1 00:00:13,640 --> 00:00:17,360 Speaker 1: Hey everyone, welcome to another episode of the Market Disruptors Show. Today, 2 00:00:17,440 --> 00:00:19,760 Speaker 1: I am sitting down with Jeff Soha. He is the 3 00:00:19,760 --> 00:00:23,560 Speaker 1: CEO and the founder of ARC Financial. Arc Financial does 4 00:00:23,680 --> 00:00:26,880 Speaker 1: tax strategy and basically figures out how to make you 5 00:00:26,920 --> 00:00:29,960 Speaker 1: more money by having to send less to your partner 6 00:00:29,960 --> 00:00:32,360 Speaker 1: at the government. Um So, anyway, um, I've known Jeff 7 00:00:32,400 --> 00:00:34,279 Speaker 1: for a while. We've talked a lot about taxes, which 8 00:00:34,400 --> 00:00:38,000 Speaker 1: is a boring but yet exciting subject. I'm excited to 9 00:00:38,080 --> 00:00:39,800 Speaker 1: jump in with you today. Yeah, thanks so much for 10 00:00:39,880 --> 00:00:42,880 Speaker 1: joining us. Hey, mart, thanks for having me on today. 11 00:00:42,960 --> 00:00:46,760 Speaker 1: It's a real pleasure. Yeah. So, you know, taxes is 12 00:00:46,800 --> 00:00:49,920 Speaker 1: a horrible subject to talk about, but I actually think 13 00:00:49,960 --> 00:00:51,599 Speaker 1: it's a It's a good subject talk about, and it's 14 00:00:51,600 --> 00:00:54,520 Speaker 1: definitely a worthwhile one, and we've had many conversations about it. 15 00:00:54,760 --> 00:00:56,639 Speaker 1: So I'm excited to have you on. But for those 16 00:00:56,720 --> 00:00:58,160 Speaker 1: that don't know who you are, just give us a 17 00:00:58,160 --> 00:01:00,120 Speaker 1: little bit of a background on kind of what you 18 00:01:00,160 --> 00:01:01,760 Speaker 1: do with tax strategy and kind of what you're doing 19 00:01:01,840 --> 00:01:06,280 Speaker 1: right now. Yeah. Sure, So, I'm not sure how much 20 00:01:06,280 --> 00:01:08,400 Speaker 1: of the bio you want, So the quick rundown is 21 00:01:08,440 --> 00:01:11,040 Speaker 1: just that I grew up in a third generation, family 22 00:01:11,080 --> 00:01:13,920 Speaker 1: owned business where I heard taxes complained about a lot, 23 00:01:14,480 --> 00:01:17,600 Speaker 1: and I had an opportunity to lobby for a couple 24 00:01:17,640 --> 00:01:22,960 Speaker 1: of political action committees on tax legislation, and then, uh, 25 00:01:23,000 --> 00:01:25,280 Speaker 1: you know, of course started this firm and and went 26 00:01:25,319 --> 00:01:28,920 Speaker 1: to business school at Harvard, and I have just really 27 00:01:28,959 --> 00:01:32,560 Speaker 1: wanted to try to drive value to people where they 28 00:01:32,560 --> 00:01:36,199 Speaker 1: don't have to pay more than they have to. I mean, um, 29 00:01:36,240 --> 00:01:39,800 Speaker 1: there's enough financial challenges and hurdles and us accomplishing our goals. 30 00:01:40,200 --> 00:01:43,320 Speaker 1: And uh so you know, how are you going to 31 00:01:43,360 --> 00:01:46,440 Speaker 1: accomplish your financial goals. You've got to maximize your income 32 00:01:46,480 --> 00:01:49,720 Speaker 1: and minimize your expenses so you create as much wealth 33 00:01:49,760 --> 00:01:53,560 Speaker 1: and and um margin and buffer and discretion as you 34 00:01:53,600 --> 00:01:56,280 Speaker 1: possibly can. And taxes just happened to be one of 35 00:01:56,280 --> 00:02:00,400 Speaker 1: the biggest expenses. And it's complicated and it's confusing. And 36 00:02:00,480 --> 00:02:04,640 Speaker 1: if you're major fortune company and you have, you know, 37 00:02:04,800 --> 00:02:08,919 Speaker 1: big four firm putting a ton of resources into planning 38 00:02:08,919 --> 00:02:11,280 Speaker 1: your taxes, Like I mean, you know, the the Apple 39 00:02:11,400 --> 00:02:15,440 Speaker 1: tax plan that has been praised and scrutinized depending on 40 00:02:15,440 --> 00:02:18,320 Speaker 1: who you are. Uh, that takes a lot of resources 41 00:02:18,360 --> 00:02:20,840 Speaker 1: to come up with something like that. And so for 42 00:02:21,360 --> 00:02:25,960 Speaker 1: the average successful person who is looking for help but 43 00:02:26,080 --> 00:02:29,239 Speaker 1: can't necessarily access the same team that that a company 44 00:02:29,280 --> 00:02:32,240 Speaker 1: like Apple would. Um, that's sort of that's the people 45 00:02:32,240 --> 00:02:35,760 Speaker 1: I want to help. Yeah great, Um, yeah, so much. 46 00:02:36,160 --> 00:02:39,040 Speaker 1: You said something. You said, uh, so they don't have 47 00:02:39,080 --> 00:02:41,760 Speaker 1: to pay more than they have to, And I love 48 00:02:41,840 --> 00:02:43,320 Speaker 1: that and I want to dig into that just for 49 00:02:43,400 --> 00:02:48,239 Speaker 1: a minute. So, um. We hear a lot, especially recently, um, 50 00:02:48,280 --> 00:02:51,200 Speaker 1: that these big corporations, these big rich people whatever, these 51 00:02:51,240 --> 00:02:55,040 Speaker 1: brisy greedy business people, whatever, they don't pay their fair 52 00:02:55,200 --> 00:02:57,360 Speaker 1: share of taxes. But you just said they don't have 53 00:02:57,400 --> 00:02:59,560 Speaker 1: to pay more than they have to. They're saying they 54 00:02:59,600 --> 00:03:03,640 Speaker 1: don't pay their fair share. Where how do you see that? Yeah, 55 00:03:03,680 --> 00:03:06,480 Speaker 1: I mean it's kind of like when talking about Apple 56 00:03:06,600 --> 00:03:10,840 Speaker 1: when Tim Cook had to go, uh testify to Congress 57 00:03:10,880 --> 00:03:14,720 Speaker 1: and they're beating him up over taxes and he said, look, 58 00:03:15,320 --> 00:03:17,839 Speaker 1: the you know, our company is the number one taxpayer 59 00:03:17,840 --> 00:03:22,240 Speaker 1: in the United States at the time, and uh, you know, 60 00:03:22,680 --> 00:03:27,799 Speaker 1: I think fair shares is relative. Um, you know, I 61 00:03:27,800 --> 00:03:31,960 Speaker 1: I think that there's a tax system. There's a lot 62 00:03:32,000 --> 00:03:38,760 Speaker 1: of code, there are options, there are mechanisms, and the 63 00:03:38,800 --> 00:03:44,119 Speaker 1: code incentivize people and uh, utilizing the code to your 64 00:03:44,160 --> 00:03:49,680 Speaker 1: benefit is something that everyone is entitled to do, and 65 00:03:50,080 --> 00:03:53,480 Speaker 1: I think anything beyond paying what you have to for 66 00:03:53,640 --> 00:03:59,760 Speaker 1: the code is just uh no different than charity. Um. 67 00:03:59,800 --> 00:04:02,360 Speaker 1: And if the government is your charity of choice, then 68 00:04:02,480 --> 00:04:05,600 Speaker 1: so be it. But a lot of people I know 69 00:04:05,760 --> 00:04:10,520 Speaker 1: might choose a different charity. So I I think everybody 70 00:04:10,560 --> 00:04:13,440 Speaker 1: that gets scrutinized as long as they're doing it legally. 71 00:04:13,440 --> 00:04:15,520 Speaker 1: I mean, like the people who don't do it legally, 72 00:04:15,600 --> 00:04:18,400 Speaker 1: they have a world of hurt and a world of problems, 73 00:04:18,520 --> 00:04:21,320 Speaker 1: and they're in tax court and they're dealing with real issues. 74 00:04:22,200 --> 00:04:25,640 Speaker 1: But just because you don't like the effective tax rate 75 00:04:25,680 --> 00:04:31,040 Speaker 1: of some uh individual or company, you know, if what 76 00:04:31,080 --> 00:04:33,679 Speaker 1: they're doing is legal, then if you don't like it, 77 00:04:33,800 --> 00:04:36,159 Speaker 1: you know whose fault is that. That's not their fault 78 00:04:36,240 --> 00:04:39,560 Speaker 1: for taking advantage of the code. It's the people that 79 00:04:39,640 --> 00:04:42,320 Speaker 1: wrote the code that you should take your problem up 80 00:04:42,320 --> 00:04:44,760 Speaker 1: with if you want, if you want tax law to 81 00:04:44,800 --> 00:04:47,839 Speaker 1: be different, you know, tax law starts with Congress and 82 00:04:47,839 --> 00:04:51,640 Speaker 1: then it gets regulated by the I R. S. So 83 00:04:53,320 --> 00:04:55,640 Speaker 1: if you want that to look different, it starts with 84 00:04:55,640 --> 00:05:00,880 Speaker 1: with who you vote into Congress. So I don't you know, 85 00:05:00,960 --> 00:05:04,000 Speaker 1: it's like that old saying donate the player hate the game, right, 86 00:05:04,080 --> 00:05:07,240 Speaker 1: So like, if you don't like the rules of the game, well, 87 00:05:07,720 --> 00:05:09,719 Speaker 1: the individuals and the companies are not the ones making 88 00:05:09,760 --> 00:05:14,279 Speaker 1: the rule, so uh, you know, don't donate them for 89 00:05:14,360 --> 00:05:18,200 Speaker 1: not donating to the government. Yeah. Yeah, a couple of 90 00:05:18,200 --> 00:05:20,320 Speaker 1: things in there. Uh. Well, first of all, for everybody 91 00:05:20,320 --> 00:05:23,120 Speaker 1: who's listening, Um, we're gonna get to some pretty juicy 92 00:05:23,120 --> 00:05:24,840 Speaker 1: stuff that I'm sure you're gonna want to hear about. Um, 93 00:05:24,839 --> 00:05:27,320 Speaker 1: we're gonna dig into Amazon and Bezos how they're not 94 00:05:27,360 --> 00:05:29,839 Speaker 1: paying taxes. We're gonna dig into a little bit of 95 00:05:29,880 --> 00:05:32,080 Speaker 1: the Trump tax returns that just came out and talk 96 00:05:32,160 --> 00:05:35,080 Speaker 1: about that. We're gonna talk about Biden and then versus 97 00:05:35,080 --> 00:05:37,760 Speaker 1: Trump tax policy what that might mean in this election. 