Do you want a fair income tax policy in America? So do I! I wrote this post on July 28, 2010 when I was working crazy hours. My hope was to make big bucks and be free sooner, than later. The potential to pay more taxes was disheartening.
Let's review what was going on back then. Let's also discuss how we should proceed w/ President Biden planning to raise taxes on households making over $400,000 a year. Man, I was really frustrated back then. But not any longer!
The Ultimate Solution For A Fair Income Tax Policy
With the Bush tax cuts set to expire next year, there's going to be a big debate during the mid-term elections this November! But, should there really even be a tax debate? It's obvious that we should NOT raise taxes on small business owners and higher income, hard working Americans in a nascent economic recovery!
Everybody knows roughly 47% of Americans pay no federal income taxes. Hence, the ultimate solution for tax legislation is to strip away tax voting rights for the 47% of Americans who pay no tax! Seems fair no? They still get to enjoy the benefits of other people's contributions.
If you're one of the 100+ million Americans who pay no income tax, isn't it good enough to enjoy free public schooling, nice roads, friendly firemen and police officers protecting your neighborhood? Being thankful is a great disposition to have. Being greedy is not.
An Example Of A Family Making $120,000 Paying No Taxes:
“Say you’re married with salary income of $120,000, 401(k) contributions of $12,000, two under-age-17 kids, and a college student with $4,000 in education expenses. Assume you also bought a home this year that qualifies for the now-defunct $6,500 credit for existing homeowners. Finally, assume you’re eligible for the $1,500 credit for energy-efficient home improvements. Believe it or not, your 2010 federal income tax bill will be zero even if you only claim the standard deduction.
Your tax bill of $11,950 is completely wiped out by $13,300 in credits ($2,000 child credit, $2,500 education credit, $6,500 home buyer credit, $1,500 credit for energy-efficient improvements, and the $800 Making Work Pay credit).
In fact, you’ll get a $1,350 check from the government. Some of your credits are refundable ($13,300 of credits – $11,950 of tax = $1,350 of free money),” writes Bill Bischoff of SmartMoney.
VOTING TO RAISE TAXES ON OTHERS WHEN YOU PAY NO TAXES IS LIKE……..
If you vote to raise other people's taxes, please pay more yourself. Otherwise, it's like:
* Dr. Phil writing a book and telling someone to lose weight.
* Suzie Orman telling you to invest in the stock market when only 2% of her wealth is invested in equities.
* A recent college graduate teaching you how to be rich.
* A hardcore vegetarian who wears leather shoes.
* A priest who preaches acceptance but expects you to burn in hell when Armageddon comes if you don't convert.
* The United States implementing economic sanctions against emerging countries for polluting.
* A boss who tells you to work hard but goes and plays golf every other day and takes long lunches.
* US Treasury Secretary Geithner saying raising taxes is “the right thing to do” but cheats on his own taxes.
A Fair Income Tax Policy Is All We Ever Want
Some may argue that voting is a fundamental right as decreed by the 15th amendment of the Constitution. I agree, go ahead and vote on whether the government should implement a flat tax on those who pay nothing. It's only fair. Just don't go around pretending as a non tax payer, you have the right to vote on persecuting others to pay for your own free government benefits.
It's so obvious to any rational person that if you pay no taxes, you can't possibly be able to vote for people whose agenda it is to raise taxes on others. Yet, millions of non tax paying Americans continue to support tax increases for the rich, who may very well be the ones who help keep the millions who don't pay taxes employed!
Friendly Americans who pay no taxes, please have a heart and enjoy your spoils and stop punishing others further. For the 53% of Americans who do pay taxes, let us decide what is the right level of income taxation to help support the economy and you guys. We might vote to raise our own taxes and dis-incentivize ourselves to work hard. So be it. At least we get to vote on our own destiny! Thanks!
Track Your Net Worth For Free
The other action item wealthy people do is track their net worth. You can only truly optimize your wealth if you know where all your money is going! Sign up for Personal Capital, the web's #1 free wealth management tool to get a better handle on your finances. I've been using them since 2012 and have made much wiser financial decisions since. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.
After you link all your accounts, use their Retirement Planning calculator that pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. Input various expense and income variables to see how you stand. Your goal should be to get to a 90% probability of achieving your goal. Try it out yourself for free. Your future is too important not to take it seriously. You don't want to end up old and not have enough money because there is no rewind button!
Tax Savings Recommendation
Start A Business. We might never get a fair income tax policy. As a result, starting a business is one of the best ways to shield your income from more taxes. You can either incorporate as an LLC, S-Corp, or simply be a Sole Proprietor (no incorporating necessary, just be a consultant and file a schedule C).
Every business person can start a Self-Employed 401k where you can contribute up to $54,000 ($18,000 from you and ~20% of operating profits). All your business-related expenses are tax deductible as well. Simply launch your own website like this one in under 30 minutes to legitimize your business. Here's my step-by-step guide to starting your own website.