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LECTURE 7: HOW THE RICH PROTECT THEIR MONEY

OBJECTIVES

 
✔ To gain knowledge of the type of financial loop holes or tricks that allow the wealthiest Americans to avoid taxes.
 
✔ To work out concrete examples, in the classroom, of the kind of techniques that the rich use to protect their wealth, so that these principles seem less abstract and more concrete. Of course, the complexity of the examples will vary by grade level.
 
✔ To demonstrate how the wealthy eliminate the Estate Tax and pass on estates to their children free of charge. Name a few CEOs who have done this. 
 

DISCUSSION QUESTIONS

 
1. Why is it that the true effective tax rate for multimillionaires is actually far lower than that indicated by official government statistics?
 
2. How does a CEO cash in on stocks without triggering capital-gains taxes?
 
3. How can someone sell his real estate or stake in real estate without triggering capital gains taxes
 
4. How do stock options allow CEOs to be in charge of taxes on his compensation in a big way?