98 00:05:38,120 --> 00:05:41,640 Speaker 1: And maybe you need to be selling some assets right now. Uh. 99 00:05:41,680 --> 00:05:44,360 Speaker 1: And then I'm gonna have Jeff give us some advice 100 00:05:44,400 --> 00:05:46,800 Speaker 1: on how we can save some money on taxes, whether 101 00:05:46,800 --> 00:05:48,719 Speaker 1: you're business or self employed. So just make sure you 102 00:05:48,720 --> 00:05:50,919 Speaker 1: stay tuned for all that. But back into what you 103 00:05:51,000 --> 00:05:55,080 Speaker 1: just said here, you talked about one thing you said, Um, 104 00:05:55,200 --> 00:05:56,560 Speaker 1: first of all is that you don't have to pay 105 00:05:56,600 --> 00:05:58,080 Speaker 1: any more than you have to. And I love the 106 00:05:58,120 --> 00:06:01,000 Speaker 1: fact that, like, anybody's more than welcome to pay more 107 00:06:01,040 --> 00:06:03,279 Speaker 1: taxes if they want, so you said, if they don't 108 00:06:03,400 --> 00:06:06,560 Speaker 1: like the policy, they can of course change it, but 109 00:06:06,640 --> 00:06:10,320 Speaker 1: they could also just pay more as well. Right, Yeah, 110 00:06:10,360 --> 00:06:12,440 Speaker 1: so there's that, And then you also said you're also 111 00:06:12,560 --> 00:06:13,840 Speaker 1: one other thing that I want to ask you about. 112 00:06:13,839 --> 00:06:17,640 Speaker 1: You said, take advantage of the code. And so I 113 00:06:17,680 --> 00:06:20,400 Speaker 1: think a lot of people see that as like, oh, 114 00:06:20,480 --> 00:06:24,560 Speaker 1: they're taking advantage, they're using what they say, loopholes, they're 115 00:06:24,600 --> 00:06:28,040 Speaker 1: finding legal ways to not pay through the loopholes, or 116 00:06:28,040 --> 00:06:30,960 Speaker 1: they're taking advantage. But I don't really see it that way. 117 00:06:31,080 --> 00:06:32,839 Speaker 1: Do you see it that way? Or is there a 118 00:06:32,839 --> 00:06:36,840 Speaker 1: different way to frame that? So maybe we should talk 119 00:06:36,839 --> 00:06:41,359 Speaker 1: about a law that's not tax as an example, you know, 120 00:06:41,880 --> 00:06:45,640 Speaker 1: if um, you know a lot of the highways in 121 00:06:45,800 --> 00:06:51,400 Speaker 1: Texas have seventy speed limits. So if I want to 122 00:06:51,520 --> 00:06:54,760 Speaker 1: drive and set my cruise control at seventy five hour 123 00:06:54,960 --> 00:06:57,559 Speaker 1: so that I can get from where wherever I'm going 124 00:06:57,800 --> 00:07:02,760 Speaker 1: is as fast as the law allows me, Um, is 125 00:07:02,760 --> 00:07:05,960 Speaker 1: there anything wrong in doing that versus driving seventy or 126 00:07:06,000 --> 00:07:09,680 Speaker 1: sixty five and saying, well, if you drove fifty five, Jeff, 127 00:07:09,680 --> 00:07:13,680 Speaker 1: it might be safer. Um, the wall says I can 128 00:07:13,760 --> 00:07:17,280 Speaker 1: drive seventy five, So why would I not drive seventy 129 00:07:18,040 --> 00:07:20,800 Speaker 1: if I want to? Right now? If I drove a 130 00:07:20,920 --> 00:07:22,600 Speaker 1: d and you had a problem with it? Okay, that 131 00:07:23,040 --> 00:07:26,200 Speaker 1: and I understand, you know there's a regulation there for 132 00:07:26,240 --> 00:07:31,200 Speaker 1: a reason. But um, for someone to get upset because you're, 133 00:07:31,960 --> 00:07:37,200 Speaker 1: you know, maximizing the law to your benefit. Who doesn't 134 00:07:37,240 --> 00:07:40,080 Speaker 1: do that? We we all do that, right. Yeah, that's 135 00:07:40,080 --> 00:07:41,800 Speaker 1: a good way to look at it. I love to 136 00:07:41,800 --> 00:07:44,400 Speaker 1: put things in different perspective that helps out. I've also 137 00:07:44,440 --> 00:07:47,160 Speaker 1: kind of looked at it as like the government. I've 138 00:07:47,200 --> 00:07:50,040 Speaker 1: often said, I've tweeted this that the government cannot give 139 00:07:50,360 --> 00:07:53,720 Speaker 1: something that has not taken. So the government doesn't produce, 140 00:07:53,800 --> 00:07:57,240 Speaker 1: they redistribute. Right, So the government has a set of 141 00:07:57,640 --> 00:08:00,520 Speaker 1: policies that they want to push, whether that's full of employment, 142 00:08:00,720 --> 00:08:04,640 Speaker 1: whether that's housing, and so they can't do that, they 143 00:08:04,680 --> 00:08:08,120 Speaker 1: can't make full unemployment, they can't provide housing. So they 144 00:08:08,120 --> 00:08:11,040 Speaker 1: need people to do that, and so they a new 145 00:08:11,080 --> 00:08:14,960 Speaker 1: administration has this policy or and then they use tax 146 00:08:15,040 --> 00:08:17,800 Speaker 1: policy to help incentivize people to do that. Would that 147 00:08:17,840 --> 00:08:20,000 Speaker 1: be the right way to look at that. Yeah, if 148 00:08:20,040 --> 00:08:25,920 Speaker 1: you think about it domestically. Our government has two mechanisms 149 00:08:26,080 --> 00:08:31,640 Speaker 1: for influencing what we do. They have taxes and they 150 00:08:31,640 --> 00:08:37,199 Speaker 1: have prison. So okay, the carrot and the stick. Yeah, exactly. 151 00:08:37,800 --> 00:08:40,920 Speaker 1: So prison is there for the things they don't want 152 00:08:40,960 --> 00:08:44,200 Speaker 1: you to do. If you if you break certain rules, 153 00:08:44,559 --> 00:08:49,600 Speaker 1: the penalty is prison. Right, So taxes are actually used 154 00:08:49,679 --> 00:08:52,720 Speaker 1: as an incentive to get you to do things. Prison 155 00:08:52,840 --> 00:08:56,560 Speaker 1: is used to get you to not do things. So 156 00:08:56,640 --> 00:08:59,839 Speaker 1: taxes aren't necessarily there to say don't like you know, 157 00:09:00,000 --> 00:09:02,840 Speaker 1: you don't have an income tax to say don't produce 158 00:09:02,840 --> 00:09:07,320 Speaker 1: an income. So when you have a benefit, like you 159 00:09:07,360 --> 00:09:11,079 Speaker 1: can take very basic um part of the tax code 160 00:09:11,080 --> 00:09:14,600 Speaker 1: that says, hey, if you hire an employee, the money 161 00:09:14,640 --> 00:09:17,440 Speaker 1: that you pay the employee you can deduct from the 162 00:09:17,480 --> 00:09:20,320 Speaker 1: revenue as an expense and you don't have to pay 163 00:09:20,360 --> 00:09:25,880 Speaker 1: taxes on the revenue spent on employees. Well, the incentive 164 00:09:25,920 --> 00:09:33,520 Speaker 1: there is go higher employees. Right. So, um, if you 165 00:09:33,840 --> 00:09:37,600 Speaker 1: go and buy real estate to provide a place for 166 00:09:37,679 --> 00:09:40,880 Speaker 1: work or housing, and the government says, hey, we're gonna 167 00:09:40,960 --> 00:09:45,120 Speaker 1: give you right offs for that real estate. Uh, they're saying, 168 00:09:45,200 --> 00:09:51,600 Speaker 1: please go build or buy provide real estate for housing 169 00:09:51,640 --> 00:09:57,000 Speaker 1: and work. Right. So uh you know, I mean, let's 170 00:09:57,040 --> 00:10:01,000 Speaker 1: just talk about one tax deduction that imagine COVID will 171 00:10:01,040 --> 00:10:05,600 Speaker 1: probably change forever. The red flag that so many people 172 00:10:05,679 --> 00:10:08,439 Speaker 1: talk about. I can't tell you how many times I've 173 00:10:08,480 --> 00:10:11,199 Speaker 1: heard of c p A or somebody say, oh, the 174 00:10:11,200 --> 00:10:16,280 Speaker 1: home office deduction is a red flag. Well think about it, COVID, Like, 175 00:10:16,760 --> 00:10:19,520 Speaker 1: how many people are working from home? Like, who's not 176 00:10:19,559 --> 00:10:22,960 Speaker 1: going to claim the home office deduction this year? Right? Like? 177 00:10:23,280 --> 00:10:26,880 Speaker 1: Why would anyone? I mean, everybody's been working from home 178 00:10:26,920 --> 00:10:29,760 Speaker 1: for the most part, at least as some extent. So 179 00:10:30,280 --> 00:10:33,600 Speaker 1: even if you're, you know, regardless of your employment status, 180 00:10:33,600 --> 00:10:35,400 Speaker 1: if you're working from home, what you're you're not gonna 181 00:10:35,440 --> 00:10:39,319 Speaker 1: take it because why because you didn't take it last year? 182 00:10:39,440 --> 00:10:43,720 Speaker 1: Because uh, you know, I don't know. So I think 183 00:10:43,760 --> 00:10:47,640 Speaker 1: for anybody wants to necessarily complain about the code and 184 00:10:47,720 --> 00:10:52,239 Speaker 1: somebody necessarily using all the deductions available in the code, um, 185 00:10:52,280 --> 00:10:53,679 Speaker 1: you know, I think they need to look in the 186 00:10:53,720 --> 00:10:56,560 Speaker 1: mirror and ask themselves how much extra did they pay 187 00:10:56,600 --> 00:10:59,679 Speaker 1: to the government, how many deductions did they decided to 188 00:10:59,760 --> 00:11:01,800 Speaker 1: leave off their tax return and say, you know what, 189 00:11:01,840 --> 00:11:03,439 Speaker 1: I don't need these deductions. I'm not even going to 190 00:11:03,520 --> 00:11:06,800 Speaker 1: claim them, right, Yeah, that's a good way to do that. Yeah, 191 00:11:06,880 --> 00:11:09,160 Speaker 1: I think. Um, so do you think then is it 192 00:11:09,679 --> 00:11:12,440 Speaker 1: smart or do you think most people should probably look 193 00:11:12,480 --> 00:11:14,520 Speaker 1: at what the government policies are, what they're trying to do, 194 00:11:14,559 --> 00:11:17,160 Speaker 1: and then align their own goals with the government, like 195 00:11:17,160 --> 00:11:21,280 Speaker 1: you're almost working together, like in partnership. I mean, I 196 00:11:21,320 --> 00:11:25,040 Speaker 1: think whether you want the government as your partner or not, 197 00:11:25,160 --> 00:11:26,880 Speaker 1: I don't. I don't know that we would any anybody 198 00:11:26,880 --> 00:11:30,280 Speaker 1: would necessarily want them as an active partner, but they 199 00:11:30,320 --> 00:11:33,080 Speaker 1: definitely feel like a silent partner getting a share of 200 00:11:33,120 --> 00:11:38,880 Speaker 1: the income and profits and so. Um. You know, the 201 00:11:38,880 --> 00:11:42,440 Speaker 1: there's the tax code, which is the rules around how 202 00:11:42,520 --> 00:11:48,080 Speaker 1: much uh they get, and um, to not know the rules, 203 00:11:48,120 --> 00:11:50,400 Speaker 1: I think it's just not being a good fiduciary. So 204 00:11:51,040 --> 00:11:54,640 