If you happen to be super rich, you’re probably well versed in all the ways to not pay your income tax. For the wealthy, skimping on paying income tax is so ubiquitous that the average tax rate paid by those making $10 million a year is only 19 percent. Comparatively, the tax rate on an annual income of $388,350 or more is 35 percent.
There are many ways to significantly reduce one's taxable income, thanks to a gracious amount of loopholes in tax law. America’s wealthiest individuals can place funds in offshore accounts, funnel it through shell companies, or make generous tax-deductible donations to their spouses in order to reduce income tax rates.
One popular method of income tax reduction involves deducting the fair market value of a donated item. For example, as a wealthy person, you might purchase a sculpture for $1,000. Some years later, you can have it appraised for $10,000 before donating it to a needy organization. Now you can deduct $10,000 from your taxable income!
