About a month ago, Mark Cuban, the well-known—and outspoken—owner of the Dallas Mavericks, wrote this on his blog in a post entitled “The Most Patriotic Thing You Can Do”:
"So be Patriotic. Go out there and get rich. Get so obnoxiously rich that when that tax bill comes, your first thought will be to choke on how big a check you have to write. Your 2nd thought will be “what a great problem to have”, and your 3rd should be recognition that in paying your taxes you are helping to support millions of Americans that are not as fortunate as you."
According to Cuban, the most patriotic thing you can do is pay your taxes.
While I have a lot of respect for Mark Cuban and appreciate him as an entrepreneur, I simply differ with him on this.
In fact, if there’s one thing I’ve learned from my Rich Dad tax advisor, Tom Wheelwright, the most patriotic thing you can do is not pay your taxes!
Let me explain.
The Tax Code is Made to Incentivize
As you probably know, the tax codes in the US and in many different countries are long and complicated. The question is, why?
The reason is that government leaders learned a long time ago that the tax codes could be used to make people and businesses do what they want by utilizing the tax code.
In short, the many credits and breaks that are found in the tax code are there precisely because the government wants you to take advantage of them. For instance, the government wants cheap housing. Because of this, there are many tax credits for affordable housing that developers and investors can take advantage of that minimize their tax liability, put more money in their pocket, and in turn, create affordable housing. Everyone wins.
There are many scenarios like this in the tax code that incentivize investors and entrepreneurs to do activities the government is looking for while rewarding those who take those actions with lower - or zero - tax burden.
Because of this, limiting your tax liability actually means you’re doing what the government wants you to do through the tax code. And that is the most patriotic thing you can do.
Giving money to poor people only makes more poor people.
Also, while I understand Cuban’s sentiment that paying your taxes helps people less fortunate than you, I also agree to disagree. Much of your taxes go towards vital programs such as the military that benefit everyone.
The programs that benefit people who are less fortunate, however, are entitlement programs that may actually hurt everyone in the long run, such as social security and medicare, because they are part of the systemic problem that is crippling our economy with debt.
Other programs are welfare programs that enable poor people to stay poor people rather than enable them to move out of poverty. Welfare programs don’t help the poor because rather than teach them to fish, they are given fish - and I learned in Sunday School it is always better to teach people to fish for a lifetime than to simply give them fish for a day.
Look out for Tom’s new book on taxes.
These ideas and more, as well as pro advice on how to set up your tax plan to pay little-to-nothing in taxes, are fleshed out in great detail in Tom Wheelwright’s new book, Tax-Free Wealth, that is coming out in a couple months.
Tom is a genius when it comes to taxes, and I encourage you to read his book when it comes out — and to begin looking at how you can be patriotic by not paying your taxes by investing and building businesses that the government rewards with tax breaks and credits for doing exactly what they want.
Also, for more information on using the tax code to get rich, take advantage of our Rich Dad education and coaching classes that will help increase your financial education and your wallet, while decreasing your tax bill.
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