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The taxation system has tilted towards the rich and away from the middle class in the last 10 years.
Its dramatic; I dont think its appreciated and I think it should be addressed.
How much does the Oracle of Omaha actually pay in taxes?
How do the wealthy pay lower effective tax rates?
Most importantly,how can you do the same?
They argue that it represented just 0.1% of the growth in his net worth over that period.
That doesnt mean he paid an effective tax rate of 0.1%, however.
The top 25% of earners pay 87.2% of all income taxes.
Still,some of the wealthiest do pay lower effective tax rates, relative to their income.
So why does the government structure the tax code that way?
Vince Porter, CPA, president and CEO ofPorter & Company CPAs, offered an explanation.
Tax policy is one of the most powerful tools the government has to shape the economy, he said.
Offer energy credits for clean electricity.
Want to reduce dependence on foreign oil?
Provide tax incentives for investing in domestic oil and gas.
Want to influence the real estate market?
Allow mortgage interest deductions, property tax write-offs, tax-free exchanges and depreciation benefits that reduce taxable income.
Tj Binkowski ofNarrow Road Financial Planningadded that thewealthy can minimize their taxable incomeby borrowing against their investments.
It works as long as their investments grow faster than their debts.
Some call it unfair, but do we want the government taxing our loans as income?
Do we want the government to tax unsold stock as it bounces around in value?
We the little guys benefit from this stable tax system as well, he said.
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