The Right Investments = Pay Less Taxes

Posted at April 27, 2022 Posted In Investing

You’d be surprised to know that the tax code functions like an incentive system if done right. Are you putting your hard-earned money towards investments that could legally reduce your taxes?

Why the Government Taxes Our Income

When income tax was first started in 1913, the government intended to only apply this to the highest earners and this remained primarily true until after World War II. That’s when they figured out that income tax could be used to raise money and help rebuild after the war.

After collecting income tax for some time, the gov’t noticed that people would change their behavior as tax laws were tweaked. Very often, a small change in a tax law would result in a large change in taxpayer behavior. There was a pattern emerging.

For example, if there was an incentive to invest in business, more people would invest in that very business. If there was an incentive to invest in oil and gas, more people would invest in oil and gas.

Your Incentives Build The Nation

Taxes could be used to encourage investor behavior. As a result of those observations, tax laws have since grown from a revenue-raising vehicle to a full-on incentive program— you just need to know how to use it to your advantage.

Another disclaimer: this isn’t a liberal or a conservative position. In fact, the basic concept of using the tax code to incentivize people is basic to most political agendas regardless of the party. The tax code supports the following economic functions:

  1. Provide housing and real estate for businesses to thrive; 
  2. Secure adequate supplies of energy — think oil and gas development incentives, solar incentives, wind incentives, electric car incentives, etc.; 
  3. Provide jobs — consider all of the deductions that businesses get (because they provide jobs and products for society) that employees don’t get.

Whether you’re an employee, self-employed, or a business owner: you can be an investor.

Virtually anyone can put their money towards tax-incentivized investments and reduce their tax payout.

At Match Real Asset Partners, we work hard to find investment solutions that can reduce your tax burden, protect your wealth, and produce passive-cash flow.

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If these principles are important to you and you’d like to discuss this further, please set up a call with me.

Disclaimer: Please note that I do not know your personal tax situation and you should not consider this to be tax advice for you. Take what you’ll learn here and consult with your own tax advisor to determine if any of these tax topics can fit your personal situation.

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