Posted by Tim Stobbs on March 6, 2013
There was a comment left on my one post that had a line that has been running around in my head.
I visit weekly and find it hard to swallow this post because I’m not sure you realize how lucky you and your family are.
Well yes, I’ve had some luck in my life. I won’t deny that, but at the same time I’ve realized something a while ago that perhaps some people don’t entirely get: it isn’t all luck when you are playing with a stacked deck.
Pardon!?!? Sorry, but it is true.
The fact of the matter is I know I’m playing with a stacked deck and have been doing that for a long while since I came to an important realization: the world is built for rich people and business. While people have this odd delusion that their governments are in control, the fact of the matter is they really are not entirely. Business has ( and has had) a disproportionate influence on our governments for a long time…thus the legal system, the tax system and frankly most systems are geared toward their benefit and not the average person.
So by paying off all my debt and investing those systems are slowly fighting me less and now more often working for me. For example, but investing more I get dividends which get taxed at a fraction of the rate of my normal income. While this is good for me as an investor, the real beneficiary of this is the businesses in Canada. On a personal basis the government estimates in 2012, they lost $4.24B of tax income, meanwhile on the corporate side they avoid $6.295 billion in taxes according to the Federal government’s table of tax expenditures. This is just one little example.
If you really want to get to the heart of the matter just look at the federal governments 2012 budget estimates, which show they expect total income tax revenues to be $163.3 billion (from Table 6.5). Guess how much of that is paid by corporate income tax…perhaps half? Not even close, they pay about $32.4 billion or UNDER 20%. This isn’t surprising since businesses get to deduct their expenses prior to calculating their tax and a slew of other options. Personal income tax meanwhile is expected to be….drum roll please…$125.4 billion or 77%. Yep, not to mention individuals are paying the lion’s share of the GST which brings in another $30.9 billion on top of our income tax.
So yes, the deck is stacked, but rather than getting upset I decided to join the winning side and make the systems work for me, while I’m not rich, I can invest more like them and get more income from our small businesses. Also by avoiding debt I now get people to pay me to borrow my money rather than the other way around. It’s not perfect, but it’s better than depending solely on luck.
How about you? Has it been more luck or playing with a stacked deck in your life?