Just received this email:
“You keep mentioning the terms, “Legal, moral, ethical.” Because the code is “rigged,” a lot of what you’re suggesting may be “legal,” but, in my humble opinion, these “strategies” are not necessarily either “moral” or “ethical.”” Name withheld.
I feel there are two sets of laws: Moral Laws and Man-made Laws. Moral supersedes man-made. If you disagree, you may not be aware that Hitler did not break any man-made laws but MANY moral ones. (For an excellent discussion of this visit www.StandtoReason.com).
Let me give you an example of a contrived situation to illustrate the difference. If my daughter was injured and bleeding profusely, I want, no I NEED the quickest medical solution available. If there’s a veterinarian next door, I’d have him stop the bleeding and stitch the injury. Under the law that’s illegal, but morally, and for my child’s life, I do it.
So what makes a man-made law, specifically a TAX law, immoral? Here’s one example: one client faithfully donates 10% of his $500k income to his church. Not only is this annual gift disallowed (he makes “too much”), the donation triggered an additional tax, the AMT (Alternative Minimum Tax). His generosity was rewarded with higher taxes! Now THAT is immoral!
Fortunately, creative use of the tax code, uh, sorry, tax law, allows him to get the full deduction for that donation and avoid the AMT by changing the accounting form used.
So why did the email author make this “immoral” claim about the process of tax reduction? Does he feel that using the tax code to lower taxes is bad? Perhaps he feels, like so many politicians here, that the wealthy don’t “pay their fair share”? Or maybe he thinks that legally lowering or avoiding corporate tax is immoral?
The US has a HIGH corporate tax rate, one of the highest of all developed countries. Politicians like corporate taxes because voters like corporate taxes. Voters like them because they feel political leaders are “helping” lower personal taxes. Except all companies do is raise prices to pay the taxes. So corporate taxes really wind up becoming a “tax” on individuals anyway. Simple business folks.
Anyone that criticizes our attempt to help small business owners and entrepreneurs from keeping the money they work thousands of hours and take life altering risk to get, is at best poorly informed and, at worst, a socialist.
If his only form of charity is to give to the Federal Government, more power to him. We need as many people overpaying their taxes as possible, but for me and my clients, we will focus on using the rules given to us to pay the lowest taxes legally, morally and ethically.