Although the title of this article seems to be intended for the top 1%, surprisingly enough, this is something everyone needs to know about – taxes and how to save billions each year.


Whether it’s saving billions or a couple hundred on taxes, it’s still money and there are countless ways to legally avoid it without getting audited.

From charitable donations to the tax-loss harvesting strategy, there are many paths you can take to pay the least amount to Uncle Sam. Learning about taxes is part of adulthood. If you want to know the tricks of the trade and get a great deal each year, you have to put in extra effort to do so and save like no one else.

Similarly to investing, you can either compensate a portfolio manager/adviser based on your AUM or on a commission basis/expense ratio for the same market research you can conduct for your portfolio. No one has a crystal ball. It all lies in opportunity cost. You can pump the gas yourself or pay a tip for someone to do it for you.

Time = Money same thing with boring complex taxes. Education is a blessing.

When it comes to taxes, it’s seemingly complex to most so they convince themselves it’s better to spend a couple hundred on a reliable accountant than learn it themselves where they can end up saving thousands in the future.

Pick your poison but whichever path you pursue, knowing what your taxes consist of, how they’re computed, and where they come from is key. The IRS isn’t on your side, only the FED is, especially during a Democratic-led presidency, Americans have less incentive to work since taxes take up a majority of their income anyway.

The truth is, the more W2 income you earn, the more you give up. Besides earned income, investment, real estate, capital gains, and dividend income are all taxed at different rates and allow you to defer them or avoid them all legally.

The rich invest in assets that appreciate in value while working less. This allows them to pay less in taxes and earn more while the poor pay more in consumption and income tax working for every dollar.

Another downside to earning W2 income (employer-based compensation) is that your reward for promotion is… you guessed it, more work! This leads you into a vicious cycle of lifestyle inflation because you work hard to earn more but have to give up and spend more since you trick yourself into believing you are making more.

Does that make sense?

You know what I mean. More isn’t more anymore particularly when it comes to inflation! $3m is the new $1m. Welcome to prosperous economic times when everything is more expensive due to increased demand and prices.

If you want to know what the deal is with inflation and why it’s a good thing, pop over here. I got you covered.


Image by Unsplash

Tax Tricks

Every multinational corporation to conglomerate wants to pay less in taxes so the government creates a larger deficit. Less spending (no stimulus or better infrastructure, child-care, schools, military, etc.) or more taxes reduce the multi-trillion dollar deficit.

Taking a step back, every individual on Earth, largely in America try to get around every possible charge through founding loopholes because, at the end of the day, this country is one for all, not all for one. The rich don’t want to help the poor.

The richer you are, the larger obligation you have to take care of the country but most pay less in taxes than a minimum wage worker on Medicaid. As much as you may say you love this country, let’s see if you truly pay your taxes.

As we’ve witnessed with the former president, clearly he didn’t practice what he preached. He may have loved this country for his campaign but since he only paid $775 in taxes, he didn’t help anyone except himself.

ViacomCBS Spill

A few days ago, ViacomCBS, a billion-dollar media agency of the provider: CBS was reported to have dozens of overseas tax shelters/havens a.k.a foreign bank accounts to avoid paying billions in U.S. taxes.

Now, this is ubiquitous in the land of business. The more money you earn, the more lawyers and accountants you can hire that will help you store your money in tax havens/shelters to avoid any sort of corporate tax on your gains.

Like investors, owners of the property have to pay corporate or income tax when they sell their gains, corporations as well each year when they generate a profit. Yet with their fat bank accounts and contacts, they’re able to take advantage of tax shelters while the poor have to obey Uncle Sam or they go to jail.

The company (CBS) behind the “SpongeBob”, “Mission Impossible” and “Transformers” franchises who license these movies has avoided $4 billion in U.S. corporate income tax since 2002, according to a study from a Dutch nonprofit.

Now, this is illegal but clearly, for 19 years they got away with it so either someone (IRS) is not paying attention or someone (CBS) is really good at this.

wealth formula

Image by Unsplash

Safe Strategies

Being charitably minded and allocating a set amount to give away is the safest way to avoid taxes along with charging your expenses to your business.

Yet most CEOS and employees go to the extreme and eventually get caught charging their luxury vacations and Range Rover purchases to the business forging an excuse that it was a business necessity.

In addition to the charitably minded, you can get into the tax-loss harvesting strategy. This works well for lump sums or windfalls from the market or inheritances. To avoid paying taxes, you sell your losses to offset your gains.

Vicious Viacom

Bravo CBS for getting away with this? This isn’t just a few dollars on the line. They’ve been hiding and saving billions in the Caribbean since 2002!

Essentially CBS exploited mismatches between tax codes across different regions when they licensed its TV shows and films which were mostly made in the U.S. to overseas.

As with every suspect, ViacomCBS plead guilty to the allegations and stated the study conducted on their fraud was “deeply flawed and misleading and that it “fulfills its tax obligations in all 180-plus countries and the territories are fully taxed in relevant jurisdictions around the world, including the United States, as required by applicable law.”

Yet there’s no guarantee distinctively since ViacomCBS, a media business, not a physical good store, transfers foreign rights of movies. They were able to get around some of those rules through a more elaborate system.

Might as well talk about them since they’re all out there.

This is NOT investment or in this case, taxable advice. You will go to jail plus most likely get caught although billions of dollars on the line weren’t noticed for almost 2 decades.

Anyway, don’t do this. Just learn.

Main Tactic:

Viacom shifted international licensing rights from its Dutch subsidiary to its British subsidiary. In English, this means they created a tax benefit since the transaction was worth $1.8 billion, a sum that could be amortized (intangible goods appreciation) over many years.

rolling the dice

Image by Unsplash

Companies are Too Clever

In all honesty, this is peculiar and spectacular at the same time. Setting up tax shelters in foreign countries that charge no income tax on your money in places such as the Barbados islands to the Bahamas, Denmark, and Sweden seem sketchy to say the least. When it comes to clever tax planning and deals, billions on the line is a big deal and the IRS has to be pretty dumb not to notice it.

Have you gotten started on your tax prep or education for next year?

It’s never too early to start and save!

About the author: Mia Gradelski

Hey I’m Mia, a NYU student passionate about blogging what’s on my mind all finance, tech, lifestyle-related. I'm also an investment analysis intern here at Atticus!

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