It's not just that, it's also the fact that having a lot of money makes it easier to get more money too.. and also pay less taxes.
I won't go into details, because they're country specific, but earing a wage here, especially an above-average (think engineer not richy rich) means you pay around 50% of your money in taxes. The percentage the government gets from the customer to your bank account (including the employers responsibilities and VAT) is even higher.
What you can do to optimize taxes is to drive 5, 6 hours to a different country, open a company there, and start charging the customers via that company... since the company profits are taxed a lot less, you pay only ~10% taxes. Because you want health insurance in your home country you also become an "inependent contractor" there, pay minimum taxes and get medical, kindergarden for your kids etc.
Now, if you're an engineer, with 1.5x-2x average paycheck it is possible but just not worth it... two accountants, driving there every now and then, two different taxes, fixed startup fees, fixed fees for yearly reports etc., plus the added risk of something going wrong, dealing with foreign tax inspectors etc.
If you're earing 20x the average paycheck, the fixed yearly costs are the same, but the 50%->10% tax reduction is a huge saving.
Same with companies... facebook can register a company in ireland and syphon their money over there, but for a mom and pop restaurant it just isn't worth it.
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It's not just that, it's also the fact that having a lot of money makes it easier to get more money too.. and also pay less taxes.
I won't go into details, because they're country specific, but earing a wage here, especially an above-average (think engineer not richy rich) means you pay around 50% of your money in taxes. The percentage the government gets from the customer to your bank account (including the employers responsibilities and VAT) is even higher.
What you can do to optimize taxes is to drive 5, 6 hours to a different country, open a company there, and start charging the customers via that company... since the company profits are taxed a lot less, you pay only ~10% taxes. Because you want health insurance in your home country you also become an "inependent contractor" there, pay minimum taxes and get medical, kindergarden for your kids etc.
Now, if you're an engineer, with 1.5x-2x average paycheck it is possible but just not worth it... two accountants, driving there every now and then, two different taxes, fixed startup fees, fixed fees for yearly reports etc., plus the added risk of something going wrong, dealing with foreign tax inspectors etc.
If you're earing 20x the average paycheck, the fixed yearly costs are the same, but the 50%->10% tax reduction is a huge saving.
Same with companies... facebook can register a company in ireland and syphon their money over there, but for a mom and pop restaurant it just isn't worth it.