Most people trying to make a crust online (or offline for that
matter) are so focused on doing just that, they ignore taking
simple steps to ensure that they hang on to just as much of
it as they can. Instead, they hand over large lumps of their
hard-earned money in tax, usually in one of two mistaken
beliefs. Either:
1. It’s a good thing, a sure sign of a civilised society. Or,
2. If they don’t, the Feds will “get them”, fining them,
expropriating their assets, maybe even jailing them.
I’d respectfully suggest that those two “reasons” are mutually
exclusive. Visiting penal sanctions on citizens because they
decline to hand over their money to you could hardly be regarded
as the mark of a civilised society. In fact it might more
properly be regarded as the mark of a criminal one!
So how does this situation arise, and how can the thinking man
or woman avoid it?
Most e-mails I receive regarding business opportunities trumpet
the benefits of being an entrepreneur. Now the Shorter Oxford
English Dictionary defines “entrepreneur” as follows:
“A person who undertakes or controls a business and bears
the risk of profit or loss”.
Yes, that’s “risk”, “profit” and “loss”. All things that people
with their own businesses regard as being as inevitable as night
following day.
Interestingly, the SOED contains no definition of “rentseeker”.
Still, key the term in to Google and you’ll discover that it
refers to people who want to be paid to take your money for a
“service” that you would not yourself choose to pay for.
Now let’s just talk this one through:
1. They want to be paid. In practice, they don’t just wish to
be paid, but to enjoy substantial pension rights. All of
this is funded by the taxpayer.
2. In return for these payments, they undertake to extract
further sums of taxpayers’ money to provide what they
describe as “services”.
3. Critically, taxpayers would not, either as individuals or
collectively, freely choose to pay for these services. If
they did, they would do so, in the marketplace.
4. The money is therefore taken by coercion.
5. They lack any concept whatever of risk (at least to
themselves) or of profit (to taxpayers). Loss, on the
other hand, is guaranteed to each and every taxpayer.
Now, in any other context, this process is known as “robbery”,
or, more subtly, “fraud”.
After all, it IS your money, right? Well not according to Uncle
Sam, or, depending where you’re based, your nearest friendly
local equivalent.
Governments seem to think that they’ve generally got a whole
lot better set of ideas about what to do with your money than
you might have yourself (despite all the evidence to the
contrary in front of everyone’s eyes). What they’ve particularly
got, however, is a set of excellent ideas for using your income
to pay their own salaries and pensions (final salary,
index-linked, performance-irrelevant). And these people are
known as rentseekers.
The legendary investor, Jim Rogers, writing in the Foreword to
“Financial Reckoning Day”, by Bill Bonner and Addison Wiggin,
had this to say:
“In America, if you have a job, you pay taxes. If you save
some money, you pay taxes on the interest. If you buy a
stock and get paid a dividend, you pay taxes. If you have
a capital gain, you pay taxes again. And when you die,
your estate pays taxes. If you live long enough to get
social security, they tax your social security income.
Remember: you paid taxes on all this money when you earned
it originally and yet they tax it again and again”.
Now wouldn’t it just be nice to avoid all of that?
Because it’s the simplest thing on earth, particularly if your
earnings are being generated in that weird nether land called
cyberspace, to use a set of perfectly legal arrangements to
process your money FREE OF TAX.
In other words, you set yourself up a company, a bank account,
and a business address somewhere no predatory taxman stalks!
That is, OFFSHORE. There are quite a large number of these
jurisdictions, and there is not a single Fortune 500 company
that doesn’t use them. I kinda think that tells you a lot.
Once it’s all in place it works just like any other company
arrangement – you just don’t pay any tax!
Now no-one’s suggesting that it costs nothing to set up these
arrangements, and it’s true it’s not going to figure high in
your priorities if you’ve got a marketing budget of $10 and are
wondering how to pay the rent. But, assuming that you’re already
generating even reasonable income, it just has to make sense to
look into this.
After all, even if you’re not interested in saving yourself a
whole lot of money, there’s another reason you might wish to
avoid all of this. I’ll leave you with another quote, this time
from Charles Adams, in “For Good And Evil: The Impact Of Taxes
On Modern Civilisation”:
“Tax haven ‘refugees’ report that they are tired of fighting
the taxman. They have had enough of audits, year in and year
out, of having their banking and accounting records picked
over and questioned. They are tired of having their privacy
totally destroyed by inquisitional tax agents. They are
tired of appeals, big fees for tax professionals, and
endless tax litigation. Many complain that the soak-the-rich
philosophy of their homelands was not as intolerable as the
harassment and scorn they receive from revenue bureaucrats”.
Personally, I can relate to that...
If what I’ve been saying strikes any chords at all with you,
there’s much more at http://www.advent-taxfreedom.com, and
a free e-zine too.
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