I pay them every quarter.
What's Mitt Romney's (who I acknowledge as a true baller) effective tax rate?
I don't claim to know the details of Romney's financials - other than an apparent $250 million net worth and an approx $15 mil annual income. He apparently earns 6% on his money if this is a typical year.
What many do is invest at least some money in tax free muni bonds. Muni bonds are not without risk however.
You can also invest some money in variable life insurance products that pay tax-free appreciation - the "Rich Man's Roth IRA".
Insurance products usually charge higher than average fees and often have less-than-stellar investment choices inside them though, so its a tradeoff. You also need to keep in mind that insurance products are basically as good as the company issuing them.
Of course people used to love hiding money overseas. Much harder to do now and get away with it. And you'd better know damn well who the hell you're giving your money to. Lots of scammers out there.
Of course if you can get high enough interest on high-yielding corporate and emerging markets bonds, the after-tax yield on these may make them a better investment than lower paying tax-free munis. These bonds often trade at steep discounts in the secondary market, and buying a diversified portfolio of say 100 different issues of such bonds can be great not only for income, but also for appreciation - those that don't default will tend to pay you a big markup overall from the issuers as the bonds mature. When rates are high or when economies are just turning around, those bonds that don't default tend to pay you enough back in interest and appreciation to far more than make up for the bonds that do default. High yield bonds statistically don't have a much higher chance of default overall than investment grade bonds do, believe it or not. And many of them can be bought for 50% or even 20-30% of par value at times.