Speaker 1: if you're running a business and and you're providing for 205 00:11:54,800 --> 00:11:59,160 Speaker 1: families and income and for all these things, you know, 206 00:11:59,200 --> 00:12:03,839 Speaker 1: why would you not know the rules? So, um, if 207 00:12:03,840 --> 00:12:06,520 Speaker 1: there was a tax deduction or a tax credit available 208 00:12:07,240 --> 00:12:10,520 Speaker 1: and you're not taking it, I mean, why why would 209 00:12:10,559 --> 00:12:15,080 Speaker 1: you Why would you not Why would you do that? Yeah? Exactly? Um, yeah, 210 00:12:15,080 --> 00:12:16,880 Speaker 1: I mean it all goes back to, like you said, 211 00:12:16,960 --> 00:12:19,040 Speaker 1: not paying anymore than you have to. You're you're more 212 00:12:19,040 --> 00:12:21,040 Speaker 1: than welcome to, but you don't have to. And that's 213 00:12:21,080 --> 00:12:24,240 Speaker 1: where I see people, you know, even Bernie Sanders got 214 00:12:24,280 --> 00:12:28,000 Speaker 1: cotton this because he's pushing to increase taxes. And they're like, well, 215 00:12:28,040 --> 00:12:30,319 Speaker 1: you made whatever millions of dollars off your book, did 216 00:12:30,360 --> 00:12:35,240 Speaker 1: you pay more? He's like no, um, so why why 217 00:12:35,320 --> 00:12:37,600 Speaker 1: would he? But let's talk about um a little bit 218 00:12:37,640 --> 00:12:40,000 Speaker 1: about you know, we hear about like Amazon that hasn't 219 00:12:40,040 --> 00:12:42,839 Speaker 1: been paying taxes, or again these rich people don't pay 220 00:12:42,840 --> 00:12:45,840 Speaker 1: their taxes. Or now Trump his some some stuff came 221 00:12:45,880 --> 00:12:48,280 Speaker 1: out his tax plan or i'm sorry, his tax returns 222 00:12:48,280 --> 00:12:50,559 Speaker 1: where they say he hasn't been paying taxes. So what 223 00:12:50,720 --> 00:12:54,000 Speaker 1: kind of a situation happens with a Bezos and Amazon 224 00:12:54,080 --> 00:12:57,199 Speaker 1: or a Trump where they could be a millionaire billionaire 225 00:12:57,240 --> 00:13:00,560 Speaker 1: and not pay taxes. I mean that's totally possible, legal, right, 226 00:13:01,679 --> 00:13:04,400 Speaker 1: Your net worth has nothing to do with how much 227 00:13:04,400 --> 00:13:07,000 Speaker 1: you pay in tax. How much paying tax has to 228 00:13:07,040 --> 00:13:11,720 Speaker 1: do with your income. Okay, that you have income taxes 229 00:13:11,920 --> 00:13:16,520 Speaker 1: which can be ordinary from earned income or capital gains 230 00:13:16,640 --> 00:13:19,560 Speaker 1: or passive income from maybe the sale of an asset 231 00:13:19,720 --> 00:13:22,600 Speaker 1: or something like that, an investment. Uh. And then you 232 00:13:22,600 --> 00:13:25,040 Speaker 1: have a state taxes. Now I hate a state taxes 233 00:13:25,040 --> 00:13:27,800 Speaker 1: because the government's taxing something they've already taxed, and I 234 00:13:27,800 --> 00:13:32,280 Speaker 1: don't I don't like the double tax. Uh So for 235 00:13:32,320 --> 00:13:38,040 Speaker 1: all of the ongoing income taxes. Uh. Look, I don't 236 00:13:38,040 --> 00:13:41,320 Speaker 1: think anybody is getting away with not paying their taxes 237 00:13:42,000 --> 00:13:45,199 Speaker 1: if well, if you owe taxes to the I R 238 00:13:45,400 --> 00:13:48,400 Speaker 1: S and you don't pay, the I R S has 239 00:13:48,600 --> 00:13:51,640 Speaker 1: processes in place to come after you to collect that money. 240 00:13:52,320 --> 00:13:56,840 Speaker 1: You can file leans, they can seize your assets. They 241 00:13:56,920 --> 00:14:02,120 Speaker 1: can Uh, they have a lot of authority to be 242 00:14:02,160 --> 00:14:04,960 Speaker 1: able to come and collect. Okay, it's not a collections 243 00:14:05,040 --> 00:14:08,800 Speaker 1: agency that you want to mess around with, and I 244 00:14:08,840 --> 00:14:11,560 Speaker 1: think they know that, and so that fear that people 245 00:14:11,600 --> 00:14:16,040 Speaker 1: have of them being a really fierce collector, uh is 246 00:14:16,040 --> 00:14:18,520 Speaker 1: is what they use to get the compliance, which is 247 00:14:19,200 --> 00:14:20,880 Speaker 1: not a bad thing. I mean, like we want people 248 00:14:20,880 --> 00:14:24,520 Speaker 1: to comply. But look, if if Basis or somebody like 249 00:14:24,560 --> 00:14:27,520 Speaker 1: that owned oh a billion dollars in taxes, he would 250 00:14:27,520 --> 00:14:31,120 Speaker 1: be in tax courts. Uh the you know, the I 251 00:14:31,280 --> 00:14:34,280 Speaker 1: R S and and potentially even other government agencies would 252 00:14:34,280 --> 00:14:37,160 Speaker 1: be coming after them too. Uh do whatever they had 253 00:14:37,160 --> 00:14:40,920 Speaker 1: to do to seize assets and collect the the tax. 254 00:14:41,560 --> 00:14:44,720 Speaker 1: So you know, I think I think instead of looking 255 00:14:44,760 --> 00:14:48,000 Speaker 1: at those people and saying they should pay more in 256 00:14:48,040 --> 00:14:50,800 Speaker 1: tax and we should maybe look at them and try 257 00:14:50,800 --> 00:14:55,520 Speaker 1: to learn how they're using the laws the rules to 258 00:14:55,600 --> 00:14:59,080 Speaker 1: their advantage to build a business without the drag of 259 00:14:59,440 --> 00:15:03,440 Speaker 1: unnecessary arey taxes. Yeah. So um, that's a great point. 260 00:15:03,520 --> 00:15:07,080 Speaker 1: So let's talk about that. So, um, how could somebody 261 00:15:07,240 --> 00:15:10,480 Speaker 1: set themselves up like a buffet who pays very low 262 00:15:10,520 --> 00:15:13,160 Speaker 1: taxes or Trump who didn't pay taxes, or Amazon? What 263 00:15:13,240 --> 00:15:15,240 Speaker 1: are some things that people could do? Maybe we want 264 00:15:15,240 --> 00:15:18,080 Speaker 1: to break that down into business owner and non business 265 00:15:18,160 --> 00:15:21,080 Speaker 1: owner or business owner investor non business owner. How do 266 00:15:21,120 --> 00:15:24,840 Speaker 1: we think about that? Well, yeah, let's let's start with 267 00:15:24,920 --> 00:15:29,960 Speaker 1: the non business owner, non investor. Hey, I just have 268 00:15:30,360 --> 00:15:35,320 Speaker 1: W two income. Unfortunately, that's the that's the category that 269 00:15:35,360 --> 00:15:38,560 Speaker 1: gets picked on the most. So when you have W 270 00:15:38,640 --> 00:15:41,280 Speaker 1: two income, there's not a whole lot you can do 271 00:15:41,400 --> 00:15:45,440 Speaker 1: if that's your only source of income. So, uh, you're 272 00:15:45,480 --> 00:15:48,800 Speaker 1: gonna pay tax. You're gonna pay tax for the payroll system. 273 00:15:48,840 --> 00:15:52,040 Speaker 1: And most of the tax advantages that you have are 274 00:15:52,080 --> 00:15:55,040 Speaker 1: in your qualified plans like four own ks and I 275 00:15:55,240 --> 00:15:57,320 Speaker 1: raise and things like that that allow you to defer 276 00:15:57,400 --> 00:16:00,440 Speaker 1: taxes or have the gains be tax if it's a 277 00:16:00,560 --> 00:16:04,520 Speaker 1: raw you have, you can save money into life insurance 278 00:16:04,560 --> 00:16:08,520 Speaker 1: that has great tax advantages. So there's different ways that 279 00:16:08,880 --> 00:16:12,520 Speaker 1: as the W two income earners saves and invest, that 280 00:16:12,640 --> 00:16:15,800 Speaker 1: they can save and invest in a tax advantage way. 281 00:16:16,160 --> 00:16:18,120 Speaker 1: You know, with the new tax law, their state and 282 00:16:18,160 --> 00:16:22,360 Speaker 1: local taxes are limited to ten thousand uh deduction, but 283 00:16:22,480 --> 00:16:26,920 Speaker 1: everybody gets a good standard deduction of twelve thousand now uh. 284 00:16:28,040 --> 00:16:30,360 Speaker 1: You know, and then aside from that, you've got charitable 285 00:16:31,200 --> 00:16:34,000 Speaker 1: so you could you could have charitable deductions, and you 286 00:16:34,040 --> 00:16:37,400 Speaker 1: could lump charitable deductions every two or three years to 287 00:16:37,440 --> 00:16:40,080 Speaker 1: get bigger deductions, and and you know, you can kind 288 00:16:40,080 --> 00:16:44,120 Speaker 1: of manage it in a different way. But those people 289 00:16:44,160 --> 00:16:46,160 Speaker 1: really have the least amount of options. So it is 290 00:16:46,200 --> 00:16:48,640 Speaker 1: really important that when they save and invest, their thinking 291 00:16:48,680 --> 00:16:52,320 Speaker 1: about uh the future and how to compound things in 292 00:16:52,360 --> 00:16:55,160 Speaker 1: a tax free environments like you know, investing in real estate, 293 00:16:55,520 --> 00:16:59,000 Speaker 1: investing in tax qualified plans, etcetera. So you're saying that 294 00:16:59,040 --> 00:17:01,960 Speaker 1: because they're you too, they're getting their money and their 295 00:17:02,000 --> 00:17:04,840 Speaker 1: taxes are already being taken out in advance, and there's 296 00:17:04,840 --> 00:17:07,000 Speaker 1: no way they can really write off any of that 297 00:17:07,080 --> 00:17:09,840 Speaker 1: income because they don't have any expenses against that income. 