What is a Tax Shelter?
University of Texas law professor Calvin H. Johnson has written about the various definition of a tax shelter. “My favorite definition of a tax shelter is that it is an investment that is worth more after tax than before tax,” he says. “A tax shelter saves the investor tax that would otherwise be paid on consumed amounts or other outside income. A tax shelter has a higher rate of return because Uncle Sam tries to run a tax system than it would have if Uncle Sam let the taxpayer go.
