ELI5: Why can’t a middle class individual use the same tax avoidance methods as the ultra rich to pay little to no income taxes?

Lots of good discussion here so this comment will be lost no doubt but worth reiterating that the US is a capitalist society and that that specifically means Capital is king. Not wage income, which is what 99% of working class ppl get for their labor.

Successful capitalists acquire and use capital. Land, property, stock, intellectual property rights, these are the bedrock of wealth. And gains in capital are taxed much more favorably than gains in income. So even if everyone paid their taxes as they should, the capitalist class would still have a lower percentage burden than working folks, for the most part.

When working people claim their share of the true output (of their labor plus the capital that is required to start any enterprise) things will get more equitable. However, Marx suggested this and frankly marxism-leninism and it's children were untrammeled disasters. About the only working examples I can think of, of workers successfully having a stake in the capital of the company, are in startups and tech firms where they own equity.

/r/explainlikeimfive Thread