298 00:17:10,160 --> 00:17:12,240 Speaker 1: So basically they are full income is coming in and 299 00:17:12,280 --> 00:17:14,680 Speaker 1: it's just being taxed at full full pop and there's 300 00:17:14,680 --> 00:17:16,159 Speaker 1: really not not much they can do about it. The 301 00:17:16,160 --> 00:17:19,040 Speaker 1: only thing that they can do is change the way 302 00:17:19,080 --> 00:17:22,359 Speaker 1: they're They take whatever money they've earned and grow it 303 00:17:22,400 --> 00:17:24,920 Speaker 1: and they can affect the way that that's taxed. Yeah, 304 00:17:25,040 --> 00:17:27,639 Speaker 1: and you can get some deductions from saving into your 305 00:17:27,640 --> 00:17:30,040 Speaker 1: four own k or an ira things like that, so 306 00:17:30,440 --> 00:17:32,960 Speaker 1: you know how you save and and and what you 307 00:17:33,040 --> 00:17:35,439 Speaker 1: do in the world of philanthropy and charity, you know 308 00:17:35,680 --> 00:17:39,639 Speaker 1: those things. But most of the advantages in the tax 309 00:17:39,720 --> 00:17:44,359 Speaker 1: code are geared to business ownership and real estate. I 310 00:17:44,440 --> 00:17:48,880 Speaker 1: have two theories on that, and there's nothing more than theories. Uh. 311 00:17:49,119 --> 00:17:51,240 Speaker 1: One is that those are the people that provide housing 312 00:17:51,240 --> 00:17:55,439 Speaker 1: and jobs. Uh. The other is that, uh, most of 313 00:17:55,480 --> 00:17:59,160 Speaker 1: the people in Congress come from families who own businesses 314 00:17:59,160 --> 00:18:01,800 Speaker 1: in real estate. So I don't know which way it is, 315 00:18:01,920 --> 00:18:04,639 Speaker 1: but those are the two theories I have on it. Well, 316 00:18:04,720 --> 00:18:06,560 Speaker 1: I would say I would say going back to where 317 00:18:06,560 --> 00:18:10,359 Speaker 1: we originally started, um, right, the government has these policies 318 00:18:10,400 --> 00:18:13,560 Speaker 1: that they're trying to push forward. Obviously, we know getting 319 00:18:13,600 --> 00:18:15,840 Speaker 1: back to employment is a big one, and so of 320 00:18:15,880 --> 00:18:18,439 Speaker 1: course you create a business and create jobs, there's a 321 00:18:18,520 --> 00:18:21,840 Speaker 1: tax incentive, and so I I just think when people 322 00:18:21,920 --> 00:18:24,480 Speaker 1: realign their vision with that, it makes sense. But anyway, 323 00:18:24,520 --> 00:18:27,920 Speaker 1: go ahead. So I think the next category that's a 324 00:18:27,960 --> 00:18:31,399 Speaker 1: little easier to address is the investor categories. So you 325 00:18:31,480 --> 00:18:36,800 Speaker 1: brought up Buffett. I'm not intimately familiar with Buffets finances, 326 00:18:36,880 --> 00:18:40,159 Speaker 1: but from reading his quotes and things that he puts out. 327 00:18:40,600 --> 00:18:43,280 Speaker 1: The thing about his taxes and why he says his 328 00:18:43,359 --> 00:18:46,399 Speaker 1: taxes are lowse because he's very much a buy and 329 00:18:46,640 --> 00:18:51,240 Speaker 1: hold investor. He invests long term. Right, his mantra is 330 00:18:51,760 --> 00:18:55,760 Speaker 1: find companies that have value and and now grantedies such 331 00:18:55,800 --> 00:18:59,439 Speaker 1: a big investor, he can get great investment opportunities and 332 00:18:59,520 --> 00:19:03,919 Speaker 1: deals and and so when he gets these great investments 333 00:19:03,920 --> 00:19:06,960 Speaker 1: and he holds them long term, it's no different than 334 00:19:07,320 --> 00:19:10,240 Speaker 1: if that w two individual buys a home, right, and 335 00:19:10,240 --> 00:19:12,280 Speaker 1: see they go, they buy a home for whatever two 336 00:19:12,400 --> 00:19:15,520 Speaker 1: hundred thousand, five hundred thousand, however much it is. And 337 00:19:15,840 --> 00:19:19,080 Speaker 1: let's say that at home appreciates for a hundred thousand dollars, 338 00:19:19,560 --> 00:19:23,240 Speaker 1: they're not paying tax on that hundred thousand dollars of appreciation, 339 00:19:23,760 --> 00:19:26,119 Speaker 1: and in fact, when they sell that at home, there's 340 00:19:26,400 --> 00:19:29,480 Speaker 1: UH tax laws that allow them to recognize that game 341 00:19:29,520 --> 00:19:33,959 Speaker 1: without paying tax. So you know, if Buffett invests in 342 00:19:34,240 --> 00:19:37,679 Speaker 1: Coca Cola and holds it forever and his stock goes up, 343 00:19:38,119 --> 00:19:41,560 Speaker 1: I don't know, a thousand percent or something fantastic over time, 344 00:19:42,160 --> 00:19:47,440 Speaker 1: he's not recognizing that until he sells. So I don't 345 00:19:47,440 --> 00:19:50,240 Speaker 1: think he sells a lot. He's not a day trader. 346 00:19:50,320 --> 00:19:52,800 Speaker 1: He's not. I don't think he's a very active trader. 347 00:19:52,840 --> 00:19:55,480 Speaker 1: I think he looks for long term, high quality, valued 348 00:19:55,600 --> 00:19:59,080 Speaker 1: investments and and places them. And so I think for 349 00:19:59,320 --> 00:20:03,160 Speaker 1: most investor or, if you follow that kind of mantra, uh, 350 00:20:03,200 --> 00:20:05,560 Speaker 1: you know you're going to get the same benefit. You 351 00:20:05,600 --> 00:20:10,679 Speaker 1: don't pay tax on appreciation until you sell it, and 352 00:20:10,720 --> 00:20:13,800 Speaker 1: then there's tax loss harvesting, you know, where you just think, Okay, 353 00:20:13,840 --> 00:20:17,199 Speaker 1: if I'm gonna realize some appreciation, maybe I should also 354 00:20:17,400 --> 00:20:19,560 Speaker 1: look to cut some dead weight in the same year. 355 00:20:19,640 --> 00:20:22,160 Speaker 1: So sell off some bad ones that I've been hoping 356 00:20:22,160 --> 00:20:25,520 Speaker 1: would turn around, and haven't take those losses. Have those 357 00:20:25,560 --> 00:20:27,840 Speaker 1: losses offset some of my gains that I'm also going 358 00:20:27,880 --> 00:20:30,520 Speaker 1: to realize, and so you kind of have those mechanisms. 359 00:20:30,520 --> 00:20:33,880 Speaker 1: But if you invest in things like businesses and real estate, 360 00:20:33,920 --> 00:20:36,359 Speaker 1: now you're getting Now you're opening up all of the 361 00:20:36,400 --> 00:20:39,600 Speaker 1: tax advantages of business and real estate and investing in those. 362 00:20:40,359 --> 00:20:43,399 Speaker 1: So if you move into that realm of owning a 363 00:20:43,440 --> 00:20:46,040 Speaker 1: business and owning real estate, I mean, the tax code 364 00:20:46,200 --> 00:20:53,400 Speaker 1: is just full of deductions and opportunities to invest and 365 00:20:53,480 --> 00:20:57,760 Speaker 1: reinvest and and make different decisions on how you want 366 00:20:57,760 --> 00:21:01,240 Speaker 1: to manage the finances of your real state in your business. 367 00:21:01,560 --> 00:21:04,240 Speaker 1: Uh uh in a way that's really efficient from a 368 00:21:04,320 --> 00:21:08,400 Speaker 1: tax standpoint. Yeah. Um. And and I guess if anybody's 369 00:21:08,440 --> 00:21:10,000 Speaker 1: read rich Dad, poor Dad, I mean he kind of 370 00:21:10,080 --> 00:21:12,040 Speaker 1: draws that out with the four quadrants going from the 371 00:21:12,040 --> 00:21:14,960 Speaker 1: employee to the small business owner, business owner, the an investor, 372 00:21:15,000 --> 00:21:17,600 Speaker 1: and the business owner and the investors where those tax 373 00:21:17,640 --> 00:21:20,880 Speaker 1: breaks are. So most of the people, UM, I think 374 00:21:21,000 --> 00:21:23,600 Speaker 1: that watched this channel and tune in our investors because 375 00:21:23,600 --> 00:21:26,000 Speaker 1: we typically talk about you know, stock market, gold, bitcoin 376 00:21:26,160 --> 00:21:29,199 Speaker 1: and things like that. So as an investor, is there 377 00:21:29,240 --> 00:21:31,359 Speaker 1: are certain things that I should be looking at doing, 378 00:21:31,880 --> 00:21:35,560 Speaker 1: um with my investments to maximize that Like should I 379 00:21:35,600 --> 00:21:39,679 Speaker 1: be um, should I be investing through corporation. Um should 380 00:21:39,680 --> 00:21:41,640 Speaker 1: I look at, you know, trying to sell every year? 381 00:21:41,880 --> 00:21:43,440 Speaker 1: Should I try to do it through some sort of 382 00:21:43,480 --> 00:21:47,280 Speaker 1: a deferred plan? What what kind of strategies would I use? Yeah? 383 00:21:47,440 --> 00:21:50,359 Speaker 1: So I think if you're if you're not going to 384 00:21:50,480 --> 00:21:54,880 Speaker 1: be a day trader, which I'm not, I think that's 385 00:21:54,960 --> 00:21:57,159 Speaker 1: that's the high risk game that that some people are 386 00:21:57,240 --> 00:22:01,560 Speaker 1: successful at. I I don't have that skill. But you know, again, 387 00:22:01,600 --> 00:22:04,600 Speaker 1: if you're going to be a long term investor, think 388 00:22:04,680 --> 00:22:07,960 Speaker 1: about the tax treatment of where you hold that investment. 389 00:22:08,080 --> 00:22:11,800 Speaker 1: So you know, if you've been able to save into 390 00:22:12,600 --> 00:22:17,359 Speaker 1: tax qualified accounts like I raise or raw diraise or 391 00:22:17,680 --> 00:22:20,440 Speaker 1: four owing case, different types of things like that, those 392 00:22:20,560 --> 00:22:24,919 Speaker 1: come with tax advantages that allow for more active trading 393 00:22:24,960 --> 00:22:28,840 Speaker 1: where you're not recognizing the gains. I think outside of that, 394 00:22:29,240 --> 00:22:32,359 Speaker 1: you know, you have to really look at understanding what 395 00:22:32,440 --> 00:22:36,320 Speaker 1: your cost basis and investments is so that when you have, 396 00:22:37,240 --> 00:22:41,119 Speaker 1: um uh, you know, big movements in the market like 397 00:22:41,160 --> 00:22:45,640 Speaker 1: we've had this year, you have opportunities to take losses 398 00:22:46,160 --> 00:22:49,080 Speaker 1: and and and I think what happens with individual investors 399 00:22:49,080 --> 00:22:52,200 Speaker 1: a lot is they get so emotionally attached and investment 400 00:22:52,640 --> 00:22:55,520 Speaker 1: that they don't ever want to, you know, cut their losses, 401 00:22:56,359 --> 00:22:58,680 Speaker 1: and and so they never want to take the losses. 