How to not pay your taxes legally, apparently

Scope and Practicality of the Article’s Advice

• Many point out the article is specifically about avoiding tax on exits (e.g., using QSBS), not “never paying taxes.”
• Several note it only applies if you first create something worth many millions; that’s “step 0” and is non‑trivial outside of VC fantasy scenarios.
• QSBS details and caveats:
  • Works for C‑corps, not S‑corps; state treatment varies.
  • Acquirers often prefer asset purchases to avoid liabilities, which can break QSBS benefits.
  • The real benefit is exclusion of up to $10M in capital gains, not $10M of tax.
  • Five‑year holding is hard to game legally; “creative options” are disputed.
• Some warn following aggressive schemes is a good way to get audited; “LLC is not a tax entity” is reiterated.

Who Can Actually Avoid Taxes

• Repeated theme: serious tax optimization is mostly available to the already wealthy—those who can pay top firms and set up complex structures or move jurisdictions.
• Counterpoint: forming an LLC and using small‑business incentives is accessible and encouraged by many governments, so “little guys” can do some optimization.
• But many “loopholes” only make economic sense above high income/wealth thresholds.

Morality vs Legality

• One camp: nothing wrong with legally minimizing taxes; if the state wants money, it should write airtight, simple laws.
• Another camp: legality and morality don’t fully overlap; exploiting intentional or accidental gaps shifts the burden to lower‑earners and undermines social trust.
• Debate over whether paying taxes is itself moral when governments also fund wars or policies some consider immoral.
• Some frame taxes as a “defector game”: free‑riding via avoidance invites backlash and political instability.

Loopholes, “Bugs,” and Policy Design

• Disagreement over whether loopholes are “bugs” (unintended) or “backdoors” (deliberate favors). Likely both exist.
• Complexity of the code is likened to complex software: impossible to make bug‑free, heavily tested “in production.”
• Many exemptions began as policy tools (to encourage investment, avoid double taxation), but function as opaque subsidies to the rich.
• Suggestions include radically simpler systems with few or no deductions, even removing charity exemptions; others argue this is politically impossible.

Inequality and Political Power

• Widespread belief that wealthy individuals and corporations lobby for and shape these exemptions, then use political donations to prevent reform.
• Perception that ultra‑rich exploit global arbitrage (Monaco, Portugal NHR, Puerto Rico, etc.), while ordinary workers pay “sticker price.”
• Several note US citizenship‑based taxation is unusually sticky, making true escape costly (renunciation, exit taxes, potential penalties).

Government, IRS, and Enforcement

• Strongly mixed views on the IRS: from “honest backstop” to “dishonest grifters” based on personal horror stories and long disputes.
• Some argue enforcement focuses on easy targets while those with elite advisors can push the envelope.
• Others emphasize the IRS does punish blatant schemes (e.g., aggressive deduction shells) and that some popular “just deduct everything” ideas are clearly unsafe.

Meta: What Counts as a ‘Loophole’?

• Observation: commenters call exemptions they dislike “loopholes” and ones they support “incentives.”
• No agreed objective standard emerges for distinguishing a fair incentive from an illegitimate loophole.