Because There Can Be More To The Good Life, A Higher Level, A More Abundant Life -
From Mere Wealth To Prosperity
Wealth preserving economic insights make living the best of the good life prudent wealth management
SUCCESS SECRETS OF THE SUPER RICH
Ensuring generational prosperity during political and economic uncertainty
Or
How to go"green" in "America's new golden age of Trump!
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Changes are certainly on the way. Some welcome, some maybe not so much. Consequently, many are likely to find themselves in uncharted waters - figuratively and literally.
It's often said change is the only constant and the more things change, the more they stay the same. That's certainly true when it comes to the success secrets of the super rich.
To live like the super rich-to get the most from the yachting lifestyle, and all the best the good life has to offer - you must change what you've been doing and do what the super rich do.
The easiest, quickest, and surest way to achieve the desired lifestyle changes you seek begins by changing how you pay taxes. You have to start paying taxes like the super rich.
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According to a White House study, the wealthiest 400 billionaire families in the U.S. paid an average federal individual tax rate of just 8.2 percent.
In 2021 ProPublica and Forbes reported that the wealthiest average only about a 3.7% annual tax rate with some of the wealthiest: Jeff Bezos, Elon Musk, Michael Bloomberg, Carl Icahn, George Soros, Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg often paying no tax at all.
Such real world examples of multiple years of similar tax savings and compounding investments confirms recent research & secret of the super-rich: taxes can have 10 times greater influence over long term wealth accumulation then actual asset allocations or investments.
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So what's your combined federal & state tax rate? Are you paying tax rates like the ultra-rich? If not- why not?
After minimizing taxes, the use of strategic debt -or as they say, other people's money (OPM) - is a common complementary wealth building strategy. This includes borrowing against assets instead of selling since loan proceeds are not taxed.
Then invest in alternative assets to consistently provide superior risk adjusted returns.
CHANGES ARE COMING. WILL YOU BE PREPARED? HOW'S THIS TO START?
Effective tax rates less than 5%.
Historical U S Government ROI:
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100% ROI in 1 year,
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1200% ROI over 10 years,
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Backed by the full resources of the United States government.
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Are you ready for the opportunities and potential risks from all the changes?
Nothing against your current current advisers, but nobody knows everything, especially in such a rapidly changing environment. If they knew about these opportunities - surely they would have told you already - wouldn't they?
Perhaps your team could be missing something?
It's hard enough for advisors to keep up with changes in their own discipline, but less with complimentary disciplines. A rapidly expanding, ever changing tax code, legal and regulatory environment increasingly requires specialization. With more sophisticated business and financial activities, it's likely more simply falls through the cracks and is overlooked.
"To be fair to tax preparers everywhere, there is far more in the Internal Revenue Code (IRC) than any one person could ever know, which is part of why CPAs are required
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in most states to obtain more continuing education credits than almost any other professional designation. The past six years have seen unprecedented increases in tax law complexity, and quite frankly — it’s hard to keep it all straight. So if you’re concerned your tax preparer is missing something, please approach the matter with respect and deference, and do not judge too harshly if they happen to have missed something. "
Everyone believes they have good tax advisors, but how do you know? Few ever get a second opinion until it's too late. Professional reputation, certifications, degrees, or the amount of the fees charged are no guarantee.
For example, one of the reasons so many professional athletes go broke (80%) only three years after they stop playing is they continue to needlessly pay more then 50% in taxes. Along with substantial advisory fees not tied to performance.
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It's not surprising then that the wealthiest tend to overpay the most.
​On it's face, it seems especially unjust that it's the client tax payers and not the paid tax and advisory professionals that bear the economic burdens and legal liabilities of any errors or oversights.
The United States General Accounting Office (GAO) estimates 60% - 90% of all tax returns prepared by tax professionals contain errors.
ARE YOU OVERPAYING YOUR TAXES? WHY WOULD YOU CONTINUE?
In 2019, GAO told Congress the tax code complexity results in both under-payment & over-payment of taxes. A GAO study of paid tax professionals (CPAs) revealed:
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only ten percent (10%) prepared tax returns correctly, per tax law & error free,
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thirty-seven percent (37%) "made errors with substantial tax consequences".
Of course that's better than prior studies where not one CPA was correct and the range of tax liabilities between the highest and lowest was 100% or twice as much.
Such professional errors and oversights have significant real world consequences for most. For many they are potentially life changing.
Of course that's better than prior studies where not one CPA was correct and the range of tax liabilities between the highest and lowest was 100% or twice as much.
Congress estimates over half of all taxpayers overpay their taxes by not taking advantage of available tax provisions.
89% of taxpayers that overpay their taxes use “professional” fee paid tax preparers such as CPA’s.
The Treasury Inspector General for Tax Administration reports less than half of taxpayers take advantage of the available income tax provisions finding that:
• paid tax preparers didn’t know about key changes in the tax code,
• didn’t think their clients would benefit, or
• used preparation software that led them to believe there would be no benefit.
It's worse for high income earners. Consider these IRS examples.
It’s worse for high income earners. The latest available data from the IRS reports that for those earning over $400,000, less than ¼ of 1% take full advantage of all available deductions and tax code provisions.
