I don't get this tax evasion scheme. Can someone explain it? I'm from Toronto, Canada. I don't know if the author had in mind US taxes.
The smart tax evaders do it the slimy smart way. Get paid from work in (1.) equity, use said equity as (2.) collateral to take out a loan for an identical amount, then (3.) never worry about paying it out because your collateral is equal. (4.) You don't have to pay income tax on the loan, they don't pay it on collateral, everyone wins except the government and the common folk. I guess I should say everyone loses except the two parties.
What does "equity" mean here? The quote beneath says "Also get paid in stocks." Thus I don't think "equity" means stocks here...why wrote "Also" if it did mean "stock"?
Does "collateral" mean buying stock on margin?
Why "never worry about paying it out because your collateral is equal"? What if your stock price drops, and broker margin-calls you?
The tax evader wants capital gain, thus don't they have to pay capital gains tax?
Get paid from work in equity,
Also get paid in stocks. The tax rates are way less then earned income..and they are talking about lowering it.