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Protecting Me from My Own Government
I should never post when I’m angry or drunk. But if I followed that rule, I’d never post anything, so there you go. But anyway, I just got off a conference call with, um, I’m not sure who, exactly. So, um, let me explain. I use “Chip” who works for “EF Hutton” to manage my retirement plan. I’m blessed with a high income (after decades of building up to this point), but I’m 52, and after decades of reinvesting everything I have into building my business, I need to save some money for my retirement. So “President” Biden proposed some tax legislation that has financial advisors all over the country completely stressed out. So my buddy “Chip” calls me, and says my 401k won’t be sufficient – I’ve got to do something else to keep my income below a certain level, and that is likely to be very important. If “President” Biden’s proposed legislation actually goes through. Which they think it will. So “Chip” calls “Chris” who gets someone to suggest that “Chad” call me – “Chad” works as a sort of liaison between ”Chip” and “Chris” and “EF Hutton” and “various record keepers” to “build” “retirement plans” to “create tax savings” and “maximize opportunities” while “keeping fees down” and “ensuring regulatory compliance.”
I just got off a phone call with Mayo explaining that one of my patients was about to die, and there was nothing I could do about it. And then, with “Chad”, I have a very long phone call. With someone I’ve never met, who does something I don’t understand, who apparently will help me “achieve my goals,” which really are pretty simple – I just want to save some money. My own money – I want to save some of my own money. And I earn a good living, but I’m not Mark Zuckerberg, for Pete’s sake. And after that phone call, I think that there will be at least four (possibly five?) multinational financial corporations involved in my efforts to save some of my own money. It was a long phone call. And I don’t understand what we talked about. I asked questions about concrete realities, and “Chad” answered in code. A sort of code that used vague terms which may mean something to other people like “Chad,” but means nothing to me, whose success is measured in things like ‘how many of my patients are breathing today?’ “Chad” probably felt like he was trying to explain differential equations to a Bassett Hound. And I’m the Bassett Hound. Which is why I’m angry and drunk.
I have a simple job. My patients pay me money to prevent them from becoming dead. I then put that money in a bank account, and use it to pay for groceries and electricity and bourbon and other necessities. Despite my simplistic finances, I hire an accountant to prepare my tax returns. Which are over 100 pages long. He gives me an envelope with over 100 pages of God-knows-what in it, and he says, “Be sure to read through that before you send it in.” As if I could decipher even the first page. I’m a really good doctor, but I don’t understand tax law. So I hire my accountant named “Chris.” Who recommends somebody who recommends “Chip.” Who calls somebody who recommends “Chad,” who recommends working with companies who advertise during golf tournaments, so that I can save some of my own money. And I don’t understand what any of these people do. And this is my money. And, technically, my country. And my government. Pretty much, I thought. After a fashion. Which is passing laws I don’t understand which require me to hire people I don’t know who work for companies I don’t understand to do something that makes no sense. All so that I can save some of my own money.
A communist (or even socialist) government controls people because it owns the means of production. A fascist government does not want to own the means of production, but controls it via regulation, taxation, and various other punitive measures.
I’m being controlled by my own government, by rules that I don’t understand. So I hire people that I’ve never met, to do things that I don’t understand, to follow laws that make no sense, in preparation for legislation that has not yet passed. But it might. So I end up drinking while I talk to “Chad.” Or possibly “Chris.” It doesn’t really matter, I suppose. Whatever.
I’ve spent the last 30 years devoting countless hours to becoming the best doctor I can be, while “my government” has been developing ways to discourage me from doing that, while planning out how to penalize my possible success. If I should happen to succeed, against all odds. If I don’t succeed, they’ll penalize whoever does. My government is open-minded, on matters like that. No matter who wins, “my government” wins.
But I take all the risk.
But despite all that, I press on, because I feel like I ought to. I think my work is important. I reinvest everything I have, gambling on my own success, over all my competitors. While my own government waits to take the winnings from whoever comes out on top. Whoever.
Just in case I happen to succeed, I hire professionals to protect me from my own government.
Although, regardless of who succeeds, both “Chad” and “Chris” probably drive really nice cars. Because they’re good at something that I don’t understand. And something I try not to care about. So, like “my government,” whoever wins – they win.
