"Once government got a taste of money, the...
"Once government got a taste of money, the appetite grew," said rich dad"Your dad and I are exactly oppositeHe's a government bureaucrat, and I am a capitalistWe get paid, and our success is measured on opposite behaviorsHe gets paid to spend money and hire peopleThe more he spends and the more people he hires, the larger his organization becomesIn the government, the larger his organization, the more he is respected On the other hand, within my organization, the fewer people I hire and the less money I spend, the more I am respected by my investorsThat's why I don't like government peopleThey have different objectives from most business peopleAs the government grows, more and more tax dollars will be needed to support it
My educated dad sincerely believed that government should help
peopleKennedy and especially the idea of the Peace CorpsHe loved the idea so much that both he and my mom worked for the Peace Corps training volunteers to go to Malaysia, Thailand and the PhilippinesHe always strived for additional grants and increases in his budget so he could hire more people, both in his job with the Education Department and in the Peace Corps
From the time I was about 10 years old, I would hear from my rich dad that government workers were a pack of lazy thieves, and from my poor dad I would hear how the rich were greedy crooks who should be made to pay more taxesBoth sides have valid pointsIt was omega constellation difficult to go to work for one of the biggest capitalists in town and come home to a father who was a prominent government leaderIt was not easy knowing who to believe
Yet, when you study the history of taxes, an interesting perspective emergesAs I said, the passage of taxes was only possible because the masses believed in the Robin Hood theory of economics, which was to take from the rich and give to everyone elseThe problem was that the government's appetite for money was so great that taxes soon needed to be levied on the middle class, and from there it kept "trickling down
The rich, on the other hand, saw an opportunityThey do not play by the same set of rulesAs I've stated, the rich already knew about corporations, which became popular in the days of sailing shipsThe rich created the corporation as a vehicle to limit their risk to the assets of each voyageThe rich put their money into a corporation to finance the voyageThe corporation would then hire a crew to sail to the New World to look for treasuresIf the ship was lost, the crew lost their lives, but the loss to the rich would be limited only to the money they invested for that particular voyageThe diagram that follows shows how the corporate structure sits outside your personal income statement and balance sheet

How the Rich Play the Game

Is reduced/diminished by expenses
Assets chanel latest handbag ------------------------------------------------> Income
(through personal corporation)

It is the knowledge of the power of the legal structure of the corporation that really gives the rich a vast advantage over the poor and the middle classHaving two fathers teaching me, one a socialist and the other a capitalist, I quickly began to realize that the philosophy of the capitalist made more financial sense to meIt seemed to me that the socialists ultimately penalized themselves, due to their lack of financial educationNo matter what the "Take from the rich" crowd came up with, the rich always found a way to outsmart themThat is how taxes were eventually levied on the middle classThe rich outsmarted the intellectuals, solely because they understood the power of money, a subject not taught in schools
How did the rich outsmart the intellectuals? Once the "Take from the rich" tax was passed, cash started flowing into government coffersInitially, people were happyMoney was handed out to government workers and the richIt went to government workers in the form of jobs and pensionsIt went to the rich via their factories receiving government contractsThe government became a large pool of money, but the problem was the fiscal management of that moneyThere really is no recirculationIn other words, the government policy, if you were a government bureaucrat, was to avoid having excess moneyIf you failed to spend your allotted tiffany silver funding, you risked losing it in the next budget
You would certainly not be recognized for being efficient Business people, on the other hand, are rewarded for having excess money and are recognized for their efficiency
As this cycle of growing government spending continued, the demand for money increased and the "Tax the rich" idea was now being adjusted to include lower-income levels, down to the very people who voted it in, the poor and the middle class
True capitalists used their financial knowledge to simply find a way to escapeThey headed back to the protection of a corporationA corporation protects the richBut what many people who have never formed a corporation do not know is that a corporation is not really a thingA corporation is merely a file folder with some legal documents in it, sitting in some attorney's office registered with a state government agencyIt's not a big building with the name of the corporation on itIt's not a factory or a group of peopleA corporation is merely a legal document that creates a legal body without a soulThe wealth of the rich was once again protectedOnce again, the use of corporations became popular-once the permanent income laws were passed- because the income-tax rate of the corporation was less than the individual income-tax rates In addition, as described earlier, certain expenses could be paid with pre-tax dollars within the corporation
This war between the haves louis vuitton pink handbag and have-nots has been going on for hundreds of yearsIt is the "Take from the rich" crowd versus the richThe battle is waged whenever and wherever laws are madeThe battle will go on foreverThe problem is, the people who lose are the uninformedThe ones who get up every day and diligently go to work and pay taxesIf they only understood the way the rich play the game, they could play it tooThen, they would be on their way to their own financial independenceThis is why I cringe every time I hear a parent advise their children to go to school, so they can find a safe, secure jobAn employee with a safe, secure job, without financial aptitude, has no escape
Average Americans today work five to six months for the government before they make enough to cover their taxesIn my opinion, that is a long timeThe harder you work, the more you pay the governmentThat is why I believe that the idea of "Take from the rich" backfired on the very people who voted it in
Every time people try to punish the rich, the rich don't simply
comply, they reactThey have the money, power and intent to change thingsThey do not just sit there and voluntarily pay more taxesThey search for ways to minimize their tax burdenThey hire smart attorneys j and accountants, and persuade politicians to change laws or create legal loopholesThey have the resources to effect change
The Tax Code of the United States also allows other ways to save on cartier watches ta