New York 2006

Chapter 116 A Guide to Tax Avoidance for Rich Americans
On the morning of April 2007, 4, Monday, Luo Ji woke up exhausted from his bed in his bedroom. Three consecutive days of high-intensity concerts in New York were indeed very tiring.

Especially on the last day of the concert, Sunday, Luo Ji had a sudden idea and wanted to learn how to sing and dance like Bruno Mars, but he twisted his waist. Fortunately, he was relatively young, so he would be fine if he took it easy, otherwise the concert might have ended midway. it's over.

After breakfast, mother Sammy sent her brother Chucky to school, while Queenie went out to chat with her new neighbors.As a superstar and billionaire, Luo Ji, accompanied by his assistant and bodyguard, drove to the company.

Max sorted out the documents at hand and said politely: "Just wait a moment, I'm very busy now."

Luo Ji waited for a while. Max was still sorting out the documents, as if he was so busy that he had forgotten his presence. Luo Ji had nothing to do, so he just walked around. Seeing that Max ignored him, he left, and then came to Jeff Basker. 's office.

"Just wait a moment, I'm very busy now."

Jeff Busker covered the microphone with his hand and said to Luo Ji with a smile.After he finished speaking, he continued talking to the person on the other end of the phone. Luo Ji raised his hand to signal and left.

Luo Ji went around in a circle, and everyone at Future Records was busy.It seemed like the effect of signing so many singers at once was very good, and Luo Ji left with satisfaction.

Back in the office, Fiona had brought a large pile of documents for Luo Ji to process.

It took more than an hour for the singer to sign and confirm the contract, apply for employment as a new employee, apply for purchasing items, etc. It took Luo Ji more than an hour to process the documents from each company. Luo Ji looked at the tax payment documents sent by accountant Lin Qingji. It is the tax payment season in the United States in April. arrive.

Huli Internet Company Tax Application Form, Future Records Tax Application Form, Logic Artist Management Company Tax Application Form, Logic Holdings Tax Application Form, Luo Ji Personal Income Tax Application Form.

After looking through several documents, Luo Ji couldn't help but feel a little sick.Even though he has tried every means to invest his money, it is still not as fast as he is making money, and he will have to pay a large amount of tax this year.

Luo Ji directly picked up the phone and dialed accountant Lin Qingji: "Didn't I ask you to find ways to avoid taxes reasonably? Why are there still so many taxes this year?"

Lin Qingji immediately spoke: "Your biggest income this year was received in April, and you have to pay taxes in a few days. Since you didn't invest all of it, you will definitely have to pay more taxes. I really can't blame you for this. "

This is how modern society actually works. If an individual or company makes money and does not invest or consume to maintain market prosperity, the government will tax it at a certain interest rate.

Although the reality was like this, Luo Ji still felt very painful.

"I don't want this to happen next year. The tax rate is too high. The comprehensive tax rate is almost 25%. It's impossible for me to control when the income will arrive."

Lin Qingji thought for a while and said: "Then the best way is to register the company in Delaware. Then use reasonable tax avoidance methods to reduce a certain percentage of federal income tax, state tax and local tax."

"Why are you going to Delaware?" Luo Ji asked doubtfully.

“Because Delaware has a special legal system for companies, there are no juries, only judges who are familiar with corporate law, which helps companies avoid lawsuits. The laws of the entire state are biased towards protecting investors, major shareholders, and management. Therefore, wealthy Americans generally strongly support Delaware politicians, such as Senator Bai from Delaware, who has a particularly high reputation within the Democratic Party."

Luo Ji asked doubtfully: "Is this necessary? I have avoided taxes reasonably. Will the IRS sue me?"

Lin Qingji explained: "It's too simplistic for you to think like this. The IRS will not care about you. No matter what complicated tax avoidance methods you use, because of previous precedents, they collect taxes based on the principle of commercial purposes." and the principle of economic substance. As long as they can prove that your purpose of transferring funds is to avoid taxes, the judge will rule in favor of them. At that time, you will not only have to face jail time, but also have to make up for the taxes. But as long as the company is registered in Terra In Washington state, judges will protect the interests of the rich."

“So, you can’t escape politics when running a company in the United States?”

"Yes, the politics and economy of the United States are closely linked and cannot be escaped at any time and anywhere."

