Tom Wheelwright CPA is the visionary and bestselling author behind multiple companies that specialize in wealth and tax strategy. Tom is also a leading expert and published author on partnerships and corporation tax strategies, a well known platform speaker and a wealth education innovator. Tom is a regular commentator and contributor to publications such as Forbes, the Huffington post, ABC news and more.
Tom Wheelwright CPA is the visionary and bestselling author behind multiple companies that specialize in wealth and tax strategy. Tom is also a leading expert and published author on partnerships and corporation tax strategies, a well known platform speaker and a wealth education innovator. Tom is a regular commentator and contributor to publications such as Forbes, the Huffington post, ABC news and more.
He’s also. Trusted as the personal accountant and business partner of Robert Kiosaki, who we know as the author of rich dad, poor dad. I’m looking forward to this discussion today, Tom. Welcome to the run G podcast. Thanks, David. It’s great to be here with you. as I was saying earlier, You know, on the show.
We do have, you know, entertainers, influencers, business builders, entrepreneurs, and they have these, you know, these lengthy elaborate, bios when we go through them, yours is more simple when it could be much more complex considering the subject material. Right. but then I take a look at your, your website and your mission statement says my goal in life is to make taxes fun, easy, and understandable.
I really love that. it’s such a refreshing. Take on something that can be complex and stressful. So the first question, Tom, again, did you see a need to make taxes simple and fun? Y you know, Albert Einstein’s quoted as saying that the most difficult thing in the world understand is income tax.
And, but he’s also quoted saying. Any six year old can explain something to a genius, but it takes a genius to explain something to a six year old . And so, you know, I love, I love taxes. I love the tax lie. I’ve been doing this for 40 odd years. And to me, what would be more challenging than to take the literally.
Albert Einstein says the most complex subject in the world and make it simple. And, you know, I say, simple and fun. I can actually prove it’s fun. if you’ve ever received a refund and you look right in the middle of that word, refund is fun. So we love refunds. so that’s, that’s how I can prove that taxes can be fun when, when it’s a refund.
It’s, it’s fun. That’s when it gets exciting. That’s incredible. I, I never thought of that. That’s, you learn something new. It does say fun in that word. so yeah, like how do you do that? Like, what’s the process like wealth is, you know, when we talk about receiving a, you know, a dividend, you know, a refund that is fun, but how do you make taxes fun?
Like how do you approach that? Well, well, well, first of all, you have to really look at what’s the tax law really all about mm-hmm right? Because. Everybody’s afraid of it, just like they’re afraid of finance, right? People are afraid of finance. That’s why they turn the money over to wall street. that’s a mistake too, but people are afraid of taxes.
And so they go, well, I’m just gonna let my guy handle that or I’m gonna let my, you know, my CPA handle that or, or my, my CA or whoever is gonna handle that. I’m gonna let them handle it. And I’m going well, what if you actually understood how the tax law really works? and rather than being this. Onerous, way that the government raises revenue.
The, the first thing we have to realize with tax law is that it’s fundamentally a bunch of incentive. And that’s all it is. I mean, literally there is one line that says all income taxable, unless we say it isn’t another one says nothing’s deductible, let’s say it is. And most of the rest of, in the us, it’s about 6,000 pages and candidates about half that and great Britain it’s twice that, most of the rest of the law is really just a series of instructions about how to reduce your taxes.
And so once you see up for what it really is, This is, you know, the government’s way to control the economy control investment to encourage investment. Once you see it from that, all of a sudden, you know, the light can go on and go wait a minute. I like the idea of a roadmap to reduce my taxes. I don’t like the idea of somebody coming to collect taxes.
So let’s get into the theory a little bit then if that’s okay. I I’ve heard you say that, you know, no matter your income, you can legally pay no taxes without cheating. Can you break that down for us? Maybe just unpack that a bit. Yeah. So, okay. Let me, let me give you some simple examples. you think about what does the government want to have done?
Right? So the government says, well, look, if you buy a home, that’s a good thing. If you rent a home, that’s not as good. Okay. So if you buy a home, we’re gonna give you a tax deduction. But if you rent a home, we’re not. So what’s the government saying the government’s saying, go buy a home. We’ll give you a tax break.
If you buy a home, the government says, look, if you hire employees, we’ll give you tax breaks. If you are an employee, we don’t give you tax breaks. So as that tell you, it tells you that the IRS wants you to hire employees. Tells you want you, they, they want you to create jobs. So really the key is just look at what is your government.
Doesn’t matter what country you’re in. What does your government want? Done? and do it and, and chances are, there’s a tax incentive behind it. I mean, this started in the fifties. president Kennedy was the first, us president to really hone in on the use of tax incentives as a way to encourage certain economic activity.
