Tax Shelter and Tax Haven

For instance, housing plans, housing plans that offer food, shelter, and clothes, and even nonprofit, and social, organizations to help fund housing developments. There are even organizations that offer help with financial issues as well. “Coal for the Homeless.” Coalitionforthehomeless.org, n.d. Mon. 16 Nov. 2015. : Long-term housing solutions, “Financial housing programs are one of the most successful housing-based solutions to reduce homelessness. The two largest federal housing programs are public housing and federal housing vouchers…” Jim Romeo. “Gale Group.” Poverty and Homeless, 2009. Mon. 16 Nov. 2015. : There’s a new strategy, “...the newly homeless get shelter, food, clothing, and access to government and nonprofit services.””Here’s How We Can Fight Homelessness.” Center For American Progress Action Fund, 2005-2015. Mon. 16 Nov. 2015. : Mainstream sources need to be looked into by individual communities to help aid their own homeless people, such as, “Medicaid or Temporary Aid to Needy Families (TANF).” How many people are homeless in

 Arranging your affairs to keep your tax liability as low as possible under the tax law

Use Tax: prevents avoidance of sales tax (same rate as sales tax- use or consumption of personal property)

opportunities to avoid taxes by decreasing how much money one can put into a tax free savings

3.1). One of these ways is through taxes, in most states you have state taxes which go directly to the states but everyone has federal taxes. Federal Taxes go directly to the government to use to support the people, let us now take a look at the Internal Revenue Service (IRS.) The IRS is a federal agency that is under the control of the Department of the Treasury. The main purpose of the IRS is to collect taxes in which the federal government then uses in its budget. One advantage that the IRS has is that is has increasingly improved over the years by increasing its representation as well as the amount of audits while incorporating new technologies. One disadvantage that the IRS has is the complexity of the tax code and the ability for individuals to find loopholes or to create tax havens through off shore accounts. The option to maintain the advantage that the IRS holds is to continue to use technology and the efficiency that comes with it. By taking advantage of the technology you will increase the chances to identify tax dodgers and the likely hood to audit a tax return. An associated press journalist Ohlemacher (2015) is has quoted the IRS Commissioner John Koskinen as saying “This year, the agency's computer filters stopped almost 3 million

Shifting income and transforming deductions from nondeductible to deductible status are beneficial ways to lower your tax bill. If you own a business, you can control income and expenses easily. For example, you can use a cash accounting or hybrid cash-accrual method and postpone billing customers until the new year to defer income in years when your income places you at-risk of falling into a higher tax bracket. You could also buy capital equipment and perform essential repairs and upgrades to keep from paying too much tax. If your business is slow in any given year, you can accelerate income or defer making repairs or buying capital equipment.

drawing upon past tax reserves." , Is it a good idea? Why does the U.S.

The main objective of many companies is to minimize their tax obligations. Jeffers (2014) discussed the reason of why companies adopt tax inversion strategies. The researcher indicated that the income maximization is a major reason of companies attempting to reduce their tax liability (pp. 100-101). Tax inversion strategies provide companies an advantage to lower income tax rate. Today, U.S. corporations renounce its U.S. citizenship and move to low-tax countries. Companies that reincorporate oversees are not obligated to pay U.S. taxes on earning income (p. 99). Many countries implement tax competition strategies to attract and retain businesses. Well-known companies, such as Exxon Mobil, Hewlett Packard, Tyco, General Electric, PepsiCo, etc. take benefits of tax shelter opportunities overseas (p. 102). Other benefits of the jurisdiction abroad are flexible banking laws and simplified litigation processes.

While the concepts, statistics, and conclusions Noah raises are vitally important to the overall message of the book, it could never achieve critical acclaim without its accessibility to the everyday reader. While many of the concepts seem above readers’ heads, Noah’s direct, clear, and concise writing style ensures that he will not alienate an audience uninformed about the nuances of the US tax code.

According to Leo, Knapp, McGowan, and Sweeting (2015), deferred tax refers to the future tax consequences that result from the differences between accounting and income tax treatments.

Under the protection of an asset, the grantor keeps the authority of his assets to himself only claiming them to be a disregarded legal entity. The assets being disregarded legal entity it is responsibility of the grantor to pay tax on his protected assets. Disregarded legal entity is also known as "Income Tax Neutral"

The 1969 Act imposed a 10 percent minimum tax, excluded gains, and limited the alternative rate to $50,000 of gains. The 1976 Act further increased capital gains tax rates by increasing the minimum tax to 15 percent. The Act also increased the holding period defining long-term capital gain which receives preferential tax treatment, from six months to one year. In 1978, Congress reduced capital gains tax rates to 28% by excluding 60 percent of realized capital gain from tax. The 1981 income tax rate reductions further lowered capital gains rates to a maximum of 20 percent. In combination of stridently rise of depreciation write-offs in 1981, Capital gain tax cut in 1978 and 1981 caused the creation of tax shelters. The tax shelter losses rose significantly from $10billion/year to $160 billion per year by

A business owner that is generating excess cash on top of what they require to survive can take advantage of a tax deferral that is not available to salaried employees. The excess income generated can be invested in passive investments within the corporation. Since the excess income has been taxed at a lower corporate rate, this leaves more funds available for investment which allows for a higher level of compounding as well. Salaried employees are not in a position to be able to defer tax on an unlimited amount of income. Even though the business owner will eventually have to pay themselves dividends, Ottawa feels this deferral advantage gives them an unfair advantage over salary-earning Canadians.

In addition to economic issues, taxation is also a political issue. Political leaders formulate tax policies to bring reforms in the taxation system in order to promote their agendas. The major tax reforms include: increasing or decreasing the tax rate, imposing new taxes on certain products and changing the definition of taxable income. It is evident from the research studies that no one deliberately wants to pay taxes. U.S’ tax policy reflects expression of influence - i.e., those who have power are successful in paying low taxes and their burden is shifted to people who have no power. Therefore retired individuals, small business owners and farmers find ways efforts to reduce their tax burden. Since its existence, tax policy has been enormously used for promoting political and economic agendas.

A tax haven is a country that offers foreign corporations and individuals relatively low corporate and income tax rates, with a politically and economically stable environment. Some tax havens are Switzerland, Hong Kong, Bermuda, Ireland, and the Cayman Islands. Although the businesses have moved across seas, the United States forces them to pay the corporate tax. Fortunately for the businesses, it they keep their income and money across seas they do not have to the pay the American corporate tax, Unfortunately this is ghastly for the United States Government businesses keep their products and profits over seas.