For all of my better traits and skills,I have precisely no talent in anything likely to provide a huge paycheck. If you subtract three zeros from LeBron James’ paycheck, you are still a little north of mine. I do daydream about breaking into the big leagues through some sort of happy accident or finding a long-lost rich uncle. Hey, I work a boring job and the hours are long!
One thing I’ve noticed in running calculations in my head (yeah, I’m a nerd, I do math in my head for fun) about earning that kind of money is that taxes quickly take a really big bite of that money. If you were to take the cash option after winning a big lotto jackpot, expect to only receive about 40% of that money! So when I stumbled onto this infographic, I thought it was interesting to see what kinds of things that some of the top earners are doing to lower their tax bill.
The way that I see it, David Chou’s story is my best bet for getting rich. Perform some mundane task for a cash-poor startup and wait for their number to hit. Of course, not that many startups are writing ebooks, which is where my side income mostly comes from. I guess I will have to come up with a different plan!
I guess I could always hope for the Lindsey Lohan method of getting somebody else to pay my bills. Anyone want to volunteer?
It’s really crazy to think that most of the $10 million difference between LeBron’s and Kobe’s salaries are eaten up in taxes. While its unfortunately that Christiano Ronaldo’s salary would have to double to see any increase in income, I guess he should count himself lucky that his salary is grand-fathered into the old tax law. I don’t think it works that way in the US. Imagine your net-income being cut in half because of a change in tax laws!
Of course, since Ronaldo’s net income under the new law is still more than what I will make in this lifetime, I don’t have that much sympathy for his plight.
At the end of the day, that is probably what the whole Occupy Wall Street movement was probably about. The average person simply can’t imagine why somebody would get upset to “only” receive $8 million after taxes. Like Sheldon Adelson who donated to Romney because Romney’s tax plan would have saved him $2 billion in taxes. Who really needs an extra $2 billion?
What is your favorite celebrity tax story? What are your feelings on the high taxes charged to those with high incomes?