[caminante]

In what way?

[harryh]

As in it's something that people seem to think based on no real evidence.

[caminante]

I think I understand what you're getting at (i.e. it's not as widespread?), but at the same time, I can think of numerous situations where wealthy individuals use deductions and tax advantaged assets to shield income.

Wealthy individuals have greater spending flexibility and access to things like trusts, asset relocation to no-tax locations, deductions, etc.

In '09, 35K households with income over $200K reported 0 tax liability [1].

[1]http://www.businessinsider.com/some-of-the-wealthiest-pay-no...

[tiler]

You do know what happened in 2007-2008 which allowed for this, right?

[jessaustin]

Admitting that the wealthy played accounting games in one particular year doesn't exactly disprove the thesis that the wealthy play accounting games.

[harryh]

It's not accounting games to pay lower taxes when you lose a lot of money.

[caminante]

In a downturn, I wouldn't necessarily assume that someone has sufficient gains to offset their losses. They could just be losing money.

Also, there are restrictions on how you carry forward losses and how much you can deduct in later years.

edit: I think the issue is you're being nuanced about the connotations of "accounting games" (I mention this downthread and argee that some tactics are straightforward.) the user [tiler] above, responded as if the recession explains how 35K people with $200K+ income had 0 tax liability, which is silly.

[caminante]

If only the story hasn't been repeating...Here's a similar article from 2013 [1].

Right?

[1]http://www.forbes.com/sites/beltway/2013/09/05/how-some-high...

[harryh]

It's not exactly an accounting trick if you do one of the following:

1) Earn most of your income in a foreign country so you pay taxes there instead of the US.

2) Earn most your income from tax exempt bonds.

Anyone can do this. You don't need a fancy accountant. Just either:

1) Move to a foreign country and get a job there.

2) Buy a bunch of tax exempt bonds.

These aren't people with high paying jobs somehow magically not paying taxes on them. So, like I said: "largely a myth".

[caminante]

I reject the premise that anyone can move to a foreign country, select tax exempt bonds and gross at least $200K/year. Maybe you as someone who appears smart and ambitious could pull it off consistently, but that's tough to do.

You seem to be getting hung up on whether there's anything "novel" about a subset of tax avoidance schemes and not mentioning trusts or other tax schemes disproportionately used by wealthy individuals such as offsetting income with high medical costs or moving assets to lower-tax jurisdictions.

FWIW, the IRS study in the article referenced breaks down these expenses for folks without worldwide income.