For example, as of September 2022, the IRS’ W-4 Tax Withholding Estimator on the IRS website, confirms an employee earning $1,000,000 of ordinary W-2 income, can with proper planning, only owe about $25,000.
That’s a 2.5% tax rate on $1,000,000 of ordinary income.
Those earning less than $1,000,000 could owe even less – if anything.
The IRS also confirms even someone earning $25,000,000 in ordinary W-2 income, a professional athlete or corporate executive for example, can with the proper planning owe as little as $1.1 million. That’s a tax rate of only about 4.5%.
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That’s a single year tax saving of about $8,000,000.
What makes this especially troubling is that is a tax over-payment year after year.
And not just the actual tax over-payment, but the opportunity cost of what those tax over-payments could have become if prudently invested over time.
For example, just a $23,000 tax saving can easily become over $840,000 in just a few years in the public stock market.
How much more could the tax savings become when prudently invested in more high yielding alternative investments?
So, with the prevalence of error filled tax returns prepared by leading tax professionals, what are the chances something might be amiss or lacking with your taxes?
For example:
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How would you really know?
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How much is it costing you?
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Ever had a second tax opinion?
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What would an IRS audit reveal?
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What are the odds the IRS is targeting you?
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Did you owe any federal tax in 2020 or 2021?
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Did you know it may have been unnecessary?
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Are you taking deductions for unprofitable activities?
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What's the cost: over payment of taxes, lost investments and possible legal exposure?
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What else are they not telling you, overlooking or allowing to fall through the cracks? How long has this gone on?
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Did you know of covid IRS provisions eliminating federal taxes? Regardless of the sum or source of income? Why not?
There's 'A Yacht' To Lose By Under And Over Paying Taxes
Unfortunately, the significant over payment of taxes is a common problem. It's the secret few CPA's or public officials want to discuss.
The opposite of the tax gap, but just as large a problem, tax payer over payment is called the reverse tax gap.
Former Chairman of the House Ways and Means Committee. U. S. Congressman Kevin Brady cited the policy paper number 130 "Experts Agree They Can’t Agree on Tax Bills", "For many years, annual test of tax preparers for a hypothetical household proved that paid professionals often make huge mistakes."
In the last year the test was administered , no two CPAs reached the same conclusions, and none got it right.
The tax professional who directed the test admitted “that his computation is not the only possible correct answer” since the tax law is so murky. For just a minimal simple family tax return, the subject tax liability varied by a range of more than 100% from the lowest to the highest. It makes one wonder about the variance in complex tax returns.
The policy paper also reports that the situation has not improved in recent years but has probably worsened.
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“That’s a real shame.
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Congress enacts a tax benefit with the intention of every eligible person taking advantage of that benefit.
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I’m very concerned that tens of thousands of taxpayers aren’t taking advantage of the available tax provisions.
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Even worse, a lot of paid tax preparers were in the dark.
There’s no point in paying somebody to do your taxes if those folks don’t do you any good.”
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Charles Grassley U. S Senator & President Pro Tempore
OVERPAYING YOUR TAXES - WHAT'S THE REAL COST?
With the prevalence of error filled tax returns prepared by leading tax professionals, what are the chances something might be amiss, lacking, or overlooked regarding your taxes?
How much is it really costing you?
And much is it costing others?
How would you really know?
It's likely costing you more than you will ever know. (Render unto Caesar, that which is Caesar’s, unto God, that which is God’s. Mark 12:17)
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For example, what's your time worth?
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There are only 24 hours in a day. Regardless of one's net worth - we are all time poor.
Perhaps your tax savings would enable more travel or more luxurious private jet travel.
"There are two kinds of people in the world; those that fly private, and those who would if they could." Bill Maher
As for how much your overpaying your taxes may be costing others... it's impossible to really know.
But we can make an educated guess.
Consider an example where someone could reduce their combined federal and state taxes from 50% to a total of 5%.
What good might you do if you could reduce your taxes by 95%?
Also to be included in that calculation must be what good not overpaying your taxes are for the good of the country and benefit of society.
Raising taxes to fund the government is just part of the purpose of the Federal Tax Code.
An equal if not more important purpose is to encourage economic activity by the individual citizens for the common benefit of society and to reduce the obligations of the federal government.
That's why there are tax incentives and deductions to spur private sector job creation, economic development, and charity.
From the government's perspective, it's just as undesirable for citizens to under pay any taxes owed as it is to overpay taxes that are not owed that could have otherwise been put to more productive and efficient application in the private sector.
The true patriot pays all taxes legally required yet no more, but also endeavors as his right and responsibility as a citizen to comply with the government programs for the common good as much as is practicable to pay the least tax allowed by law.
Precious few that seek to enjoy the best that the yachting lifestyle can offer have anyone on their current team of advisors capable and qualified of stewarding such alternative investments– or an advisor sufficiently confident in their abilities and willing to link their compensation to successful performance and achievement of goals.
If you had a uniquely qualified, competent and experienced advisor – that acted almost like a partner – charged with protecting and preserving your net worth, whose long term interest was tied to yours, whose compensation was largely determined by successfully achieving your objectives, and had a strong monetary incentive to assure that your yachting lifestyle was both economically and environmentally sustainable, what could you accomplish, what could you achieve with another set of eyes from a different perspective?
That if your current advisors knew, surely they'd have told you already- wouldn't they?