Chapter 3
Of Book of
Mahesh Thakkar “INSIDE STORY OF US TAX PLANNING” ©
How Laws world over favor
Businessmen in various ways
Let me give a
simple illustration to explain this.
The tax
system for non-business owners in USA or any other democratic country looks
like this:
Earn
Pay Tax
Spend
what's left
This is the
tax system for W-2 wage earners where you earn a salary, and immediately you
are taxed on the gross amount. You are left with the after tax dollars to live
on.
The tax
system for business owners looks like this:
Earn
Spend
First
Pay Taxes
on what’s left
In this tax
class, you still must earn money first, but you next get to write off many of
your expenses in the form of business deductions. Then you only pay taxes on
what's left.
This provides
a very different element of your financial foundation.
In order
to accelerate your financial growth, you MUST have your own business. I don't care if its
software consulting, a trading company, real estate agency or a service
business. But you must own it yourself or with a partner. This is because
the tax laws are tilted in favor of people who are in business for themselves.
REDUCE TAX FROM 57.30% TO 5.73%-SET UP OWN BUSINESS
If you are
not carrying on business of own, you are earning salary as a W-2 employee.
Unfortunately, this is the income that has to bear highest burden of tax in the
country.
Sounds
exaggerated? Let us total up taxes of senior executive making 6 figure salary
incomes in California.
Federal
Tax...................................
30.00%
Add State
Tax..................................
9.30%
Add Local
City Tax...........................
3.00%
Sub-total...................................... 42.30%
Add:
Social Security & Medicare:....
15.30%
Total............................................. 57.30 %
Thus you
are loosing 57.30% OF YOUR HARD EARNED MONEY in taxes. Uncle Sam gets more
than what you get out of your own work.
Can you see
how saving of this tax can drastically change your finances?
That is why I
advise in this Email, as first lesson on tax planning this:
“Set up
Own Business, No matter what.”
This is one
of the strategies that people like Ross Perot, Donald Trump and Bill Gates use
to reduce their taxes from the 50% that the average American pays all the way
down to 4%-5%! That's right: 4% - 5%.
You may think
that you do not have money or experience or guts or courage or support to
start own business.
Do not worry.
Still great things can work out.
How?
