The Obama administration announced last Monday that it intends to close supposed tax loopholes currently being utilized by companies and individuals alike. OK, to prevent you from wondering, yes. This is not a political blog. However, this proposal may have a direct impact on your financial future, if you live and accumulate your retirement wealth in the United States.
Taking Advantage of Tax Loopholes
It is critical for you to understand that a tax loophole is simply an alternative or way out that is perfectly LEGAL. It would have been another story if they were illegal, but notice that no one is claiming otherwise – although I personally believe that most news outlets packaged their reporting about this proposal in a way that indirectly suggests the loopholes are illegal.
Suppose you lived next to a state with no sales tax and you figured you could save, say, $200 on a major purchase by driving 25 minutes across state lines. Would you make the drive? How about if you regularly commute to another state where sales taxes are waaaaay lower? Would you shop there for the exact same items you could buy at home for more? What about online purchases, if they save you money on sales tax? If you answered yes to any of those scenarios, you just used – or proposed using – a tax loophole. And, in case you were wondering, I live in Maryland, Virginia, West Virginia, D.C. and Delaware! Awesome, huh?
However, Laser Financial Group has always maintained, on our website and in all of our printed materials, that people and companies should NEVER plan around tax loopholes. Man, do we feel like geniuses today!
How Will It Affect You?
Regardless of what the political pundits say, I contend that the #1 headache of ANY administration is to figure out how to pay for stuff. And, as I have always taught, the federal government (Democrat, Republican, or whoever) has only one form of revenue: TAXES.
If you’ve heard me speak or read any of my writings on this subject, you know that I’m not a fan of higher taxes. Who is? Wait, Uncle Sam is – shhhh! However, the reality is crystal clear. The only way the federal government will be able to get a handle on our humongous national debt – and pay for new stuff – is to tax more now, and in the years ahead. It MUST happen, and it’s going to happen. The only alternative is to spend less, and you know how completely unlikely that is to happen.
According to a CNN story, “The administration expects the initiative to raise at least $210 billion over the next 10 years.” And, that’s the whole purpose – to raise revenue. Not to fix illegal behavior, because this behavior is NOT illegal.
Is It SMART to Have Your Wealth in a Taxable Environment?
Sadly, the majority of Americans are using tax-deferred retirement accounts – e.g., 401(k)s, IRAs, TSAs, and 403(b)s – because their so-called advisors are completely clueless, brainsick, or simply do not care. Look, none of those advisors can remotely guarantee that you’ll be in a lower tax bracket when you begin drawing income for retirement and Uncle Sam cares about paying his bills, NOT yours.
Why not join the select few who have discovered and are using the absolutely income TAX-FREE alternative? It is perfectly legal, no loopholes (President Obama approves of that), and based on existing tax law. Why is only a tiny percentage of the population using it? It’s because more than 95 percent of financial advisors don’t know what they are talking about when it comes to retirement planning.
Call us today at (301) 949-4449 for your free consultation so that you can work with one of the five percent of financial advisors who can set you up for this income tax-free alternative!
Very interesting!!! thanks for making it clear that the income tax free alternative is Legal,A few of my friends believe the myth that the Advisors and people who invest using the Tax-Free system is cheating the government,therefore they are scared to get out of the mess they are in.
ReplyDeleteSM MD.