402 00:22:59,400 --> 00:23:01,919 Speaker 1: And uh, you know, the term for it is just 403 00:23:02,000 --> 00:23:05,240 Speaker 1: tax loss harvesting. Google tax loss harvesting and you can 404 00:23:05,280 --> 00:23:08,520 Speaker 1: probably find all the reading you want for days on 405 00:23:08,600 --> 00:23:12,040 Speaker 1: tax loss harvesting, which is nothing other than saying, I'm 406 00:23:12,080 --> 00:23:15,560 Speaker 1: going to take losses to offset gains in a strategic 407 00:23:15,680 --> 00:23:22,240 Speaker 1: way where it's timed to, you know, minimize my tax liability. Okay, 408 00:23:22,520 --> 00:23:25,160 Speaker 1: now you did talk about We've talked about four oh 409 00:23:25,160 --> 00:23:28,320 Speaker 1: one K. You've talked about IRA roth IRA A tax 410 00:23:28,320 --> 00:23:32,480 Speaker 1: deferred plans, tax free plans. Um, is there an overview 411 00:23:32,520 --> 00:23:34,320 Speaker 1: that you can give us of those and how those 412 00:23:34,359 --> 00:23:37,199 Speaker 1: should be used with the differences of tax deferred versus 413 00:23:37,280 --> 00:23:41,240 Speaker 1: tax free growth or whatever. Yeah, so that the age 414 00:23:41,240 --> 00:23:44,639 Speaker 1: old argument there is, uh, do you want to tax 415 00:23:44,720 --> 00:23:49,359 Speaker 1: the seed or tax the harvest right? And so um, 416 00:23:49,440 --> 00:23:51,719 Speaker 1: if if if I'm gonna max out of four oh 417 00:23:51,720 --> 00:23:54,439 Speaker 1: one K, and I'm gonna put twenty dollars into it 418 00:23:54,480 --> 00:24:00,040 Speaker 1: this year, I'm getting that twenty dollar deduction today. And 419 00:24:00,160 --> 00:24:04,679 Speaker 1: then let's say fast forward and I'm sixty years old 420 00:24:04,800 --> 00:24:07,800 Speaker 1: and i want to cash that out that twenty thousand 421 00:24:07,840 --> 00:24:10,959 Speaker 1: dollars might have grown to fifty thousand or a hundred 422 00:24:11,000 --> 00:24:13,840 Speaker 1: thousand or whatever. I'm gonna be paying tax on that 423 00:24:14,560 --> 00:24:17,199 Speaker 1: entire amount. So I got a deduction on twenty, and 424 00:24:17,280 --> 00:24:19,760 Speaker 1: let's say it grew to I don't know, fifty, I'm 425 00:24:19,800 --> 00:24:23,800 Speaker 1: paying tax on fifty. Right. The flip side of that 426 00:24:24,160 --> 00:24:28,040 Speaker 1: is pay the tax now and invest in things like 427 00:24:29,000 --> 00:24:34,040 Speaker 1: roth IRA or insurance UH contracts that allow you to 428 00:24:34,080 --> 00:24:38,400 Speaker 1: build cash value that have similar tax treatments or roth IRA, 429 00:24:38,600 --> 00:24:41,359 Speaker 1: which is you're using money that I'm paying tax on 430 00:24:41,400 --> 00:24:44,639 Speaker 1: the twenty grand today. So that might look like I 431 00:24:44,680 --> 00:24:47,800 Speaker 1: have fifteen thousand dollars after tax, So I have fifteen 432 00:24:47,840 --> 00:24:50,679 Speaker 1: thousand to investors out of twenty. But I put that 433 00:24:50,720 --> 00:24:54,360 Speaker 1: fifteen grand in there, and that fifteen grand, let's say 434 00:24:54,359 --> 00:24:58,960 Speaker 1: it grows to I don't know um or whatever and 435 00:24:59,160 --> 00:25:01,879 Speaker 1: or forty thousand, but I can take that forty thousand 436 00:25:01,920 --> 00:25:04,320 Speaker 1: out and I don't pay any tax. Right. It might 437 00:25:04,359 --> 00:25:07,199 Speaker 1: not grow the same to fifty, but I don't have 438 00:25:07,240 --> 00:25:09,159 Speaker 1: to pay tax when I take it out. So I 439 00:25:09,240 --> 00:25:11,800 Speaker 1: paid tax today on the twenty instead of tax later 440 00:25:11,880 --> 00:25:14,159 Speaker 1: on the you know, forty or fifty or whatever. It 441 00:25:14,160 --> 00:25:16,879 Speaker 1: grew to, so you know, those are pretty much the 442 00:25:16,920 --> 00:25:22,800 Speaker 1: main UH vehicles that people have to invest in. In 443 00:25:22,880 --> 00:25:28,680 Speaker 1: some corporations, you have deferred compensation plans and executive compensation 444 00:25:28,720 --> 00:25:33,800 Speaker 1: plans that allow for greater deferral of income than just 445 00:25:33,920 --> 00:25:36,600 Speaker 1: maybe a four one K would or or you know, 446 00:25:36,680 --> 00:25:38,880 Speaker 1: and if you don't have a retirement plan, then you're 447 00:25:38,920 --> 00:25:42,959 Speaker 1: limited to a much smaller amount and a pre tax 448 00:25:43,080 --> 00:25:47,639 Speaker 1: ira traditional IRA that gives you deduction versus a raw thira, 449 00:25:47,840 --> 00:25:50,320 Speaker 1: which would be like where you pay the tax today. 450 00:25:50,359 --> 00:25:53,280 Speaker 1: So those are pretty much the options you have there. 451 00:25:53,880 --> 00:25:56,920 Speaker 1: It seems like, um, if we go back to the 452 00:25:57,000 --> 00:25:59,600 Speaker 1: last hundred years of history in the country, the debt 453 00:25:59,640 --> 00:26:03,679 Speaker 1: has owned the grown higher and higher and higher. Um. 454 00:26:03,720 --> 00:26:05,560 Speaker 1: The taxes have bobbled up and down a little bit 455 00:26:05,640 --> 00:26:07,359 Speaker 1: for the but for the most part seemed to always 456 00:26:07,359 --> 00:26:09,359 Speaker 1: be going up as well. When you look at the 457 00:26:09,359 --> 00:26:11,119 Speaker 1: amount of debt that we're adding, it seems like the 458 00:26:11,840 --> 00:26:13,240 Speaker 1: tax rate was going to have to go up. So 459 00:26:13,480 --> 00:26:15,080 Speaker 1: to me, it seems like it would be a better 460 00:26:15,119 --> 00:26:18,879 Speaker 1: idea to pay the tax upfront today knowing what we have, 461 00:26:19,240 --> 00:26:22,000 Speaker 1: versus waiting until the future. Do you see that or 462 00:26:22,119 --> 00:26:23,760 Speaker 1: do you think some people just want to roll the dice. 463 00:26:24,760 --> 00:26:27,760 Speaker 1: I mean, having the crystal ball and where taxes will 464 00:26:27,760 --> 00:26:29,840 Speaker 1: be in the future, to me feels like having the 465 00:26:29,840 --> 00:26:33,000 Speaker 1: crystal ball on um which stock to buy and went 466 00:26:33,040 --> 00:26:35,760 Speaker 1: to buy and went to sell. If you look at 467 00:26:36,119 --> 00:26:40,440 Speaker 1: the history of tax rates, I mean, first of all, uh, 468 00:26:40,640 --> 00:26:43,280 Speaker 1: it wasn't let's seem much more than a hundred years 469 00:26:43,280 --> 00:26:47,760 Speaker 1: ago that we didn't even have uh income tax. Right, 470 00:26:48,080 --> 00:26:53,040 Speaker 1: So since the introduction of income tax, which you know 471 00:26:53,160 --> 00:26:57,159 Speaker 1: caused a big riot when it was rolled out, I 472 00:26:57,200 --> 00:27:01,760 Speaker 1: think it was about forty years ago, somewhere around I 473 00:27:01,800 --> 00:27:06,119 Speaker 1: think the highest tax rate was around seventy percent something 474 00:27:06,200 --> 00:27:08,760 Speaker 1: like that. You can look up look up the history 475 00:27:08,800 --> 00:27:11,600 Speaker 1: of tax rates. You can find some interesting charts. So 476 00:27:11,720 --> 00:27:14,479 Speaker 1: you know, if you think from kind of prior to 477 00:27:14,600 --> 00:27:20,120 Speaker 1: Reagan being president having a sevent tax rate to George 478 00:27:20,280 --> 00:27:25,679 Speaker 1: W being president having a thirty five top rate, Um, 479 00:27:25,720 --> 00:27:27,640 Speaker 1: you know, you go, okay, well, jeez, that got cut 480 00:27:27,680 --> 00:27:34,000 Speaker 1: by half and thirty years. Um. So it has been low, 481 00:27:34,280 --> 00:27:38,399 Speaker 1: it is lower, it has been higher. Uh, it would 482 00:27:38,480 --> 00:27:42,640 Speaker 1: seem like in the future they're going to have to 483 00:27:42,720 --> 00:27:48,960 Speaker 1: raise taxes because the government simply cannot afford um, what 484 00:27:49,000 --> 00:27:53,280 Speaker 1: they're spending. So you know, the the challenge the government has. 485 00:27:53,359 --> 00:27:56,200 Speaker 1: And from my limited exposure to government, it seems like 486 00:27:57,480 --> 00:28:01,120 Speaker 1: the number one concern of the politician is getting reelected. 487 00:28:02,000 --> 00:28:05,679 Speaker 1: And you know, then number two and below is is 488 00:28:05,760 --> 00:28:10,920 Speaker 1: policy concerns. So so getting re elected. You know, when 489 00:28:10,960 --> 00:28:15,360 Speaker 1: you go and you start cutting benefits, whether it's unemployment 490 00:28:15,680 --> 00:28:20,520 Speaker 1: or welfare or social security or medicaid or whatever, you 491 00:28:20,560 --> 00:28:24,200 Speaker 1: start cutting benefits, it's not very popular in the voter base, 492 00:28:24,520 --> 00:28:26,360 Speaker 1: and you can lose voters, which means you can lose 493 00:28:26,400 --> 00:28:32,080 Speaker 1: your reelection. So the government isn't that excited about, uh, 494 00:28:32,200 --> 00:28:35,119 Speaker 1: cutting those things because they don't want to lose votes. 495 00:28:35,160 --> 00:28:38,160 Speaker 1: They don't want to lose their reelection. We don't have 496 00:28:38,280 --> 00:28:41,560 Speaker 1: enough money to pay for it all, so something's got 497 00:28:41,560 --> 00:28:45,560 Speaker 1: to give. Uh. We could continue going in debt, but 498 00:28:45,640 --> 00:28:48,640 Speaker 1: I think even that's gonna that's gonna break down at 499 00:28:48,680 --> 00:28:52,480 Speaker 1: some point. So so what we've been doing is we've said, 500 00:28:52,480 --> 00:28:56,040 Speaker 1: you know what, we'll just keep the programs going without 501 00:28:56,120 --> 00:28:59,240 Speaker 1: increasing taxes. Instead of increasing taxes, will just increase debt 502 00:29:00,080 --> 00:29:02,920 Speaker 1: um But you know, you you those are basically the 503 00:29:02,960 --> 00:29:06,520 Speaker 1: three tools you they're using debt, tax and and spending. 