And if they ever get sick or old, they’ll hire me. To do something that everyone understands. But that not everyone can do. Because it takes years of investment and sacrifice. Which is currently discouraged by “our” government.
There is a reason that some people are freaked out right now. This is no joke.
There is a great article in all this chaos somewhere. Which I hope will be written by someone other than me. Whoever writes that article, I thank you in advance. But it won’t be me.
Because I have some serious drinking to do. Because this is my life. And my risks, and my years of hard work. And my hard-earned money. And I’ve lost the will to fight. I just want to do my job. I’ve lost interest in, um, whatever the heck is going on here.
Which, I think, is the whole point of all this. Encourage them to keep working. And discourage them from thinking.
Sign me up, I guess. I’ll be happy if I’m just allowed to do my job. I’ll try to stop thinking.
I’ll leave that to “Chad.” Or possibly “Chris.”
Whatever.
Published in General
The whole point of government is that you can’t protect yourself from it.
A very discouraging post, Doctor. But, unfortunately, accurate.
Yes.
Don’t hire accountants, or at least not that accountant.
Don’t forget how E Warren got rich: she was hired by the government to write regulations. Then she pimped herself out to banks teaching them how to comply with the regulations she wrote.
There’s plenty of opportunities to become a millionaire; sadly my family chose “honest work”.
Doc, take your story; be born 13 years earlier; and be out of work.
It can always be worse.
I’ll offer some financial advice (note, I am just winging it). I think you should avoid foreign schemes. I think you should try to level your income (your peak years will only last a decade). You might be able to do this by re-investing in your business with things that can be sold later. Doesn’t your waiting room need a rare painting? How about property? What is the end game for you practice? Do you have a young doctor or two that can buy you out or provide income while you “supervise” from a golf course?
I’m with the IRS and I’m here to help.
You can trust me.
I feel your pain Doc … now you know how lots of us feel when we talk to our physicians.
If your physician starts to steal a large percentage of your income, you should seek another physician.
Why would a government that’s acting in our best interests have a tax code that’s over 4,000 pages long?
Answer: Because it’s not acting in the best interests of the people.
Most organizations flip from being focused on providing the good or service that has value to their customers, at some point, to being one that, in parallel, starts focusing on its own self-benefit. Since the government really doesn’t have customers, it answers to no one, and this creates the most hideous of conditions where a huge entity with the power to tax and jail you is literally held back by nothing.
Ask Lois Lerner. You can, because she didn’t go to jail. For meddling in a presidential election. From one of the most powerful of government entities in existence: The one that has the power to take your money from you by force.
You are right, it is extremely rare to find a person who should ever write when he’s angry or drunk. Not completely unheard of, though.
How would I know if they are stealing? I don’t understand what they are doing or why or what the prices ought to be. To you and other doctors it’s science. To me and many patients it’s faith. The same way you feel about Chad and Chip and Chris and EF Hutton, I feel about my cardiologist and gastroenterologist and pharmacist and my insurance company. They have a conversation between them about my body, my health, that I don’t understand. And then charge me an eye-watering amount of money.
Maybe Chip and Chad and Chris and EFH are just doing something that everyone understands (making money make money with minimum tax) But that not everyone can do.
I understand what you are saying here, but it’s not the way it should be. Tax law should be transparent to those paying the taxes.
I have a different relationship with my car mechanic and my doctor.
That said, financial advisors and accountants are on the taxpayers’ side. Without them, we’d all be sunk.
“The power to tax is the power to destroy” – John Marshall
Been there. Done that. Suspension.
Christopher Hitchens was pretty much drunk all the time and wrote beautifully right?
This is like saying I’m Michael Jordan because I occasionally hit a jump shot.
I talked to our accountant yesterday about capital gains (something we’ve never had to worry about). He said the current rate is 15% and the gov lets you have the first 500K tax free. Biden is proposing raising the rate to 28%!! Which is insane and why companies went over seas, and were trying to skirt the tax issues and find loop holes. Trump gave incentives so industry and new businesses would be created here, instead of over there. Now Biden, like the wall, is trying to un-do it. The liberals look at it as “the rich paying” their fair share. But if you earn it, you are being penalized out the tail. I understand why people have offshore accounts etc. It’s wrong.
Doc – you are correct – that is fascism. By the way, all these C names? Maybe find a new accountant with a different initial….and talk to your other doc buddies and ask what they’re doing.
