What Is Tax Freedom Day Anyway?
I like the sounds of it, until I realize what it really means.
I mean, who wouldn’t want to be “free from taxes”?
According to Wikipedia, Tax Freedom Day is:
“the first day of the year in which a nation as a whole has theoretically earned enough income to pay its taxes. Every dollar that is officially considered income by the government is counted, and every payment to the government that is officially considered a tax is counted. Taxes at all levels of government—local, state and federal—are included.”
Here in Canada, our Tax Freedom Day, which is more of a reflection of when average Canadians have earned enough to cover their annual taxes, and this year falls on June 9th. This is a day later than it was last year, and amounts to nearly 45% of your earnings going straight into the government coffers.
Here’s a quick video from the Fraser Institute economist, Charles Lammam, who calculated this year’s Tax Freedom Day.
Skip to 1:25 for the Tax Freedom Day segment.
Tax Freedom Day varies from country to country, but the bottom line is, most people will spend 1/3rd to nearly 2/3rds of their lives earning money just to pay taxes.
Wouldn’t you rather find a way to legally, morally and ethically reduce your tax burden?
Like one of my mentors Robert Kiyosaki says, your taxes will be one of, if not, the largest expense you’ll face in your lifetime.
Which is why he encourages people to move from the E, employee and S, small business owner categories of his Cashflow Quadrant, over to the B, Big Business and I, Investor categories. By moving from the left side of the quadrant to the right side you’ll dramatically reduce your tax bill, and your tax freedom day will be considerably sooner in the year.
Keep in mind that the Tax Freedom Day indicated above, is for the “average” person.
Who wants to be average though?
I certainly don’t, and that’s why nearly a decade ago I started my own business while I was still working so I could break free from the rat race.
Here’s a great distinction between how the average person pays taxes, and how business owners and investors pay taxes.
The average person works at a job, earns an income, pays taxes on that income (deducted before they receive their paycheck), and then pays for all their expenses on what’s left.
The business owner or investor owns a business, earns an income, pays for all of their expenses (office, cars, phones, travel, courses, utilities), and then pays taxes on what’s left.
See the difference?
Even by just starting your own home based business you can begin to deduct some of your day to day costs as legitimate business expenses which will reduce your tax burden.
Disclaimer: I am not an accountant, and am not providing tax advice. Please consult with your professional advisors.
Wouldn’t you rather put more of your hard earned money back in your own pocket instead of sending it off to the government to let them squander it?
If you’d like to get started today reducing your tax burden and moving your Tax Freedom Day up earlier in the year, then I’d love to help you do that.
Have a look at the video by clicking the link below, and finally start earning (and keeping) the kind of money you deserve.