Take a CEO like Steve Jobs with that $1 annual salary. He doesn’t make money off of a salary, he’s rich off of all the assets and passive income that generates from it. And assets/passive income have so many more variables to play with. I seriously doubt someone like him pays the 35% tax rate, or sweats on which direction the government’s tax rules blows any given day.
You haven’t been paying attention…
LTCG tax is 15%.. BUT!!! if you are making over the AMT override minimum.. it don’t matter. You pay 26% fed. It overrides your LTCG rate. LTCG are taxed as income in CA, which is 9% top bracket. Best options is that you get skinned to 35% if all your income is LTCG.. even if you bring in $0 salary and $100mil LTCG. I know because I got skinned on some nice LTCG profit this way.
You know.. with your constant ‘passive income’ statements, you sound like Casey Serin.
There are ways to use businesses to shelter income.. but you have to be real real careful. The IRS is clamping down on the abuses. The business has to be real and documented receipts.
Bottom line, really rich people have plenty of smart accountants, cpa, advisors, to figure ways around the system (legally, and sometimes illegally).
This is what is sold to the public.. but it is not completely true. I said “not completely” because the ways that some do it are illegal.
IRS defined middle class and below don’t pay the majority of the taxes either. It’s everyone in between. Always has and always will be.
Umm.. not correct. When Ronald Regan was governor, he was paying over $200k in taxes (fed) yearly. Back then, that was some real money too..
