A Different Way of Looking at Paying Income Taxes
It doesn’t matter what country you live in, no one likes to pay income tax.
Because people don’t like to give away the money they earned to a government, they spend a lot of time and effort figuring out ways to avoid paying or at least reducing the amount they have to pay. I’m sure a lot of people just plain cheat, and hope they don’t get audited.
My advice is to put that time and effort into finding ways to increase income and don’t worry about the taxes.
Over the years, I’ve asked people this simple question:
How would you like it if you had to pay a million dollars in income tax?
Everyone usually answers in basically the same way;
“No way,”“I wouldn't do it,”“Are you kidding me,” “Never,” "I'd hate it" and so on.
When I tell them that I would love to pay a million dollars in income tax,
it usually shocks them.
Here’s the way I think:
If I’m in the top tax bracket, let’s say 50% just to simplify, half of my income goes to the government (by the way, the United States top rate is 44%, but Denmark’s is the highest at 60%).
If I paid one million dollars in income tax, that would mean that I made two million dollars in income. Simple math would tell me that I would get to keep one million dollars for myself. That equals roughly over $83,000 a month, net.
Could you live on that?
Now if you earn below the poverty rate, you are exempt from paying taxes.
So, with that new information, which would you rather brag about;
Not having to pay taxes or having to pay a million dollars in taxes?