Mike Andes (business owner) reacts to the Trump–Biden debate and uses reporting about Trump’s tax returns (e.g., reports that Trump paid $750 in income taxes in a year) to explain, for a business-owner audience, how US tax law intentionally provides deductions, depreciation, and credits to incentivize private investment in housing and job creation. He argues the government is inefficient at delivering housing and jobs, so it subsidizes private actors through tax advantages; he stresses these are legal incentives (not evasion) and urges viewers to form businesses, invest in real estate, and use structures (LLCs, trusts) to lawfully reduce taxable income.
Chapters
Okay, okay, okay. So the Trump and Biden debate has just been finished for the United States presidency. And I want to give some hot takes and mostly focus on the business side of things. In terms of the one thing I want to talk about right now, and that is Trump's tax returns. And so I am not a politician. Not gonna try. I'm gonna try my very best not take left or right here. What I'm trying to do right now is try to hopefully educate somebody, business owners especially, about why the tax returns look this way. And you know, people are always crying foul when they see rich people don't pay taxes or when big corporations don't pay taxes. And I'm going to explain why. I'm not going to say it's right, not going to say it's wrong. I'm just going to explain why as simply and as effectively as possible. And you might disagree and you might think I'm taking sides left or right and that I don't care. Like, I'm just trying to explain here. So. So that way you can possibly take advantage of some of the things that you see when you cry foul or people cry foul. There's actually a rhyme and a reason to it, and I want to explain that. All right, so Trump's tax returns allegedly come out. New York Times, Wall Street Journal. Everyone's commenting on it and so saying that, hey, last year he spent $750 on income taxes and he's a billionaire and yet he's paying $750 in income taxes. Okay, so let me make this very clear again, I'm not trying to defend Trump in any way right now. This is not political at all. I'm trying to explain why this happened, and this is why. The government knows that they are very inefficient at some things. The government is good at some things. There are some things that the government is good at and should. It should be a government run system, okay? And people have opinions on that, too, in terms of what agencies should be run by the government versus the free market. However, one of the things that the government is very aware they don't do very well is housing. Public housing is very, very, very expensive. Literally, like just crazy. If you look at the costs of what it takes for the government to put someone in housing versus a private party landlord to put someone in housing. It's crazy. And there's a lot of waste associated with many departments of government. All you have to do is look at the stimulus package and wonder why 2,50 million dollars are spent on masks and PPE. For some departments of the government, it's insane. They are very, very wasteful and they know that and that's fine, okay? They know that housing is extremely expensive for them to provide from a public standpoint. Now they decide that schools are public, they pay for that. And I would argue that's also the very inefficient way of teaching, learning, education, et cetera. And there's a reason why we spend billions and trillions of dollars. Education and public housing and creating jobs, all of the rest of it. And those are all from government ran agencies. Now, when it comes to housing, when it comes to creating jobs, the government knows that they are extremely inefficient and there's a lot of waste. If you look at the per, the cost per job for a government employee is incredibly expensive, okay? Whereas in the private market can be done much, much more efficiently, whether it be housing, whether it be jobs. And those are the two things I want to focus on the most because those are the things that is coming into question when it comes to Trump's tax returns. The reason that someone can make millions and billions of dollars and not have to pay anything in taxes is because the government gives certain deductions and credits towards certain behaviors that, that they want. And for people to call them tax loopholes, it's not even really that. It's tax incentives because the government wants and actually needs private investors to invest money in housing, in creating jobs. Because they know as the government that they can't create jobs for the same cost as the private market. It's impossible. And so what do they do? Instead of trying to go in and create jobs themselves and spend exorbitant amounts of money doing it extremely inefficiently, they say, hey, look, why don't we just give people tax credits, tax advantages, tax write offs. If they own a business and they hire people, if they go out and they create housing, they have an apartment complex, they own single family homes, they have duplexes, they have other real estate. We're going to allow them to have certain tax advantages in terms of depreciation, writing off expenses. Those are all incentives that the government wants people to use. All right? The government puts those things in place because they want people to do them. And so to say that someone is, you know, just like, like just because you make a bunch of money, you should be paying a bunch of taxes. Really, someone that's making a bunch of money and paying a bunch of taxes is dumb. It's the bottom line in this country, there's no reason to be spending a lot of money in taxes if you're using your money correctly in the form of investments and investing in assets that you can dep. Appreciate and creating jobs and in making sure you hire more people and do all the things that the government wants you to do. This is not trying tax evasion, folks. This is not trying to be sketchy. When you are a business owner and you are creating jobs, you're going to get tax incentives that are far, far less in terms of loss of revenue for the government than if they tried to create that same job. The same thing goes for housing. I'm dealing with public housing authorities right now with, with the duplexes that I've just purchased and the amount of inefficiencies and poor management and cost, like, just horrible management of costs is government. That's government for you. And so for people to step in and say, look, people who make a lot of money should be paying more taxes, like, okay, but they're also the one creating thousands and thousands of jobs. And those people are paying taxes and those jobs are creating other jobs. And, oh, by the way, all of that property and the businesses, they're also paying property taxes and utilities and paying for their school, the schools to be open via sales tax. All of those things. Like, if you're not going to take that into account, I don't know what to say. And I'm not trying to defend Trump's tax returns here. I'm simply trying to give people education that you should be doing the same thing. If you're gonna cry like, oh, I'm paying a lot of taxes, okay, educate yourself and figure out how you don't have to pay taxes. And to say that it's unpatriotic not to pay taxes is ridiculous. When the government actually incentivizing and needing you to create housing like they need affordable housing, so what do they do? Instead of going and spending billions of dollars on creating really inefficiently poorly managed housing, they just basically say, look, we're going to give an incentive. You're able to do a tax depreciation over the course of 27 and a half years, let's say, for example, or 10 years, depending what it is, you can take off your interest off of your. Off of your adjusted gross income. These are all things that they know they're getting a great discount at. And just think that someone that's paying a bunch of money should be paying a lot of taxes. I pointed to that person say, you're not doing something right. You didn't educate yourself on correct amount of investing. Because if you're making 100% W2 income and you're spending, you're earning a million dollars. Yeah. 400,000 of that at least, depending what state you're going to be in, is going to go to the government. And in my mind, that's crazy. You should start a business. You should start an llc. You should go and invest in real estate. You should have some sort of depreciation. You should set up a trust fund for your children. These are all things that are built by the government to incentivize us to go in a certain direction. And to say that someone is trying to fraud the system because they're doing exactly what the government needs them to do is just absolutely wrong. I'm not trying to say trying to go political here at all. I'm trying to explain that if you are trying to build wealth in America and you follow the guidelines that are perfectly legal in the tax code, it is in the best interest of the public, it saves the government money, and therefore you are incentivized and you don't have to pay as many taxes. So start a business. Don't just, like, cry. Start a business. Figure it out. Learn. Educate yourself. People watching this, you already taken the first step. Educate yourself on investing in real estate. Listen to podcasts, listen to audiobooks. People don't want to. They want to sit back. They want everything given to them, and they want someone else to pay their taxes. Well, I hope that helped somebody, because hopefully you start your business, you start thinking about investing, you start thinking about what your tax implications are, and you start doing something special for this country. That's all I got out of tonight's debate, and that's all I wanted to share so far.