504 00:29:07,040 --> 00:29:09,560 Speaker 1: So you can cut spending, you can raise taxes, or 505 00:29:09,600 --> 00:29:13,200 Speaker 1: you can take on debt or some combination. Uh. You know, 506 00:29:13,320 --> 00:29:15,920 Speaker 1: so politics drives a lot of this. I mean the 507 00:29:16,000 --> 00:29:18,280 Speaker 1: two thous eighteen tax law change, the tax cuts in 508 00:29:18,360 --> 00:29:21,280 Speaker 1: Job Act that that got put through effective the beginning 509 00:29:21,280 --> 00:29:24,920 Speaker 1: of eighteen. I think it's one of the most significant 510 00:29:24,960 --> 00:29:30,880 Speaker 1: tax changes since Reagan administration. And I mean it's it's 511 00:29:30,920 --> 00:29:38,200 Speaker 1: incredibly significant and but you know, uh, you can have 512 00:29:38,240 --> 00:29:43,880 Speaker 1: a significant change the other way. So I mean, who knows, 513 00:29:44,000 --> 00:29:46,240 Speaker 1: who knows. We'll see where it goes. I mean, you know, 514 00:29:46,280 --> 00:29:49,560 Speaker 1: we've we've had um look at a state tax when 515 00:29:49,560 --> 00:29:53,600 Speaker 1: people die. Uh the estate tax exemption not that long ago. 516 00:29:53,600 --> 00:29:55,720 Speaker 1: I forget what year it was, was only six hundred 517 00:29:55,760 --> 00:29:58,000 Speaker 1: thousand dollars and everything over six hundred thousand dollars was 518 00:29:58,000 --> 00:30:03,520 Speaker 1: taxed something around fift Uh. Now that it's like twelve million, 519 00:30:04,120 --> 00:30:08,000 Speaker 1: and it's tax so you know, But there was a 520 00:30:08,040 --> 00:30:11,800 Speaker 1: time period one year randomly under George Bush where there 521 00:30:11,880 --> 00:30:13,600 Speaker 1: I think it was two thousand twelve. If you died 522 00:30:13,640 --> 00:30:16,520 Speaker 1: in two thousand and twelve, Uh, there was zero state tax. 523 00:30:17,040 --> 00:30:21,720 Speaker 1: So things things in tax are just like anything else 524 00:30:21,760 --> 00:30:25,440 Speaker 1: in government. I think it's it's hard to predict and 525 00:30:25,440 --> 00:30:28,840 Speaker 1: and it can change a lot. Yeah, for sure. I 526 00:30:28,880 --> 00:30:31,080 Speaker 1: think you know, as as an investor, you would kind 527 00:30:31,080 --> 00:30:33,080 Speaker 1: of look at like a pricing through a channel, and 528 00:30:33,120 --> 00:30:35,000 Speaker 1: there's kind of like a high and the low prices. 529 00:30:35,320 --> 00:30:36,800 Speaker 1: And so if you kind of look at taxes in 530 00:30:36,840 --> 00:30:39,120 Speaker 1: the same you might see that we've had very high taxes, 531 00:30:39,160 --> 00:30:42,320 Speaker 1: as you pointed out, se very low taxes, and right 532 00:30:42,320 --> 00:30:44,960 Speaker 1: now we're more on the lower end. So just from 533 00:30:45,000 --> 00:30:47,600 Speaker 1: that perspective, it seems like they were on the lower end, 534 00:30:47,640 --> 00:30:51,760 Speaker 1: So why not pay the lower end? Um hate as 535 00:30:51,840 --> 00:30:55,400 Speaker 1: much as people hate their taxes right now, I mean, 536 00:30:55,960 --> 00:30:58,040 Speaker 1: take yourself back to I don't know, I mean, I 537 00:30:59,440 --> 00:31:02,800 Speaker 1: wasn't an adult thinking about these things. But back in 538 00:31:03,680 --> 00:31:05,560 Speaker 1: and you you talk to people about getting a home 539 00:31:05,600 --> 00:31:12,240 Speaker 1: loan that costs like mortgage interest rate andyes, tax rate. 540 00:31:12,360 --> 00:31:14,760 Speaker 1: I mean, and we think we have it bad now 541 00:31:14,800 --> 00:31:20,200 Speaker 1: with thirty seven percent and and you know four percent mortgage. 542 00:31:20,240 --> 00:31:24,360 Speaker 1: I mean, you know, half of what things were a 543 00:31:24,360 --> 00:31:29,240 Speaker 1: couple of generations ago, and so you know, I mean, 544 00:31:29,560 --> 00:31:32,280 Speaker 1: I don't think I don't think Americans are very great 545 00:31:32,000 --> 00:31:38,160 Speaker 1: at keeping history in context, you know, So I mean 546 00:31:38,200 --> 00:31:41,520 Speaker 1: think like uh, two thousand and eight wasn't that long ago? 547 00:31:41,920 --> 00:31:45,120 Speaker 1: And people just got nailed. And what have people done 548 00:31:45,160 --> 00:31:47,480 Speaker 1: since then? We've had had like one of the greatest 549 00:31:47,480 --> 00:31:52,920 Speaker 1: bull market economies ever and and our our people like 550 00:31:53,080 --> 00:31:55,880 Speaker 1: flush or all their retirement counts full, or their bank 551 00:31:55,920 --> 00:31:59,320 Speaker 1: accounts full, or people just sitting on hordes of cash. 552 00:31:59,520 --> 00:32:01,640 Speaker 1: I mean and not don't Mark, but I don't think 553 00:32:01,640 --> 00:32:05,719 Speaker 1: the majority are Yeah, why not? Like if you couldn't 554 00:32:05,760 --> 00:32:08,080 Speaker 1: save a lot of money in the last ten years, 555 00:32:09,120 --> 00:32:11,520 Speaker 1: are you ever going to? And I mean, there's the 556 00:32:11,520 --> 00:32:13,680 Speaker 1: problem the economy or the tax rate or is that 557 00:32:13,800 --> 00:32:18,680 Speaker 1: your behavioral psychology? It's all that. It's all that, um 558 00:32:19,000 --> 00:32:22,320 Speaker 1: you talked about UM you know, uh, politicians not wanting 559 00:32:22,360 --> 00:32:24,800 Speaker 1: to lose elections, and of course we're heading into a 560 00:32:24,920 --> 00:32:27,120 Speaker 1: very big election here in about a month and a 561 00:32:27,160 --> 00:32:29,440 Speaker 1: half two months, um. And I want to dig into 562 00:32:29,480 --> 00:32:31,840 Speaker 1: that a little bit and talk about the the implications 563 00:32:32,000 --> 00:32:34,520 Speaker 1: in taxes in regards to those two things. Before we 564 00:32:34,600 --> 00:32:36,280 Speaker 1: do that, I just want to jump into one other 565 00:32:36,320 --> 00:32:38,800 Speaker 1: thing that you brought up. All right, all right, should 566 00:32:38,800 --> 00:32:40,560 Speaker 1: say it's sparked a question. And I know this might 567 00:32:40,600 --> 00:32:43,440 Speaker 1: be a little bit outside your expertise, but you know, 568 00:32:43,480 --> 00:32:46,800 Speaker 1: what we're seeing now is this push towards a new find, 569 00:32:46,880 --> 00:32:50,560 Speaker 1: a new monetary policy called MMT like modern monetary theory 570 00:32:50,640 --> 00:32:52,760 Speaker 1: right where basically we can just print as much money 571 00:32:52,800 --> 00:32:55,280 Speaker 1: as we want. The debt doesn't matter. Um, we'll use 572 00:32:55,320 --> 00:32:57,400 Speaker 1: taxes to drain the money out of the economy if 573 00:32:57,400 --> 00:33:00,400 Speaker 1: the if the inflation rate goes too high. We're really 574 00:33:00,440 --> 00:33:03,080 Speaker 1: seen this already, I think, starting to be and put 575 00:33:03,080 --> 00:33:05,400 Speaker 1: into place and in a big push for that. The 576 00:33:05,560 --> 00:33:10,000 Speaker 1: question that people have, including myself, is that if they 577 00:33:10,200 --> 00:33:12,560 Speaker 1: can just print as much money as they want, so 578 00:33:12,920 --> 00:33:16,280 Speaker 1: I think, um, in this since this pandemic, they've printed 579 00:33:16,320 --> 00:33:20,800 Speaker 1: like six trillion dollars crazy. The amount of tax revenue 580 00:33:20,840 --> 00:33:25,360 Speaker 1: is about three trillion or something, so they've printed double 581 00:33:25,560 --> 00:33:30,720 Speaker 1: about double what the annual tax revenue is. So why 582 00:33:30,920 --> 00:33:34,480 Speaker 1: collect tax revenue at all? Do you have a con 583 00:33:34,480 --> 00:33:37,680 Speaker 1: you have an answer for that? You know, I haven't 584 00:33:37,720 --> 00:33:42,080 Speaker 1: thought about that, but I think that, uh, that's pretty 585 00:33:42,080 --> 00:33:46,360 Speaker 1: interesting question on why why collect taxes at all? If 586 00:33:46,520 --> 00:33:50,360 Speaker 1: we could just live on debt forever. I think I 587 00:33:50,400 --> 00:33:53,080 Speaker 1: think the reality is that we can't live on debt forever. 588 00:33:54,000 --> 00:33:59,200 Speaker 1: UM at some point, you know, I think right now 589 00:33:59,400 --> 00:34:02,840 Speaker 1: and for a while the United States, really since about 590 00:34:02,840 --> 00:34:08,440 Speaker 1: World War two, has been the dominant financial powerhouse in 591 00:34:08,480 --> 00:34:12,360 Speaker 1: the world, and we're able to have the US dollar 592 00:34:12,440 --> 00:34:14,799 Speaker 1: as the world reserve currency, and right now there's not 593 00:34:14,880 --> 00:34:21,920 Speaker 1: another country that can really replace that. But I mean, um, 594 00:34:22,040 --> 00:34:25,640 Speaker 1: the rest of the world might decide one day that 595 00:34:25,640 --> 00:34:28,560 Speaker 1: that US just living on debt from all the other 596 00:34:28,600 --> 00:34:30,400 Speaker 1: countries is something they don't want to put up with 597 00:34:30,400 --> 00:34:34,120 Speaker 1: anymore and find a way to replace the US as 598 00:34:34,239 --> 00:34:38,640 Speaker 1: the world reserve currency, which would change the world as 599 00:34:38,680 --> 00:34:42,480 Speaker 1: we know it. Uh. And I think, I think that 600 00:34:42,880 --> 00:34:45,120 Speaker 1: keeping the debt in check is probably something that we 601 00:34:45,160 --> 00:34:50,279 Speaker 1: have to do to maintain that position. So, um, I 602 00:34:50,600 --> 00:34:54,080 Speaker 1: don't I don't imagine a world of of no income tax. 603 00:34:54,120 --> 00:34:58,719 Speaker 1: I just I also think that income tax Uh. You know, 604 00:34:58,760 --> 00:35:01,799 Speaker 1: the government likes control and the same way we were 605 00:35:01,800 --> 00:35:05,040 Speaker 1: talking about the carrot and the stick earlier, income tax 606 00:35:05,120 --> 00:35:09,200 Speaker 1: policy provides a way for politicians to kind of reward 607 00:35:09,840 --> 00:35:15,600 Speaker 1: certain groups or provide benefits, or provide incentives or influence 608 00:35:16,360 --> 00:35:19,239 Speaker 1: And and I don't I don't really see government wanting 609 00:35:19,280 --> 00:35:26,319 Speaker 1: to give up that ability to influence