Today, being an employee in America means paying half of the labor in taxes to the state. In fact, this rate is almost the same all over the world. There are no other tax options for employees. Before the employees receive their salaries, the state receives 24% of it.
The only tax cut that the state provides to employees only makes them more into debt. So, the path to financial freedom for employees or self-employed people is much more difficult.
Accountants tell their wealthy clients that if they buy a more expensive house, they can get more tax cuts. This option makes sense for employees or self-employed people. However, employers or investors often do not heed it.
Tax Reduction May Cause Debt Increase
The income tax rate paid by employers or investors is very low. For this reason, it is much easier to increase the money earned as a company owner or investor.
Employees or self-employed people can only benefit from tax deductions by purchasing a larger house. This doesn’t give a person financial freedom. It only brings more debt.
Buying a more expensive home is not wise for employers and investors. Because for them it’s the same as saying, “Lend me a dollar and I’ll give you fifty cents back.”
World History Full of Resistance to High Taxes
America has a progressive tax system. This means that low-income people pay lower taxes and higher-income people pay higher taxes. However, the system does not work exactly like that. Millionaires and billionaires can be the least taxpayers.
The taxes collected in American history have been protested many times. There have been many rebellions against taxation. The American Revolutionary War (1775–1783) opposed the heavy taxes collected from the British colonies in America. Later, Shays’ Rebellion appeared in 1876, Whiskey Rebellion in 1791, and Fries’s Rebellion in 1799. The reason for all these resistances is taxes.
Not only in America but all over the world, there was resistance to taxes from time to time. There have been more than three hundred and fifty resistance, civil disobedience or uprising against taxes imposed since the 16th century.*
Baby boomers begin retiring. What will happen now?
Especially in our modern world, taxes are needed. Problems arise if taxation is not carried out successfully and the collected taxes are poorly managed.
Baby Boomers are already retiring. Within a few years, millions more of them will retire and will cease to be taxpayers and enjoy social security benefits. This will increase the financial burden of the states considerably. So, in the face of rising taxes, the rich will seek other countries where they can invest their money.
How You Earn Money Determines Your Perspective on Taxes
There was an interview with an investor in the newspaper recently. The investor made a million dollars profit and paid no taxes. Because he was able to delay his tax since the money he earned was a capital gain. He was also exempt from tax when buying and selling real estate because he only exchanged property.
A few days later, I saw elsewhere that this same investor was captioned: “He made a billion dollars and admitted he didn’t pay taxes.”
What is written in this title is actually not a lie. However, at first glance, it makes you think that the investor is evading tax. But the investor did not do anything against the tax law.
This is a good example of the difference in tax perspective of those who make money in different ways.
The truth is that not all income is taxed equally. Some are less taxed and some are not taxed at all.
Those who have gained financial freedom, and especially investors, are familiar with the laws regarding taxes. Thus, it is easier for them to increase their money.
I recommend you to read also these posts:
- MAKE MONEY IN A BETTER WAY
- WHICH PATH ARE YOU MORE INCLINED TO? (EMPLOYEE, SELF-EMPLOYED, EMPLOYER OR INVESTOR)
If you want to read more about taxes and taxation, check out these:
- DON’T BE AFRAID TO INVEST YOUR MONEY
- INTERNATIONAL TRADE AND TRADE BARRIERS
- WHY YOU NEED TO INCREASE YOUR FINANCIAL IQ
- THE ROBIN HOOD IDEAL
- TAXES AND CREDIT DEBTS
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