Luo Ji thought for a moment and said, "What about those offshore financial centers abroad? For example, Bermuda, the Bahamas, and the Cayman Islands. Don't they all say on the Internet that they are zero-tax zones?" "Hahaha, you think too simplistically. The governments of various countries will not be so stupid. The governments of various countries collect taxes based on the principle of territoriality. If your company operates locally or you live in your own country, you have to pay taxes and they will not care about you. Where is the company’s headquarters?”

Luo Ji asked, "But Apple, Microsoft, Starbucks, Google and other big companies all use these regions to avoid taxes?"

"What you are talking about is because the United States will impose a tax of about 15% to 30% on the overseas profits of companies. That is because they are global multinational companies and they can transfer money overseas. The money will not be transferred at all. Transfer it to the United States and invest or save it outside. If they transfer the funds to the United States, they will also have to pay taxes. For example, the profits they make in the EU can be taxed through Ireland and offshore financial centers to avoid taxes. It’s down to about 1% to 5%. But if the profits are transferred back to the United States, they have to make up the difference.”

Lin Qingji paused and then said: "You can transfer profits overseas and avoid taxes in this way, but assets overseas are just a number. You still have to spend the money on yourself or the company. When the time comes, the funds You still have to pay taxes when you transfer it back.”

"What about profit shifting? Through things like anonymous accounts."

Lin Qingji hurriedly stopped: "Don't, it's money laundering. The US Internal Revenue Service has the right to access the SWIFT global rice dollar settlement system. As long as it goes through the bank, you can't escape tracking."

Luo Ji finally gave up the idea and asked about business: "What are the reasonable tax avoidance methods you mentioned?"

Lin Qingji said: "First, it is a charity fund. You have already done this. Second, you have already done it. It is to open a company and convert all your personal income into company income. Logic Investment Company, Logic Artist management company. After all, the personal income tax rate is much higher than the corporate tax rate."

"Okay, I know all this, tell me what I don't know."

Lin Qingji said: "Third, you have actually done it, which is to invest the company's profit money to expand the company's operations, invest in stocks and so on."

Luo Ji said, "I know this, but what should I do when I need cash?"

Lin Qingji smiled and said: "You invested in stocks and expanded operations. Although the company is not profitable at this time, capital gains tax must be paid when the stocks are cashed out. But the total value of the company and stocks is also growing. If you urgently need it at this time Cash. You can use the SBLOC financial product, a securities line of credit, just launched by Wall Street."

Luo Ji became curious: "What is this?"

"For example, if you have 1000 million General Electric stocks, you can put these stocks with them, and then you can get 1000 million in cash. This kind of financial product has a feature that it does not limit the direction in which you can use your funds, and The larger the asset size, the lower the interest rate. If it exceeds 1 million yuan, the minimum can be [-]%, and as long as the value of the mortgage stock does not shrink, the customer only needs to pay back the interest."

“When did this financial product come out?”

"At the beginning of this year." Lin Qingji continued with a smile: "As ProPublica founder Paul Steiger said, if you own a company and you have a huge salary, you will pay most of it 37% personal income tax. If you choose to sell the company's shares, you must pay 20% capital gains tax and lose some control of the company. But if you borrow an SBLOC, the interest rate you need to pay is only personal. Number of digits, and you don’t have to pay taxes.”

Luo Ji said: "Okay, I understand. What you mean is that when tax payment season comes and you have a large amount of cash, you can directly transfer the money to Logic Investment Company and then buy stocks if necessary. Where you have cash, you can use an SBLOC loan directly, and you don’t have to pay the high interest rates of a traditional commercial bank mortgage.”

Lin Qingji continued: "Yes, but this also has certain disadvantages, that is, if your company avoids local taxes and pays less tax, it is very likely to be harassed by local government departments or the U.S. Internal Revenue Service. This is why I ask you to move the company headquarters The reason for registering in Delaware is that if you get sued, Delaware will support you.”

"Ah."

Lin Qingji continued: "Of course, there is a way to avoid this kind of thing happening, that is, you support the politicians where the company is actually located and let him help you prevent this kind of thing from happening within the government. If you are familiar with each other, These politicians can not only do this, they can also give you policy preferences, tax rebates and even interest-free loans and practical support such as subsidies."

Luo Ji exclaimed: "There is really no separation between politics and business in the United States. Through the revolving door, I can openly bribe government figures to do things for me!"

(End of this chapter)