And every president since then, and every leader around the world has done it since then. So I, you know, I’ve traveled with Robert, 30 countries. All six, you know, six continents. And I always look at the tax law before I go or while I’m going. Right. Okay. What’s the tax law in, the UK, what’s the tax law in Romania.
What’s the tax law in Australia. It’s, they’re remarkably similar, actually my new book, we actually look at 15 different countries and analyze the, the, the incentives between 15 different countries. And what we find universally is that. Once you kind of key on, on, all right. What are the government’s priorities then?
Now all we have to do is say, well, look, if we invest that way, we’ll get tax breaks. And one of the really simple ways, no, I like to make it easy. Yes. So one of the simple ways think about it is the more money I make, the more tax I pay, the more assets I build, the less tax I pay because the government wants you to build wealth, not earn.
That’s the incentive. The incentive is to actually build wealth. There’s a disincentive to earn money. Very interesting. I love that breakdown. That is very simple. I guess when you look at the broad stroke of what governments are trying to accomplish the rules, and the are inside of those right. Is kind of what I’m hearing here, but what do you say to people who say you can’t do that?
Only the rich who have teams of accountants. Can figure out ways not to pay taxes. What do you say to those people? Well, I, I, I, I say you need to turn that inwards and say, no, you can’t do that. I can do that, but you can’t. Okay. It, it, what I would say is, you know, if you’re not willing to learn, if you’re not willing to grow, if you’re not willing to discover, then you’re right.
You can’t do that. but somebody’s doing it right? So the rich do it because they don’t have to learn it because they do have these legions of accountants and, and attorneys and so forth that are working on it for them. And, I, I work for some of those people , but. The average person can do it. If they simply understand how the tax law works and, and really you kind of have to simplify it.
So basically what I do is I always look for patterns, right? How can we predict the weather? Because we understand weather patterns, right? So how can I predict that somebody can get to zero tax? Well, I understand the tax patterns. So all I’m trying to do is explain the patterns. Here’s how the patterns work, follow the patterns and don’t pay any tax.
The rule, at least in the United States. So we at the us constitution. We have an equal protection clause in the constitution, which says that you can’t just benefit one group of people. You have to benefit everybody equally. Okay. What that means is that you can’t make a tax law that applies to one group of people that doesn’t apply to everybody who’s in that exact same situation.
So if you take a business owner, whether you are, just starting out or whether you’re Elon Musk, okay. You’ve got the same laws available to. The question is, are you willing to learn those, you know, what those laws are and are you willing to apply those laws to your situation? Elon Musk is Jeff Bezos is a lot of people aren’t I actually find, you know, there’s been a lot of talk about the rich cheat right now.
I actually don’t find that. I find that it’s. Primarily the small business owner that cheats. And I think it’s because they don’t know how to reduce their taxes otherwise. if you knew how to reduce your taxes legally, you’d do it legally. And, if you knew that what you were doing was something the government wanted done, then you wouldn’t feel guilty about it either.
And, you know, we’re, we’re not talking about loopholes here. Are there loopholes? Absolutely. Those are unintentional. Did the rich find those? Absolutely. That’s not what we’re talking about. We’re talking about. you know, bread and butter stuff that anybody can do. Anybody can in invest in real estate.
Anybody can, can invest in an Airbnb. Anybody can invest in ener any energy. Anybody can put solar on the roof. Okay. Everybody can do that. Now the reality is everybody gets tax incentives. They just don’t, they’re just not thinking about it. You send your kid kid to college, you get a tax break, you buy a house, you get a tax break, right.
You start a business, you get a tax break, you in the us, you adopt a child, you get a tax break, right. You have a child, you get a tax break. Right. Australia’s the same way. So, you know, you. You’re getting the tax incentives. It’s just that you’re saying, well, look, my incentives are good and your incentives are bad.
And why don’t we just say, look, incentives are incentives and you get to choose whether you, I, I kind of think of it as we’re all partners with the government. Mm-hmm right. You can be a silent partner or an active partner, but you get to choose. You wanna be a silent partner pay tax. Great. You wanna be an active partner, not pay tax also.
Great. Yeah, that’s a fantastic way of looking at it. You’re in partnership with the government. And I also, you know, it might be interesting to track, how the adoptions go up after listening to this episode. Right. But, during the presidential, campaign or, yeah, the presidential campaign, Donald Trump was a guy who was vilified for not paying federal taxes.
if, if you’ll remember there was a viral clip. Yep. A debate with Hillary Clinton attacking him for not paying taxes. And he. That makes me smart. Right? Thoughts on that? Well, not on that particular line. I, I’m not gonna comment on the political, but here’s, what’s interesting. Exactly. Almost exactly four years later, there’s an article in the New York times saying we got a hold of 15 years of Donald Trump’s returns.
