Americans have a long history of opposing taxation. The Revolutionary War pitted mostly farmers and small business owners against the greatest army on the planet at the time. The rag tag collection of non-professional soldiers drove that mighty army completely off the continent. Self-determination and taxation without representation was at the core of this remarkable rebellion.
After that war, our country survived for the next 137 years by taxing goods, both foreign and domestic. In 1913 the 16th amendment to the constitution was ratified which states “ The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” And with its passage began the practice of tax mitigation. Pay what you owe but only what you owe. Taking every legal and ethical measure to reduce your tax liability is an inherently American thing to do.
Since the passage of the 16th Amendment, the IRS tax code has grown to 6,871 pages. When you add tax regulations and guidelines, that number swells to about 75,000 pages. No one could reasonably proclaim to be an expert on every item covered in those 75,000 pages. More about this a little further down.
Now let’s discuss who actually pays all the income taxes in America. According to the National Taxpayers Union Foundation, the top 1% of income earners paid 45.78% of all the income taxes collected in 2021, the most recent data available. The income threshold to be in the top 1% was $682,577 for that year. The top 10% paid 75.81%. That number included anyone making $169,800 or more. The statistics then, are that 52.61% of all the income earned in the United States paid 75.81% of all the taxes collected.
Any discussion of taxation must include the reason the government taxes its citizens in the first place. The government does not produce anything. They don’t sell goods or services for a profit. Their only source of revenue is taxation. And while households must live within their means, governments do not. Our government has been in debt since the Revolutionary War. It took us 206 years to get to one trillion in debt but it only took 5 years for that to double. By 2008, just 26 years after hitting a trillion dollars in debt for the first time, the United States was over 10 trillion in debt. Then it only took 9 years to double again. And just since 2017, we have increased our debt by another 13 trillion dollars. And spending continues at a blistering pace.
So, what about revenue? How much does the government collect in taxes from all sources? In fiscal year 2021, the government collected over 4 trillion dollars in taxes for the first time in history. Early estimates for 2023 are for over $4.7 trillion dollars in tax collections, almost $700,000,000,000 more than just 2 years earlier.
Our government has a seemingly insatiable thirst for more money. And they know the only place they can get it from is the people who make it. When Bob and Dave met at a tax mitigation for retirement income conference in February of 2021, they collectively had over 60 years of experience in financial services. The vast majority of that experience was centered on wealth accumulation or wealth preservation. They discussed how tax mitigation had at least as much impact on high income people as return percentages. They decided to join forces to serve the community of income earners who bear this disproportionate share of the tax burden.
They knew that no single source could possibly have a handle on all 75,000 pages of IRS code, regulations and guidelines. They made it their mission to assemble resources all around the country that specialize in tax mitigation and cost reduction for specific circumstances. Their due diligence vetting process has led them to well over 20 affiliations that specialize in these various strategies for individuals and businesses with a significant tax burden.
If your annual tax obligation is 6 figures or above, a call to R&D Tax Strategists could be the most profitable investment of your time that you have ever made.