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022: How Donald Trump pays no taxes and what you can learn from him.

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Ask any tax professional about the tax code and they will tell you that it is 90 percent gray. Then why is everyone being so conservative? Well, professionals have a terrible fear of being audited. They have a terrible fear of breaking the law. I get it. No one wants that kind of stress in their life.

However, let’s talk for a second about how the government creates the tax code and what it is meant to do. Of course it is meant to create revenue for the government to spend on important things like roads and schools. That’s obvious. But what is not that obvious is that the government uses the tax code to incentivize investments that it believes are in the best interests of our country.

Let’s take for example the huge tax benefits to investing in oil exploration. Whatever the stated cause for our involvement in various Middle East conflicts, it has always come down to our oil interests. It is the reason we call Saudi Arabia our ally despite the fact that they are, more than any other country in the world, to blame for the rise of terrorism. We started to really understand that maybe this wasn’t a good arrangement after September 11, 2001 and have been hard at work to become energy independent from the Middle East ever since. In fact, the government created phenomenal benefits to investing in oil and gas essentially making the majority of the invested capital tax deductible.

Doing what the tax code allows us to do is not only prudent, but in this case, it’s patriotic! Now why would you be scared of something like that? Like everything else we talk about on Wealth Formula Podcast, it all comes down to educating yourself. Why doesn’t your neighbor or colleague invest in things like this or even know about this? It’s because your neighbor is not taking the time to learn the way you are by listening to this week’s episode of Wealth Formula Podcast.