behavior and the economy. Yeah, 610 00:35:26,360 --> 00:35:29,440 Speaker 1: So that's a good point. So I mean that's a 611 00:35:29,560 --> 00:35:32,719 Speaker 1: that's a pretty out there question about why don't we 612 00:35:32,800 --> 00:35:36,399 Speaker 1: just borrow money from other people forever? Not I don't 613 00:35:36,400 --> 00:35:39,680 Speaker 1: think that's sustainable. I hadn't got to like how exactly 614 00:35:39,680 --> 00:35:43,160 Speaker 1: that would unfold. It's certainly not sustainable. And I think 615 00:35:43,160 --> 00:35:45,359 Speaker 1: you gave a great answer, actually, and I hadn't really 616 00:35:45,400 --> 00:35:47,520 Speaker 1: thought about that, And it's it is the carrot and 617 00:35:47,520 --> 00:35:50,399 Speaker 1: the stick, and so they need to push policy, and 618 00:35:50,440 --> 00:35:54,000 Speaker 1: so they use taxes for that, and so um, without taxes, 619 00:35:54,000 --> 00:35:55,360 Speaker 1: they give up that control. And so I think that 620 00:35:55,400 --> 00:35:58,719 Speaker 1: actually makes good sense. It's a good answer. Um, it's 621 00:35:58,760 --> 00:36:00,360 Speaker 1: one at one. I think a lot of people are 622 00:36:00,400 --> 00:36:02,640 Speaker 1: going to be asking as we continue down this path 623 00:36:02,719 --> 00:36:05,960 Speaker 1: of printing Yeah, I mean, and in the in the 624 00:36:06,040 --> 00:36:08,920 Speaker 1: path of printing money like this, that that can't go on. 625 00:36:08,960 --> 00:36:14,479 Speaker 1: I mean, um, I uh, you know, we'll never know, 626 00:36:14,680 --> 00:36:19,760 Speaker 1: but I sure wonder how the govern the United States 627 00:36:19,760 --> 00:36:22,279 Speaker 1: government would have reacted if let's say, all of the 628 00:36:22,320 --> 00:36:26,759 Speaker 1: incumbents were re elected and COVID happened in two thousand one. 629 00:36:27,719 --> 00:36:31,360 Speaker 1: I doubt that it would have been the same government 630 00:36:31,440 --> 00:36:36,640 Speaker 1: response that we saw this year. Sure, because uh, you know, 631 00:36:36,840 --> 00:36:39,920 Speaker 1: and I also think that's why you know, I think 632 00:36:39,920 --> 00:36:42,759 Speaker 1: there's a lot of money on the sidelines waiting to 633 00:36:42,800 --> 00:36:47,120 Speaker 1: see how the elections go, because I think I think 634 00:36:47,160 --> 00:36:51,160 Speaker 1: if you have, um, let's say, if they all the 635 00:36:51,400 --> 00:36:57,200 Speaker 1: kind of status quo incumbency transfers over, UM, you're gonna 636 00:36:57,239 --> 00:37:03,840 Speaker 1: see this kind of probably a government that doesn't feel um, 637 00:37:03,880 --> 00:37:07,600 Speaker 1: at least the presidential administration not concerned about re election. 638 00:37:08,640 --> 00:37:13,840 Speaker 1: Uh uh. And if we have a real big changeover uh, 639 00:37:14,000 --> 00:37:17,440 Speaker 1: who the hell knows? All bets are off? I guess, yeah, 640 00:37:17,480 --> 00:37:20,520 Speaker 1: well let's talk about that change over then. So UM. 641 00:37:20,560 --> 00:37:23,600 Speaker 1: You know, obviously we already have the incumbent Trump is there, 642 00:37:23,600 --> 00:37:26,040 Speaker 1: and we have this tax plan, which, as you said, 643 00:37:26,120 --> 00:37:28,080 Speaker 1: was maybe one of the biggest tax changes we've seen 644 00:37:28,080 --> 00:37:31,320 Speaker 1: since the eighties. But then we have the challenger Biden 645 00:37:31,400 --> 00:37:33,640 Speaker 1: coming in, and so he's kind of already kind of 646 00:37:33,680 --> 00:37:37,120 Speaker 1: given us what he thinks is his tax plan that 647 00:37:37,120 --> 00:37:39,480 Speaker 1: that will be moving forward. Um. He's come out and 648 00:37:39,520 --> 00:37:43,640 Speaker 1: said that he wants to raise cap gains um from 649 00:37:43,760 --> 00:37:46,560 Speaker 1: what is it about at the top up to about 650 00:37:46,719 --> 00:37:51,920 Speaker 1: thirty nine point six about that's a big one. Um. 651 00:37:52,080 --> 00:37:56,200 Speaker 1: Per the analysis done at the Tax Foundation, UM, they 652 00:37:56,239 --> 00:38:01,040 Speaker 1: say that um, yeah, up to and above of one million. 653 00:38:01,280 --> 00:38:03,640 Speaker 1: It would eliminate the step up in basis for cap 654 00:38:03,680 --> 00:38:06,319 Speaker 1: gains taxation. So that's a big change. That's a really 655 00:38:06,360 --> 00:38:10,279 Speaker 1: big change to cap gains. What kind of effects do 656 00:38:10,320 --> 00:38:14,600 Speaker 1: you think we would see from that? Uh, well, I 657 00:38:15,080 --> 00:38:17,480 Speaker 1: think we'd have a lot of negative effects. I think 658 00:38:17,520 --> 00:38:21,840 Speaker 1: it would be uh uh. The people that would benefit 659 00:38:21,920 --> 00:38:25,000 Speaker 1: would be the all of the tax planning firms in 660 00:38:25,000 --> 00:38:31,000 Speaker 1: the country have a lot of people with asset sales 661 00:38:31,200 --> 00:38:33,400 Speaker 1: that are trying to figure out how to reduce the 662 00:38:33,440 --> 00:38:36,480 Speaker 1: pain of that change. But I mean, you have to 663 00:38:36,480 --> 00:38:38,640 Speaker 1: think about, first of all, what are capital gains. So 664 00:38:39,320 --> 00:38:43,800 Speaker 1: capital gains are gains on the sale of an asset, 665 00:38:44,920 --> 00:38:47,400 Speaker 1: and so what does that mean. That means the sale 666 00:38:47,400 --> 00:38:51,640 Speaker 1: of an investment like a real estate investment, of business investment, 667 00:38:53,440 --> 00:38:57,960 Speaker 1: other investments. So you know, if you go and you say, 668 00:38:58,640 --> 00:39:01,560 Speaker 1: let's just say, hey, we're gonna the capital gains the 669 00:39:01,640 --> 00:39:08,920 Speaker 1: same tax rate as ordinary income, you're you're the discount 670 00:39:09,200 --> 00:39:14,120 Speaker 1: on capital gains. Tax is an incentive to invest, right, 671 00:39:14,400 --> 00:39:18,320 Speaker 1: They're saying if you successfully invest, you invest in business, 672 00:39:18,360 --> 00:39:22,120 Speaker 1: real estate, stocks, whatever, and you make money doing it, 673 00:39:22,800 --> 00:39:25,279 Speaker 1: we're not going to tax you as much as we 674 00:39:25,400 --> 00:39:28,560 Speaker 1: would from you know, you and I going out and 675 00:39:28,560 --> 00:39:32,440 Speaker 1: working for a paycheck. Now, whether that's right or not, 676 00:39:32,719 --> 00:39:35,920 Speaker 1: I don't know, but that the discount is there to 677 00:39:36,040 --> 00:39:40,600 Speaker 1: incentivize investment. So when you say, hey, we're going to 678 00:39:40,840 --> 00:39:45,480 Speaker 1: tax that as much as let's say ordinary income rates 679 00:39:45,520 --> 00:39:47,920 Speaker 1: for example, which right now the top is thirty seven 680 00:39:48,680 --> 00:39:52,640 Speaker 1: for federal Uh, if you're gonna say hey, let's tax 681 00:39:52,680 --> 00:39:56,480 Speaker 1: it like that, it removes the incentive a little bit 682 00:39:56,640 --> 00:40:00,960 Speaker 1: from investing. But I think that the the counter argument 683 00:40:01,000 --> 00:40:03,840 Speaker 1: to that is, Okay, if you have money to invest 684 00:40:04,080 --> 00:40:07,160 Speaker 1: and the tax law changes, are you just gonna sit 685 00:40:07,280 --> 00:40:10,640 Speaker 1: on it and bury it in the backyard. I think 686 00:40:10,640 --> 00:40:13,640 Speaker 1: people are still going to invest. I don't. I don't 687 00:40:13,640 --> 00:40:16,360 Speaker 1: think it's gonna say well, I'm going to not invest 688 00:40:16,680 --> 00:40:20,120 Speaker 1: because of the taxes, like I think it just I 689 00:40:20,160 --> 00:40:21,960 Speaker 1: think I think what it does is it makes it 690 00:40:22,080 --> 00:40:27,440 Speaker 1: harder for every American to get ahead financially, because whether 691 00:40:27,480 --> 00:40:31,080 Speaker 1: you're that W two income order or investor or business owner, 692 00:40:31,280 --> 00:40:35,080 Speaker 1: real estate person, investing is the way that you have 693 00:40:35,160 --> 00:40:38,200 Speaker 1: to compound the money that you're able to save to 694 00:40:38,320 --> 00:40:42,040 Speaker 1: provide fear future. And so all it does is eat 695 00:40:42,040 --> 00:40:44,759 Speaker 1: away at the compounding. Yeah, just to get a little 696 00:40:44,800 --> 00:40:47,479 Speaker 1: bit of frame to this for those that aren't really 697 00:40:47,520 --> 00:40:50,440 Speaker 1: familiar with what we're talking about. So you have earned 698 00:40:50,480 --> 00:40:52,719 Speaker 1: income that you're working for, and then you have your 699 00:40:52,719 --> 00:40:56,640 Speaker 1: investment income capital gains income. And the thing is that 700 00:40:56,719 --> 00:40:59,279 Speaker 1: from my perspective, is that I've already had to earn 701 00:40:59,360 --> 00:41:02,000 Speaker 1: the income and I already had to pay taxes on 702 00:41:02,040 --> 00:41:04,560 Speaker 1: the earned income. Then after taxes, I take the money 703 00:41:04,560 --> 00:41:06,360 Speaker 1: that I have left over, and then I decided to 704 00:41:06,400 --> 00:41:08,960 Speaker 1: invest it, and then I gotta pay tax again. I've 705 00:41:08,960 --> 00:41:12,160 Speaker 1: already paid taxes. There's a double taxation. So it seems 706 00:41:12,200 --> 00:41:15,880 Speaker 1: to make sense again with the incentive, the carrot and 707 00:41:15,880 --> 00:41:19,000 Speaker 1: the stick. They're incentivizing us to invest because companies need 708 00:41:19,080 --> 00:41:21,880 Speaker 1: investment capital and so forth. So I've earned it, I've 709 00:41:21,920 --> 00:41:24,879 Speaker 1: paid taxes, and now I invest it. Why not get 710 00:41:24,880 --> 00:41:27,839 Speaker 1: a little break on that? It makes sense. Um, So 711 00:41:27,880 --> 00:41:29,440 Speaker 1: that gives them some frame. But let me