Why can’t a middle class individual use the same tax avoidance methods as the ultra rich to pay little to no income taxes?
In: Economics
The offshore method requires a lot of money to set up. This applies to business owners or brand owners of the super rich. They pay to set up a business in a tax haven (e.g. Panama) and pay lawyers to make that business (in the tax haven) the legal owner of the IP. All the profits are given to this Panama entity as the legal owner of the IP. The business in the USA doesn’t make any profit because they are paying the Panama business a “fee” for the right of using the brand/business assets owned by the company in Panama.
This is how they avoid making tax in the USA and other countries they operate. They then pay themselves a “wage” for being on the board of both companies.
The middle class do not have access to this sort of set-up.
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