It sounds like you're describing the illegal hiding of money, which I'm sure does happen. But I would think that most wealthy people would rather not risk going to jail, and I do know that you cannot just move overseas to get out of taxes. You can renounce your US citizenship, but they can actually deny that if they think you're doing it to save taxes.
But beyond that vague, general knowledge I certainly don't know much about ways the ultra-wealthy evade taxes. I do know that they didn't have the gaping capital gains loophole until now, and as far as I know they didn't all move to other countries.
Then I believe you are saying "we gotcha", right? Or in other words we have a disagreement. My thesis is that the uber rich will generally find a way to avoid (not evade) taxes and I believe your position is that it is impossible/unlikely because we will catch/punish them.
I would refer you to prohibition. It seems to me that at some point people will not willingly agree to ten times the taxes for the same amount of representation. Tax evasion is illegal, as we all know. But tax avoidance -- finding loopholes in the law -- is an American tradition. Think I could find as many loopholes with my 10K as somebody else could with their 10 mil? I kind of doubt it.
I note that the income tax was passed in 1913 in the U.S. I think it was really low -- something like 6% on income over 200K. The very next year, the tax was raised to 85% on the wealthy as a way to finance WWI.
Now practically speaking, do you think that all wealthy people actually paid 85% taxes? Just from a intuitive standpoint, doesn't it seem like this would sack the people at the low end of the wealth scale -- those without tax attorneys and multiple streams of revenue and corporate aliases -- not the truly rich, who saw the law coming and already found ways to protect their investments?
I'm not a tax law specialist so I can't comment on specifics. But intuitively it seems like most people would act in their own self-interest. And it seems that the truly rich have many more options than most folks do. So as a general rule of thumb, I would think that at some point you are going to lose money by raising taxes.
Just intuition, mind you. Lots of room for disagreement here.
I don't think anyone would suggest raising it that much. I just want to get rid of the concept of capital gains entirely, so it would then be taxed at the personal income rate (up to 35%ish now). Or maybe not get rid of it entirely, so as to help the middle class save/invest, but do tiers.
There's a big difference between loopholes and tax evasion obviously, and the alternative minimum tax largely closes loopholes. (The AMT currently has its own problems, but is a step in the right direction.)
But beyond that vague, general knowledge I certainly don't know much about ways the ultra-wealthy evade taxes. I do know that they didn't have the gaping capital gains loophole until now, and as far as I know they didn't all move to other countries.