give you 712 00:41:29,480 --> 00:41:32,080 Speaker 1: a couple of stats that I looked up. So, um, 713 00:41:32,080 --> 00:41:36,839 Speaker 1: we've seen cap gains increase while I have two different instances. Um, 714 00:41:36,880 --> 00:41:40,359 Speaker 1: So Reagan signed a cap gains increase in nine six, 715 00:41:41,120 --> 00:41:44,360 Speaker 1: and um, when the cap gains increase happened within ten months, 716 00:41:44,680 --> 00:41:50,799 Speaker 1: the SNP actually went up thirty interesting UM. And then 717 00:41:50,880 --> 00:41:54,960 Speaker 1: also in UH two thousand thirteen Congress past a cap 718 00:41:55,000 --> 00:41:57,920 Speaker 1: gains increase and the SMP ended up the year thirty 719 00:41:57,920 --> 00:42:03,160 Speaker 1: percent higher. Now that might be causation, not correlate or correlation, 720 00:42:03,160 --> 00:42:05,360 Speaker 1: I should say not causation. But um, that was some 721 00:42:05,440 --> 00:42:10,240 Speaker 1: interesting facts. But I've also seen that. UM. I've also 722 00:42:10,280 --> 00:42:13,879 Speaker 1: seen that a firm wasn't was oh, an advisory firm 723 00:42:13,880 --> 00:42:17,440 Speaker 1: in Chicago was saying that they've been converting um conventional 724 00:42:17,480 --> 00:42:20,879 Speaker 1: iras to roth iras to figure out the taxes. So 725 00:42:21,239 --> 00:42:25,000 Speaker 1: from a tax planning perspective, if we see cap gains 726 00:42:25,040 --> 00:42:29,560 Speaker 1: potentially going you know, almost doubling, really what it makes 727 00:42:29,560 --> 00:42:31,480 Speaker 1: sense when some people want to think like maybe I 728 00:42:31,480 --> 00:42:34,200 Speaker 1: should take cap gains now on some of these things. 729 00:42:34,239 --> 00:42:37,319 Speaker 1: Maybe maybe not my best assets things like that. Should 730 00:42:37,360 --> 00:42:39,960 Speaker 1: wed you talked about harvesting lasses. Should we think about 731 00:42:40,000 --> 00:42:45,280 Speaker 1: harvesting gains in a low tax environment before that goes through? Yeah, 732 00:42:45,719 --> 00:42:48,360 Speaker 1: it's hard to know. I mean, we're trying to predict 733 00:42:48,440 --> 00:42:51,239 Speaker 1: the future of what Congress. You know, who will be 734 00:42:51,280 --> 00:42:54,080 Speaker 1: in Congress and what kind of laws they will create 735 00:42:54,360 --> 00:42:57,680 Speaker 1: and how those laws will be well Biden. Biden says 736 00:42:57,680 --> 00:43:00,400 Speaker 1: he's gonna raise, so we kind of have his word 737 00:43:00,440 --> 00:43:04,440 Speaker 1: on that, right. Yeah, but yeah, it's that's not something 738 00:43:04,440 --> 00:43:08,320 Speaker 1: that president can do alone, so you know, it requires 739 00:43:08,360 --> 00:43:10,840 Speaker 1: Congress to get on board with that and to create 740 00:43:10,880 --> 00:43:15,319 Speaker 1: the law. So, um, you know, President, I don't think 741 00:43:15,480 --> 00:43:19,160 Speaker 1: I don't think there's a precedent for president using some 742 00:43:19,239 --> 00:43:24,359 Speaker 1: executive order to to change tax law. So you know, 743 00:43:25,040 --> 00:43:28,480 Speaker 1: while he might push for that, whether or not he 744 00:43:28,520 --> 00:43:34,200 Speaker 1: gets it, I don't know. Um, you know, so predicting 745 00:43:34,280 --> 00:43:36,680 Speaker 1: tax law, it's kind of like predicting any other investment. 746 00:43:36,719 --> 00:43:40,319 Speaker 1: It's really hard to do. I think that. Uh. I 747 00:43:40,400 --> 00:43:43,040 Speaker 1: do think that taking money off the table when the 748 00:43:43,120 --> 00:43:45,880 Speaker 1: time is right. I mean, look, if for no other reason, 749 00:43:46,400 --> 00:43:50,680 Speaker 1: the market has been amazing for ten years, so you know, 750 00:43:50,840 --> 00:43:55,480 Speaker 1: it doesn't it doesn't last forever, so you should definitely 751 00:43:55,520 --> 00:43:59,920 Speaker 1: consider taking some gains and pocketing some gains and recouping 752 00:44:00,000 --> 00:44:03,279 Speaker 1: your initial investment, taking some chips off the table. Uh. 753 00:44:03,280 --> 00:44:05,920 Speaker 1: And I don't think that letting the tax tail wag 754 00:44:06,040 --> 00:44:09,160 Speaker 1: dog is the right thing to do. I mean, if 755 00:44:09,200 --> 00:44:11,680 Speaker 1: if if it makes sense to capture some gains and 756 00:44:11,719 --> 00:44:14,600 Speaker 1: take them off you know, take them off risk, then 757 00:44:14,680 --> 00:44:17,319 Speaker 1: do it. Um, you know, I don't. I don't think 758 00:44:17,320 --> 00:44:22,520 Speaker 1: being full on risk all the time is the smartest 759 00:44:22,560 --> 00:44:25,879 Speaker 1: way to manage your money. So I think I think 760 00:44:25,920 --> 00:44:28,360 Speaker 1: the tax law is going to change. It's going to 761 00:44:28,480 --> 00:44:32,800 Speaker 1: continue changing, just like all the laws continue changing. And 762 00:44:33,160 --> 00:44:35,560 Speaker 1: so to me, I think that that what we try 763 00:44:35,600 --> 00:44:38,919 Speaker 1: to do is take the law that we have, make 764 00:44:38,960 --> 00:44:41,440 Speaker 1: the most out of it, make the best decisions we 765 00:44:41,480 --> 00:44:44,480 Speaker 1: can with what we have. Uh, you know, so like 766 00:44:44,520 --> 00:44:47,480 Speaker 1: when we're in here in calendar your two thousand twenty, 767 00:44:47,960 --> 00:44:50,600 Speaker 1: let's make the moves that we need to make based 768 00:44:50,600 --> 00:44:54,400 Speaker 1: on the current tax law. And in in two one 769 00:44:54,440 --> 00:44:56,840 Speaker 1: if we get a new tax law, a lot to 770 00:44:56,840 --> 00:45:03,560 Speaker 1: make different decisions. But but uh, definitely, I think that 771 00:45:03,560 --> 00:45:06,440 Speaker 1: would have a huge impact on how people invest, and 772 00:45:06,480 --> 00:45:07,960 Speaker 1: you know, maybe it would make them not want to 773 00:45:07,960 --> 00:45:09,920 Speaker 1: not want to sell is often maybe people would hold 774 00:45:09,920 --> 00:45:11,960 Speaker 1: investments longer. I don't know. Maybe that's why the markets 775 00:45:11,960 --> 00:45:15,000 Speaker 1: went up during those time periods, because maybe people thought, well, 776 00:45:15,040 --> 00:45:17,160 Speaker 1: the hell was selling, I'll just let it ride because 777 00:45:17,239 --> 00:45:20,319 Speaker 1: I don't want to pay the tax. So maybe the 778 00:45:20,400 --> 00:45:23,040 Speaker 1: lack of maybe it reduced selling. Like what I would 779 00:45:23,120 --> 00:45:25,360 Speaker 1: want to look at in those years is what happened 780 00:45:25,400 --> 00:45:28,200 Speaker 1: to the volume the trading volume, and so see what 781 00:45:28,239 --> 00:45:32,799 Speaker 1: happened there. Yeah, interesting points. Well, um, we've gone a 782 00:45:32,800 --> 00:45:34,960 Speaker 1: long time now, so I really appreciate what you've done 783 00:45:34,960 --> 00:45:38,080 Speaker 1: and given us that time. Now, Um, you are a 784 00:45:38,160 --> 00:45:40,400 Speaker 1: tax strategy firms. You're not really a c p A a 785 00:45:40,320 --> 00:45:42,680 Speaker 1: a tax attorney. You just figure out how to reduce 786 00:45:42,719 --> 00:45:45,440 Speaker 1: people's taxes. Of course, the old saying is a you know, 787 00:45:45,480 --> 00:45:47,359 Speaker 1: a penny saved is a penny earned right, So we 788 00:45:47,800 --> 00:45:49,719 Speaker 1: the easiest way to get a pay increases to cut 789 00:45:49,760 --> 00:45:51,840 Speaker 1: your expenses and stuff that you help people do. What 790 00:45:51,960 --> 00:45:54,920 Speaker 1: types of people do you like to work with, like 791 00:45:54,960 --> 00:45:58,880 Speaker 1: what like income levels or what kind of income types. Yeah, sure, 792 00:45:59,160 --> 00:46:01,279 Speaker 1: I would say that most most of the clients I 793 00:46:01,320 --> 00:46:04,680 Speaker 1: work with are in the top tax bracket. Most of 794 00:46:04,719 --> 00:46:10,560 Speaker 1: them are entrepreneurs, business owners, private companies, And like I 795 00:46:10,600 --> 00:46:14,080 Speaker 1: said earlier, that's where most of the advantages are. So 796 00:46:15,360 --> 00:46:17,680 Speaker 1: you know, you you get most of the tax code 797 00:46:17,760 --> 00:46:21,680 Speaker 1: is available to you, and so uh, they just have 798 00:46:21,800 --> 00:46:24,800 Speaker 1: the most planning opportunities. So I think it's where we 799 00:46:24,840 --> 00:46:27,920 Speaker 1: can make the biggest impact. And when you're making an 800 00:46:27,920 --> 00:46:31,400 Speaker 1: impact against money being tax at the highest rate, that 801 00:46:31,400 --> 00:46:35,520 Speaker 1: that impact is most valuable in those um income ranges 802 00:46:35,600 --> 00:46:39,760 Speaker 1: so great. Well, um again, Jeff is from Ark Financial. 803 00:46:39,800 --> 00:46:41,040 Speaker 1: I will make sure to link to it in the 804 00:46:41,040 --> 00:46:43,520 Speaker 1: show notes down below. Is there anywhere else that people 805 00:46:43,760 --> 00:46:45,279 Speaker 1: should follow you, keep up with you or is that 806 00:46:45,280 --> 00:46:47,440 Speaker 1: the best place? Yeah? I mean you can check us 807 00:46:47,440 --> 00:46:51,120 Speaker 1: out on I think around all the variety of social channels. Uh, 808 00:46:51,160 --> 00:46:54,279 Speaker 1: if you want to follow me personally, I launched jeff 809 00:46:54,320 --> 00:46:56,359 Speaker 1: soha dot com if you want to look me up there. 810 00:46:56,400 --> 00:47:00,239 Speaker 1: But uh, regardless, Uh, feel free to reach out in 811 00:47:00,320 --> 00:47:04,120 Speaker 1: whatever form or fashion you like. Yeah, well, good stuff, Jeff, 812 00:47:04,120 --> 00:47:06,239 Speaker 1: Thank you so much for taking the time. Um, and 813 00:47:06,280 --> 00:47:09,839 Speaker 1: that's it. Yeah, thank you Mark. Yeah,