THE TRUE COST OF TAXES

“Only two things in life are certain, death and taxes.”

This myth costs American taxpayers YEARS of their lives over the course of their careers. The way I see it, it's simple: we have a limited amount of time on this planet. We spend a portion of that time working and delivering value for society, and are rewarded with money. Every hour you spend earning income is an hour of your energy that you didn't spend with friends, family, or doing whatever you enjoy doing most.

And every dollar you pay in taxes represents a portion of your life energy that you gave to a government that isn't going to spend it as well as you would on yourself. That's why I think it's so important that people don't blindly accept the claim that they have to pay a significant portion of their life energy to the government.

We were never taught about the tax code in schools, or in college. I know that I learned a lot about history, geography, and math, but I never learned about why my paycheck had a huge chunk taken out of it before it ever got to me once it started working. That's by design. The government doesn't want you to know how to give them less money. You can't blame them for prioritizing their bank account over your own. All you can do is put yourself first and explore every legal avenue to reduce your taxes and build wealth.

A New Perspective on Taxation

Just consider this example. Meet Joe. Joe is single and earns $100,000 a year as a W2 employee in California. He pays $14,260 in federal income taxes. $5568 in California taxes. $6200 in Social Security taxes. $1450 in Medicare taxes. What Joe has left from his own labor: $72,522.

So far 28% of Joe’s income has been stolen, I mean withheld, for taxes. Joe goes on enjoying his life with the $72,522 left. Every time he buys a pizza. Movie ticket. Car. He pays an 8% sales tax. That’s $5800 a year in sales tax — if he spends all of the $72,522.

We haven’t even considered Property taxes (~1%) Estate taxes (18-40%) Capital gains taxes (up to 37%) Or, the greatest silent tax of all, inflation. Every year the US Government inflicts a 12-15% inflation tax on holders of the US Dollar by printing more dollars or issuing them electronically. The more dollars in circulation, the less value each dollar has, and the more you have to earn just to stay afloat.

Joe hasn’t saved a dime in his own retirement account or built any wealth for his children. But the US Government got paid before his family did. The true taxation rate in the US is closer to 50%.

Your Money or Your Life

It's pretty simple. If you work for 40 years and these various forms of taxation take about 50% of the wealth you created for yourself, you've given 20 years of your life away one bit at a time. Life is too fleeting and valuable to accept these terms.

Our society depends on us supporting each other. I didn't get into this business because I wanted people to freeload or cut others short. I got into this business because when my clients save a significant portion of their income and build wealth, I wholeheartedly believe they will deploy that wealth to create more utility and value than the US Government. Optimizing your taxes isn't about shortchanging society. It's about helping society even more than you already are by maximizing your available resources.

The Internal Revenue Code (IRC) is incredibly long. There's thousands of pages that outline the conditions for Americans to pay taxes. What that means is there's plenty of ways to creatively -- and proactively -- lower your taxable income and keep more of what you earn.

If you're one of the lucky few that enjoys what you do, as I am, then work isn't some monstrous negative in your life. But you still deserve to benefit from as much of your life energy as possible.

Don’t accept the myth that taxes are certain. Learn tax laws. Or hire an expert to help you build wealth for yourself, your children, and your grandchildren. Your freedom depends on it.