Why you should do what you can to reduce your tax bill

From Sovereign Man, by Simon Black

On the plane ride back to Chile last night, I was sitting next to a particularly chatty woman who wanted to know my whole life story and what I was doing in Mexico.

I played along and explained to her that I had been on a cruise for the past week speaking at an investment conference.

“Oooooooh,” she said, and then inquired what I had been speaking about.

That’s when the conversation became just a little bit uncomfortable.

I walked her through the big picture, explaining how the US government is totally bankrupt, that Social Security is running out of money, and that the Federal Reserve is rapidly engineering its own insolvency.

That didn’t seem to be the idle chit-chat she was looking for.

Then I told her how we educate people about ways to distance themselves from the consequences, and how to make better investments that generate strong returns while taking minimal risk.

Things became really unglued when I arrived to the topic of taxation.

“The highest return on investment you’ll ever make,” I told her, “is taking legal steps to reduce your taxes.”

She looked dumbfounded.

“Think about it; cutting your tax is like boosting your investment return by 10%, 20%, or more, without taking on any risk. You’ll never generate that kind of return so easily anywhere else.”

Then, as expected, she exploded with the usual brainwashed, vitriolic disgust, accusing me of being ‘unpatriotic’ because I take legal steps to slash my tax bill.

I’ll never understand this close-minded mentality.

It’s not exactly a controversial statement to suggest that governments waste an unbelievable amount of money.

In the Land of the Free, for example, the federal government’s National Institutes of Health wasted millions of dollars taxpayer funds a few years ago to study monkeys and mountain lions running on treadmills.

Then there was the $1 billion that the US military spent to destroy $16 billion worth of perfectly good ammunition.

And of course the $2 billion Obamacare website fiasco.

There are countless other examples, it just never stops.

They’ve spent billions of dollars to wage wars, invade other nations, and pay for drone strikes that ‘accidentally’ destroyed schools and children’s hospitals.

The reality is that there’s very little you can do about this.

We’re taught in our government-controlled education system that when we disagree with the decisions that our politicians make, we’re supposed to go down to the polling station and vote for change.

This seldom produces any significant results.

In truth your vote has precisely zero influence over the national agenda. But what you do have total control over are your own actions and finances.

If you have misgivings about how the government squanders your money, you’ll be a lot better off reducing the amount that you pay them.

I fail to see how ‘patriotism’ has anything to do with this.

Does anyone seriously believe that ‘patriotism’ is defined by the amount of money you throw into a failing system?

Or that it’s somehow ‘unpatriotic’ to follow the law and take legal steps to reduce what you owe?

Are people being unpatriotic when they maximize their IRA contributions or shop in a duty-free store?

Cutting your tax bill is a sensible thing to do.

Rather than continue to finance wars, debt, body scanners, and drone strikes, you can put that money to work in a way that actually benefits yourself, your family, and anyone else you choose.

Each year I put my tax savings to work in a variety of productive ways.

I’ve financed the recovery of a village in Nepal that was devastated by an earthquake.

I paid more than $70,000 to fund an experimental surgery for a disabled veteran who lost his leg in Afghanistan.

(As a result of the procedure he was able to dance at his wedding and has participated in a 5k race.)

I’m currently putting a promising young orphan through school.

And I co-founded and regularly fund a charity that provides entrepreneurship education for young people each year.

All of these things are possible because I’ve applied perfectly legitimate provisions in the tax code to reduce the amount that I owe.

So instead of my money going to pay for more war and waste, the funds are put to much better use where I can see real, tangible, positive results in people’s lives.

Every situation is different.

If you’re an investor who lives off capital gains and dividend income, there are certain ways to reduce what you owe (consider Act 22 in Puerto Rico…)

If you have an online business, you could set up a properly-structured foreign company to indefinitely defer your corporate profits tax.

If you have a brick-and-mortar business, you could establish a captive insurance company which could save you literally millions in tax.

And just about -everyone- can maximize contributions to an IRA or 401(k), especially if you establish a more flexible structure.

Bottom line, whatever your situation, there are always plenty of legal options to reduce what you owe… and hence put that savings to work in far more beneficial ways.



Categories: Economy

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