Buffet & Romney - How do they get their rates so low?
I've done a little bit of research and am curious to see if anyone can offer any genrealities or concepts that they use to drive their effective tax rates as low as has been reported.
The tax code is the same for all of us, so how are they leveraging it to the extreme?
thanks!
Most Popular Reply
There are several ways to lower the effective tax rate.
The type of income as mentioned above makes a huge difference.
Credits, deductions and exemptions can also greatly reduce the effective tax rate.
Those that pay the highest rates have a great deal of income that is taxed at ordinary income tax rates.
One of the greatest tools that large corporations use today is shifting income to foreign countries and not bringing this income to the US. This is one reason that large corporations might have huge cash reserves, but need to borrow because they don't want to bring the overseas fund to the US were they would be subject to income tax.