alt Hacker NewsIn Ted Turner's autobiography [0] (highly recommended) he describes how wealth individuals got around the very high income taxes in the 1960s-1970s:
- Person A is selling their company to Person B
- The total price is very high (let's say millions)
- I B pays A the millions, A will have to pay a large tax burden
- Instead, A "loans" the money to B so that B can "buy" the business
- This creates a stream of small payments (less tax), spread out over time
I mention this only b/c smart people will eventually figure out ways around these taxes.
For example, there are already "barter networks" in Scandinavia where Person 1 does plumbing for Person 2, Person 2 does legal work for Person 3 who in turn does accounting for Person 1. All so there is less income reported.
Also, uniquely in the USA, interest payments on debt can be deducted from your income. There are some caveats to deducting this from personal taxes rather than business taxes, but in general if you can show your personally used the loan for business purposes, you can use the Schedule C form to deduct the interest on it from your personal income to lower taxes paid.