THE GAINS.... Just like anybody else.

The likelihood of him paying the same CG rates on all that stock (as you and I) is next to 0 given the provisions of the tax law he has access to.

Having been the recipient of a corporate executive compensation plan, i can assure you there can be alot of "perks" that the average employee doesn't have access to. (e.g., tax true-ups; deferrals, etc) He also has the ability to leave assets to heirs, and have the cost basis reset upon death...skirting a large chunk of taxes.
It's naive just to look at income and CG tax. For someone that rich, there are thousands of rules at his disposal.

While he's the "easy" high profile example for people to use (poster child), it's the less visible mega wealthy that are better examples of "favorable" tax policy. e.g., major real estate developers and section 1031s; hedge fund managers and carried interest, etc.

The actual details and facts are far beyond what should be on a guitar forum.

Back to bonamassa and his supposed tax shelter.

 

[eric ernest]

The actual details and facts are far beyond what should be on a guitar forum.

Or permissible by law.

 

[E.T.]

I've been fortunate that my earnings have increased quite a bit over recent years. While I feel privileged to be able to contribute ever more to the UK national coffers, there are a few break points and bits of tapering where I have had to think, "Hang on, that means over 50% of my earnings are gone in tax!", and one particular year where my tax bill exceeded my take-home earnings by more than 100%. First world problems of course, but it still smarts a bit. I had plenty of years where I genuinely struggled to make ends meet, and still had a decent lump taken from me for tax purposes.

I seem to recall it used to be (and probably still is) the case that once you crossed over a certain income threshold capital gains tax would kick in and you'd be taking home less than you had the previous year. Not that CGT is bad, just that the system needed calibrating a bit better for people who hadn't timed everything so as to have the mortgage paid off before the payrise took them over the threshold.

 

[ehb]

The likelihood of him paying the same CG rates on all that stock (as you and I) is next to 0 given the provisions of the tax law he has access to.

Having been the recipient of a corporate executive compensation plan, i can assure you there can be alot of "perks" that the average employee doesn't have access to. (e.g., tax true-ups; deferrals, etc) He also has the ability to leave assets to heirs, and have the cost basis reset upon death...skirting a large chunk of taxes.
It's naive just to look at income and CG tax. For someone that rich, there are thousands of rules at his disposal.

While he's the "easy" high profile example for people to use (poster child), it's the less visible mega wealthy that are better examples of "favorable" tax policy. e.g., major real estate developers and section 1031s; hedge fund managers and carried interest, etc.

The actual details and facts are far beyond what should be on a guitar forum.

Back to bonamassa and his supposed tax shelter.

I understand your point and Eric's also. I also agree to an extent. They have banks of tax attorneys to find every crack in the foundation. It is what it is.
Respect.


Speaking in general, not pointed at either you or Eric:


What bothers me is the tendency for folks to be led to believe that the answer to everything is "The rich are the enemy, the root of all evil, we must tax them on everything they have repeatedly until they are broke because it ain't fair they're rich and I'm not" Mantra de Bullshit. Numbers on just how much tax is paid proportionally AND the number of folks that pay not a damn penny taxes while getting refunds, rolls off their brain line water on a cue ball. Do they hide shit from taxes? Yep. They also sling a lot of money around in donations too......but they are rich so they are evil incarnate to many even though they DO pay hella taxes.....

The RICH are the enemy and probably responsible for what happened to Dale Sr. and why beer costs so much. It's the RICH.

Not much different than the 'green world' of gigs. Pointing at anybody for hiding green is a bit sanctimonious, what... just on a different scale....except when that proportional term is tossed on the pile....

Class warfare. Best distraction in the world.
Funny how some bitch, moan, whine, about anybody utilizing any tax breaks available to them to the point of pitchforks and torches...... and never look at who makes the rules.....

Logic to a Lemming is like Physics to a Goldfish.

 

[eric ernest]

I understand your point and Eric's also. I also agree to an extent.

I know my comments may seem to the contrary, but I'm a capitalist to the core...period. Powerful and wealthy politicians are the problem, not the wealthy citizen.

I would much prefer to have an empire along the lines of Walter White....I just need to find my Gus Fring.

 

[Liam]

I know my comments may seem to the contrary, but I'm a capitalist to the core...period. Powerful and wealthy politicians are the problem, not the wealthy citizen.

I would much prefer to have an empire along the lines of Walter White....I just need to find my Gus Fring.

I'm definitely not capitalist to the core, but it kind of riles me that anyone might resent me figuring out what the game is (capitalism), and then playing it to the best of my ability (in earnings and equity). Some of the tax breaks that have favoured my income have been put in place to encourage me to grow the business I work in, employ more people, and consequently earn a bit more without having to lose quite so much proportionately (but overall actually pay an increased amount) in tax. I feel no guilt in playing the game in the way that I am encouraged; overall the economic contribution is better.

As you say Eric, wealthy citizens are not the problem. I guess some might think I'm wealthy, but the reality is that I'm doing pretty OK, Joe B is probably doing a bit more OK (I'd at least hope so, he seems a very good fellow, and is phenomenal at what he does), but a few are doing madly better than OK. They are not all politicians, but too many dabble in politics habitually. Their corporations are supremely good at controlling news and social media, which helps them pursue personal aims while no-one notices the thin line between tax avoidance and tax evasion. They have big legal teams that help avoid them getting sued by tax authorities too often. Those people trouble me more than wealthy politicians, as their wealth has helped them avoid the accountability of an electoral system.

I wasn't a grumpy old man when I joined this forum, but an increasing understanding of how it all works isn't all that conducive to good cheer.

Shall we get back to talking about guitars instead of tax and politics?

Liam

 

[rhys1157]

Tan lines !!! Who likes guitars with tan lines

 

[rhys1157]

I’m going to completely change the subject. Who’s started a new band in their extremely late 40’s and found it to be completely life altering !!!

 

[Duane_the_tub]

This post wasn't meant to incite hatred toward creative tax planning (which I am 100% in agreement with since I used to be a tax advisor) but I was more curious to the fact the gear collection was not necessarily "owned" by the individual associated with the collection.

Joe openly talks about his co-ownership setup with Charlie D. Not only "The Turd Pile," of player-grade vintage beaters but also the Bursts. They swap them back and forth.

 

[eric ernest]

They are not all politicians, but too many dabble in politics habitually. Their corporations are supremely good at controlling news and social media, which helps them pursue personal aims while no-one notices the thin line between tax avoidance and tax evasion. They have big legal teams that help avoid them getting sued by tax authorities too often. Those people trouble me more than wealthy politicians, as their wealth has helped them avoid the accountability of an electoral system.

Good observations.

I look at it like this...

If you are a head of a corporation...and you do things like, testify/represent/petition before congress on behalf of your business or industry, YOU ARE AN UNELECTED POLITICIAN.

 

[rhys1157]

Joe said it himself