Suppose you have a trading model that generates 100% gain per year. without profit tax, after 5 years, your total gain is 2^5=32 times; but if you pay tax, let's say, it is 50%, after 5 years, the total gain is 1.5^5=7.59. You can see after 5 years, without tax, you make 4 times more money, and such compounding is the beauty of the financial field. I believe if you can defer the tax such as in 401k or Roth IRA, eventually you pay more money to the government. the question is, how to save the tax legally? I am not a citizen of USA, but hold a green card. any other ways to avoid the tax legally such as starting up a offshore hedge fund and move to overseas? if the trading is taken place in USA, does the law require to pay the tax anyway?