“I have a question for you.”
The voice on the other end of the phone call was Jose, the young man with the forty-thousand dollar tax bill.
“What’s the balance?”
“About a hundred sixty thousand.”
“Do you have that much cash?”
“Do you need the money to fund your business?”
“You’ve seen my bank balance. I have enough to pay off my house and keep the business funded.”
Based on the work I had recently done for Jose, I agreed with his assessment.
“You’re the tax guy, and tax guys say mortgage interest helps my taxes. What do you think?”
“Well, you paid six thousand dollars in mortgage interest. That saved you about two thousand dollars in taxes.”
“So, it isn’t that good of a deal?”
“You’re a businessman. This isn’t a magic trick. You paid six thousand in interest to reduce your tax bill by two thousand. It’s pretty obvious to me. We are programmed in our country to think that mortgage interest is a great tax deal. You’ve only been here a few years so you’re not programmed and you’re just looking at the numbers.”
“The numbers say mortgage interest isn’t a good deal. I’m paying off my house.”
“That’s what I would do if I were you.”
“Thanks for your time.”
As Jose hung up the phone, I thought about how his attitude about money was simple, logical, and free.
He recognized that reducing taxes was important.
However, it was secondary to reducing overall expenses.
He was grateful to pay taxes because, to him, it meant freedom.
Therefore, taxes were not to be avoided at all costs, especially if avoiding taxes was more expensive than paying them.
My interaction with Jose brought a sense of conclusion to my search for the peaceful response to taxes.
As I considered the risks involved with doing business with banks and other financial institutions, I noticed that tax breaks are often used as carrots to get us to do something we otherwise would not do.
As I investigated tax deductions, I realized they are used to encourage poor decisions in the areas of education, religion, medicine, investments, and wealth building.
I realized their lack of resistance to paying taxes was a key to their abundance.
I came to understand that paying taxes is one way of demonstrating the concept of unity.
Furthermore, paying taxes is congruent with the definition of ownership that says we pay for the privilege of caring for and releasing the “possessions” in our lives, as opposed to becoming attached to them and attempting to control them.
My experiences and new understandings over the past few weeks have demonstrated that the tax system has flaws. It is used and manipulated for the benefit of the few.
However, with awareness and wisdom, it may still be used, even in its imperfection, to work towards a peaceful society.
I’m sure I’ll return to this topic in future articles.
For now, there is something looming in the Far East and on America’s western horizon that needs to be addressed.
I’ll write about the threat from North Korea tomorrow.