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View Diary: Gérard Depardieu avoides French tax rules by accepting Russian citizenship (50 comments)

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  •  But there are deductions and loopholes. (1+ / 0-)
    Recommended by:
    Tailfish

    Anyone smart/lucky enough to get rich knows enough accountants, lawyer and financial planners to shield wealth. Somehow the country survived and PROSPERED before Reagan started blowing up the deficit and cutting taxes.

    Remember the corporate jet subsidy?

    **Your beliefs don't make you a better person, your behavior does** h/t Clytemnestra/Victoria Jackson

    by glorificus on Sun Jan 06, 2013 at 07:06:50 AM PST

    [ Parent ]

    •  That's true (0+ / 0-)

      I think you need to look at the all-in effective tax rate.  I don't believe that under Reagan we had an effective rate of 90%, or even 75%.  My point is that up at levels like that, you might have some people leave.

      •  There were loopholes galore in the pre-1986 tax (0+ / 0-)

        law.  It's impossible to overstate how much the '86 act shut down loopholes.

        •  But the corporate jet subsidy still exists, does (0+ / 0-)

          it not?

          **Your beliefs don't make you a better person, your behavior does** h/t Clytemnestra/Victoria Jackson

          by glorificus on Sun Jan 06, 2013 at 07:28:36 AM PST

          [ Parent ]

          •  I guess I'm not sure what you mean. (1+ / 0-)
            Recommended by:
            kat herder

            slightly accelerated depreciation?  Sure that exists, but there are other anti-abuse rules that exist that make it hard for people to use it (viz, hobby loss rules and passive activity rules).  

            Imputed comp for personal use?  I'm not 100% sure how this is structured, but my recollection is that, under current law, the exec is deemed to have comp in the amount of the deduction that the business takes.  That's not a loophole, that's the matching principle - the thing that animates and structures the entire tax law - at work.  What people are calling a loophole is actually the absence of a special provision that would treat that differently than anything else in the code.

    •  There are limits to deductions & loopholes. (1+ / 0-)
      Recommended by:
      kat herder

      I've done income & estate tax advising for super-mega-wealthy people for 6 or 7 years, and there are very definite limits to loopholes.  For a W-2 earner w/ investment assets - even when their AGI gets into 8 digits - there's only so much they can do.

      re: corporate jet subsidies and the like: those are great for people that happen to be in a position to take advantage of them, but it's not like a person making a zillion dollars can go out and set up a jet company and start taking advantage of it.

      •  No, this was for owners/users of corporate (0+ / 0-)

        jets, iirc. There was a controversy over it not that long ago, during President Obama's first term.

        Even with the "very deifinite limits to loopholes" the very wealthy still keep a LOT of money.

        **Your beliefs don't make you a better person, your behavior does** h/t Clytemnestra/Victoria Jackson

        by glorificus on Sun Jan 06, 2013 at 07:31:20 AM PST

        [ Parent ]

        •  It was for execs of companies that had jets, (1+ / 0-)
          Recommended by:
          kat herder

          and involved the imputed compensation for non-business use of the plane.

          So a rich person can't just say, "I think I'll set up a jet company......" and make use of the exception.  They already have to be an exec of a company that uses jets in its line of business.

          Funny you mention this, because I recently dissuaded a client from plopping a personal-use jet in a corporation; they thought they could get some tax benefits, which apparently is a common misperception.

          •  Or are you talking about 5-year versus 7-year (1+ / 0-)
            Recommended by:
            nextstep

            depreciation? Again, most super-wealthy people can't take advantage of that; the jet has to be used for business purposes, which is a tough bar to clear.  I've never had a client take the position that a corporate jet was a deductible expense, just because it's too hard to beat the anti-abuse rules that exist to preclude loophole-y use of tax breaks like that.

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