The capital gains thing is worse that that – it’s not really earned, it’s risked. You invested in an asset, stocks, real estate, whatever it is, and the earnings on top of the risk you take get taxed. Remember that the asset, when you purchased it, was bought with income that has already been taxed. Now he wants to double what amounts to a penalty for successfully risking your capital, and that’s called “fair share”. That’s just a selling point for the idiots who think that the rich just skirt by and pay no taxes, when the opposite is literally true – the rich pay 97% of all income taxes collected.
We’re just being walked over by the polity we let ourselves metastisize in DC and in the states and local governments. At least locally those folks are very directly responsible to the people they are there to serve, and I think are more responsive. But tens of trillions in debt that we soon won’t be able to serve the interest payments on is all based on the lunacies we put back into congress every few years.
Trump called them all out on this. Which is why he was labeled the way he was, and Covid blew up a screaming recovery that would have put him back in another 4 years. Weird how things turn out.
True, but I tend to see it as “your own government” being a hired gun by those up the ladder a few rungs (who hire the very best and well connected “Chad’s”) and their voting army down the ladder from you several rungs (who will never have the need to bother meeting a “Chad”) who they manipulate / use to make sure the rule book is always at least one chapter ahead of your possible understanding.
I have participated in my 401K “plan” for 30 years now…I have never assumed for a single second that they wouldn’t change the rules before I got to the end of the road so as to make that “investment” irrelevant to the retired me.
This is really screwy. There has to be some crony capitalist in Washington who is selling this idea for his or her personal gain somehow.
Ronald Reagan created more wealth in America than any leader has ever accomplished in human history. With a stroke of his pen, he blessed the establishment of individual retirement investment accounts (IRAs) and real estate investment trusts (REITs).
We need some political strength in Washington.
It’s a bad sign if he cannot explain things in plain language, more so if he makes no effort to guide you to materials that will explain things clearly.
Those aren’t simplistic (did you mean simple?) finances. It takes me about an hour to do my tax return.
People don’t understand that there are certain professions that have the flexibility to adjust income as necessary to lower their tax burden. While the uber-wealthy have their mechanisms, people who would be considered upper-middle class have theirs. Biden isn’t going to touch the wealthy – he’s going after the middle class in its entirety because that’s where the bulk of income is earned. Sure, the wealthy and high-income earners pay most of the taxes, but politicians (and Democrats in particular) salivate at the prospect of tapping more income from the middle while billing it as “taxing the rich” . . .
Good to remember when the Warren Buffett’s of the world open up their smug yappers in support of Biden’s policy…
Somehow, I don’t see this happening. /:
There’s a reason Warren Buffet never, in spite of his friendship with Bill Gates, never invested in technology. He didn’t understand it.
My unsolicited and decidedly non professional recommendations.
1. Put as much as you can into a tax sheltered IRA/401K/SEP, whatever is available to you. Your accountant and your attorney will know which you can use.
2. All your savings should go 50/50 , tax advantaged or not, in no load mutual funds of federal government bonds and a broad market index of stocks such as the S&P 500.
3. Rebalance once a year to maintain your 50/50 mix.
https://couchpotatoinvesting.com/about/
1. Congress is lazy. Details and clarity require work. Instead, statutory provisions start with “The Secretary shall…”, the Director shall… or “the commissioner shall..” which means the actual law is what the agency thinks it ought to mean even if that isn’t what those who voted on the statute thought.
2. Congress wants to appear to be hard on “the rich” but that includes the people who fund election campaigns. So instead of a flat rate they festoon the multiple rates with “just kidding about that tax” breaks for groups and individuals who invest in lobbyists. The 1986 tax reduction and simplification was opposed by lobbyists who did not their handiwork undone nor did they trust Congress not to return to higher rates.
3. Complexity and ambiguity makes enforcement difficult and subjective which in turn enhances the value of expert sherpas who study agency behavior. There is no science to an old Roman temple priest reading bird entrails. All that matters is his perception and motivation.
4. It may look like Congress is acting to enhance the incomes of CPAs and investment brokers. But lions don’t care if they are helping vultures.
What he didn’t tell us, but should have, is that the power not to tax is also the power to destroy.
I don’t get your meaning.