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Because most loopholes are in fact deductions that are there for a reason. The overall tax rate is too high (or it would be too expensive to lower the overall
by charlesdm 9y ago
Because most loopholes are in fact deductions that are there for a reason.
The overall tax rate is too high (or it would be too expensive to lower the overall rate), so politicians give certain people sweetheart deals on certain things because they consider it relevant, thus offering someone, somewhere a tax break. Others are then free to use the same deduction for their benefit.
The wealthy aren't stupid. They're generally quite pragmatic and flexible when it comes to making money.
- jazzyk 9y agoMost loopholes are aimed at big corporations and high-income people ($1M+). You and I cannot take advantage of them easily. Loopholes: - obfuscate the fact that "certain" people, who should be paying 35% are not, in fact, paying a penny. - give incredible power to the people who decide what "certain" group to reward with them or threaten to withdraw them
- charlesdm 9y agoYou can actually use them, but probably are not, since you're a high income, high income tax paying person? If you can earn $300k a year as an entrepreneur, vs $300k as an employee, then it's a lot more likely you'll be paying significantly less taxes when going the self employed route.