How to avoid paying taxes

There are only two ways of not paying taxes:  On Yahoo there is an article which explains hoiw the super rich avoid paying taxes.  Well, not all taxes but a large portion of Federal income tax.  I'm not super rich so none of those techniques will work for me.  So, what about the rest of us?

If ones income is low enough, one doesn't have to pay income taxes.  I fall into that group.  I'm retired.  I do have a retirement plan but I take so little each month that it doesn't push my income up to the taxable level.  In fact, even as bad as the economy is, my retirement plan earns enough that I earn more than I withdraw.

Of course there are other ways of making money and avoiding taxes that arn't legal.  One can earn money legally, sort of, if thet paid under the table.   Of course theives and drug dealers don't pay income taxes on their earning and neigher do street prostitutes or con artists. 

One can earn money at yard sales and flea markets, barter or trade stuff, or operate a business at a loss.  I've done all of these and believe me, the last one isn't really a good idea. 

Let's face the truth here.  This blog isn't going to help anyone avoid paying taxes nor should it.  Taxes are necessary and we do benefit from paying them.  Our biggest problem is not the taxes we pay but the people who spend our taxes.  Borrowing from the Social Security Funds should never have been allowed, we shouldn't pay for the staff of elected officials or give them such a huge benefit package.

The trouble with term limits is that by the time one learns the ropes, they are no long eligible to hold office. 

I like the idea of a flat tax which is not an income tax but a sales tax.  It would work except it would scare someone to pay 22% sales tax (in addidtion to the state  sales tax and state income tax). 

Under our current system, if a person earns $20.00 he pays at least $3.00 in income tax or 15%.

Under the fair tax, he would get to keep the entire $20.00 (less of course non income tax deductions and state taxes).  If a person buys an item for $10.00 now he pays no additional income tax but under the fair tax if buys a ten dollar item he will pay a 22% tax or $2.20, which is 80 ents less than he was paying in income tax.  But if there is no income tax, the manufacturer and the retailer didn't have to pay tax either so they can afford to lower their retail price.      The cost of the ten dollar item now is just a shade over $8.00 so when you purchase it your total price is around ten bucks. 

So you actually have more money now than yoiu had before.  Everyone has to pay this tax regardless of income.  Even if the money was earned illegally if it is spent legally one has to pay income tax. 

For poor folks like me who do not earn enough to pay income tax, the fair tax has a rebate program so that the first x number of dollars of income is tax free so all taxes payed that should not have been payed will be returned. 

That is why it is called the fair tax--everyone pays their fair share.  A flat tax is still a tax rate on income and it isn't necessarily fair.  A man earning $25,000 a year is way better off if he is single than a man manking $40,000 a year with a wife and three kids, one of whom is a special needs child.  Under the flat tax, both would pay the same percentage.  Under the fair tax, both would pay only what is fair. 

The great thing about the fair tax is no one pays income tax!