Tags: Kleinfeld | tax | govt | fair

Happiness Is a Positive Cash Flow

Monday, 10 September 2012 09:10 AM Current | Bio | Archive

Finding happiness is not the same as keeping happiness.

In this world, getting and keeping happiness takes money.

What really counts is how much net cash is in your pocket after tax.

Tax is for nearly everyone — rich or not rich — the single largest expenditure that they make every year.

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans

For all those other than the mega-rich, most spend more money on tax payments alone than they do on food, clothing and shelter combined.

Income tax, in particular, is kind if a strange creature. The government calculates the tax based on something called “income” but only accepts payments in cash.

Figuring out income, deductions, tax and then credits takes about 77,000 pages of tax law and then a few pages of tax rates.

Figuring out cash takes about one sentence.

When tax is taken by the government from you, it is a pure cash loss to you.

Many widely held tax beliefs surrounding tax and spending that people accept as unquestionably true are simply not true.

The government does not invest. It spends your cash.

Government does not build anything — you do with the money the government takes from you.

Government does not create jobs — you do with your cash, which is used to hire to referees (e.g., regulators) and rule makers (e.g., legislators) so the free marketplace generating productivity does not become a free-for-all marketplace.

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans

Government does not supply healthcare nor does it give subsidies. You do. Government does not educate your children. You pay for all of it.

The government does not think of your cash as tax really. To the government, it is “revenue,” as if it is something the government earned.

When you spend your own money, the government views it as tax expenditure. You are not spending your money, you are spending the government’s money.

The way government calculates tax is by applying tax rates on your income and/or limiting what the government will recognize as tax expenditures (that is, deductions) you can take from your income.

From the government’s point of view and those who support the government’s tax and spend policies, you spending your cash is something that is a cost to the government.

By reducing this “cost” (that is, you spending your own money and taking your spending as a tax deduction), the government increases its revenue.

To the government, reducing your tax deductions is not “raising taxes,” even though it really is.

When government limits deductions and also raises tax rates, the taxpayer is hit with a double whammy.

All those “loopholes” and “tax gimmicks” come from money that you have paid or will pay from your cash flow.

Getting rid of taxpayer-abusive transactions is just another way for the government to raise the amount you pay in cash as tax, yet claim it is not raising taxes.

This sort of charade goes with the claim that actual taxpayers are not paying their fair share of tax. It comes from people who are not paying tax or from people making money out of the giveaway payments.

The cash and other valuable benefits, which others deem themselves entitled to as their fair share of your work, is just a government-enforced robbing Peter to pay Paul scheme.

It is not so remarkable that the people getting tax-free money and benefits from the government support those politicians who take the credit for giving it. All organized and delivered by the leaders of the welfare and subsidy industries who have become millionaires along the way.

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans

I am constantly amazed by taxpayers who claim that understanding the tax system is “too complex” or “above my pay grade” or “that is what we pay the government to figure out.”

Tax is just another cost of living. Like paying the mortgage, medical expenses, interest on credit cards, transportation and alimony payments.

As long as tax law is based on the politics of “fairness” and not equality, keep your eye on how much cash after tax stays in your pocket.

In the end, happiness is a positive cash flow.

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Monday, 10 September 2012 09:10 AM
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