Taxing The Rich...Is That Even Possible?
"If money go before, all ways do lie open" - William Shakespeare
Robin Hood and his team of merry bandits led the way of robbing the rich to pay the poor in the notorious Sherwood Forrest of Nottingham, England. He was a hero in many eyes of the poverty-stricken villagers of that era, but he too fatally met his demise when he fell ill. Back then, physicians would 'bleed out' the sick to restore them back to good health, but this time a little too much blood was taken. It is reported that Sir Roger of Doncaster stabs him when he is too weak in revenge for Robin's family inheriting his land and title. However, in this story, Robin Hood gets the last say as he mortally wounds Sir Roger prior to his own death. This is such a good story that it has not only to be foretold for generations to come but even the politicians use it to rally for support of the larger sectors of poor and middle class aiming that they can too be their hero.
Their statement of 'we must tax the rich' plagues bad sentiment for the folk that has made their fortunes and has been of much discussion on how to free up more money in our economy. But this thinking and attempts have only led to turning the tables and again the poor and middle classes end up footing the bill. Why is this so? You see, the rich play by a different set of rules. Where they see gaps they have the means to turn those gaps into profitable opportunities. They have fortune on their side where they can hire the elite performing lawyers and accountants to find ways to reduce the tax they end up paying. Another reason is that they own their assets and leverage deals where they are not the end recipient that ends up paying the taxes. The taxing code is uplifting for the rich who can help stimulate the economy by adding employment and controlling the wealth.
Let's look at who really does pay the tax.
Employees get the highest rate of tax as they are the end of the line. Limited deductions and controlled earning.
Then the Small Businesses owners generally bought themselves a job and that means no time to micromanage their businesses and no excesses of money to hire consultants to fast-track their wealth.
Next is the Big Businesses who have more cash flow and can take advantage of leveraging their staff, attaining advice from consultants and utilising strategies to lower their taxes.
Lastly is the Investors who control the deals and escape the larger portions of taxing as they directly do not own the asset. They utilise partnerships and collaborative efforts to avoid loans and getting into grey areas where taxing is higher. They use strategies to make their owned assets cashflow positive and they protect themselves through lawful entities allowing them access to all the business qualified deductions to lower their tax bills.
So, before jumping on the band-wagon of demanding that the rich pay more tax and siding with your politician, remember where you fall in the position of the economy. Will this hurt you or help you? Maybe, look at ways to upskill and evolve so you too can play like the big players, having more resources and the ability to lawfully reduce your tax bills and pass on 'costs' in building your own wealth.
Meg Hogan is an Amazon #1 Best Selling author in Australia and US for 'Get Rich Be The Voice' and a Business Coach helping owners maximise their business potential to be in the best possible position to reap more revenue and retain more personal wealth. With her 100% money-back guarantee of satisfaction, she gives certainty to her clients that their best interests are at heart. "My door is open or anyone who may wish to discuss their business challenges in hopes of finding some practical solutions. Book a free call to chat on what I can offer you, and walk away with at least 3 things you can do now to improve your situation."
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