And Why Hillary Clinton is Wrong To Attack Him On It
You can tell that the presidential race is heating up because the attack ads are heating up too. In the past, much of political advertising happened on the television. If you didn’t like it, you could change the channel. This election involves social media more than any other I can remember.
Last week, Hillary Clinton, the Democratic nominee for president, sent this out on her Twitter account:
Usually, the candidates choose to release their tax returns if they are running for president. Donald Trump has elected, so far, not to do this.
Last week, Hillary and Bill released their 2015 tax return to the public. This was most likely the reason they are attacking Trump on his tax returns. As The New York Times reports, Hillary and Bill paid “$3.6 million in federal taxes for an effective tax rate of about 35 percent.” Most of this income came from speeches and Hillary’s memoir.
I find it interesting that Hillary would choose to attack Donald Trump for not paying anything in taxes and celebrate that she paid so much in taxes. This to me shows that Hillary is a career politician, while Donald is a career entrepreneur. It also shows me that Donald is doing what the tax code was intended for while Hillary and Bill are being penalized for not doing what the tax code was intended for.
As 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.
Why Hillary is wrong
This is why it is insanity for Hillary to criticize Donald for not paying taxes. The only way in which he would not pay taxes would be by doing things like investing and creating jobs to receive tax benefits created by the government! Conversely, the fact that Hillary and Bill paid a 35% tax rate and millions in taxes shows they are not doing what the government wants. They are not providing jobs, starting businesses, or investing in a meaningful way.
Personally, I’d rather have someone who understands how money and taxes work, how to create jobs and invest in ways our own tax code incentivizes, than one who doesn’t. This is not an endorsement of either candidate, but it is a true observation regarding this one issue.
Hillary’s tweet is capitalizing on the general ignorance around money and taxes that much of our country has. In that way, it is actually a lie and a form of fear mongering. It is an attack without legs to stand on, preying on emotions rather than appealing to logic and intellect.
But that’s what most of our politics has devolved to these days, so I’m not surprised.
Want to know more? Read Tom’s book on taxes
During the election season, you’ll hear lots of things that sound right, but fall apart upon further analysis. That’s why it pays to do your own homework, especially when it comes to money and taxes.
And that’s why you should read Tom Wheelwright’s book, Tax-Free Wealth.
Tom is a genius when it comes to taxes, and I encourage you to read his book- 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.
More to protect your money: Do You Need Insurance Against the U.S Dollar?