10 out of 15 years. He paid no tax two years. He paid seven $50 of tax. And then of course, three years, he actually paid some serious tax. And on top of that, He’d gotten a 72 million refund from the government. They were fighting over it, but that’s the refund. Okay. So, you know, some people would say, well, that’s unfair.
Other people would say, well, how do I do that? Right. And, and I actually look at, when, when that first debate happened. I mean, I had, reporters call me all the time. Okay. What do you think about that? What do you think about that? What do you think about that? And I’m going. Given what Donald Trump does for a living and given the amount of debt he uses.
If he pays taxes, he’s got the dumbest accountant on earth. That’s it? I mean, seriously, it’s it’s, it’s not cuz he’s smart. It’s because he does what the government wants done. Okay. He, he, he, he, he builds businesses and, and builds real estate. Government wants that to happen. Therefore. The government gives him incentives.
He doesn’t pay tax that 72 million refund came from 400 million. He earned on the apprentice that he put into real estate. Got a refund for putting it into real. There you go, anybody can do it. Yep, exactly what you said. Right? They want you to build, wealth, right? Yep. through assets. Interesting. Now this is all explained in your best selling book tax free wealth, which is number one in its category.
A decade later on Amazon can tell readers what to expect when they get that book. Yeah. So it’s, I like to say it’s the rich dad port out of tax because it’s kind of a prime. Right. Like rich dad, port dad is a primer on entrepreneurship. Right. And tax free wealth is a primer on tax and it doesn’t. I’ve had people in Romania.
I’ve had people in great Britain. I’ve had people in South Africa say, this is a great book, Tom. Yes. I know that you’re using the us’ as example, but it absolutely applies here. I was literally on the stage in South Africa with the south African chartered account. And I said, and I took one of my, the strategies from tax free wealth and I, I put it out there and this was, employing your children.
And, I turned to the accountant, I said, and she’s, she’s smart, smart woman, good accountant. I turned to her, I said, could you do that in South Africa? And you could just see the light bulbs going on. She goes, well, yeah. And you could tell that she had not thought of that. But you absolutely could do it.
So, it, it, it’s just one of those things. This is kind of, this was actually written for the average person. This is not a, not written for your accountant. Although I guarantee your accountant should read it. interestingly enough, I’ve never had an accountant say anything negative about it. Not even once.
so that’s nice, right? it’s really meant to be just, that tax 1 0 1 really simple stuff. I had somebody tell me it was a great beach read. Somebody else told me that it read like a SP novel. I, I, you have to be pretty nerdy for you to think tax re results reads like a SP novel, but I’ll take it.
Yeah. Well, you know, the, as you said that the principles are universal. So, yeah, if we pick it up, I, I, I know what I’m gonna be looking for. when I have not, disclaimer, have not read it. I’m looking forward to the new book, which we’ll talk about in a moment, but what’s it like being the personal accountant and business partner of Robert Kiosaki and how did that relationship happen by the way?
I, I, I love Robert. Robert is I think the best financial educator in the world, he simplifies it. we’re on stage together. I mean, literally we’ve traveled all over the world together. We’re on stage together and he will literally, we, we have 2000 people in the audience and he will say, Tom, that’s too complicated.
You can’t talk about that. And he’ll just like, yank me. Right. And say, here you go, sit down. Let’s make it simple. And, and so I’ve learned so much about, how to, you know, how to make things simple, how to keep it simple, how to educate it. And we, you know, we learn from each other. So it’s actually been a, a terrific, relationship.
He’s a, a great educator and I, I, I’m a great student, so it works well together. It, it works great, but we’re really, we’re just very good friends. I actually met him. I had a business partnership fall apart, and my partner took about 40% of the clients. So I had, and all the staff stayed with me. So I had a choice.
I could fire half my staff, or I could go find more work and I chose to find more work. And I went and bought a CPA firm and one of the clients happened to be Robert Kiosaki so true story. That’s how I met him. Oh, wow. Very interesting. okay. I just wanna focus on real estate for a moment. A lot of our listeners and subscribers are in that industry.
Of course, we own a real estate, firm in Canada here, currently expanding to the United States. But what should agents. Agents real estate agents. We’re talking to real estate agents just for a moment. What should they be? Advising their clients, with regards to the purchase or sale of properties and houses, anything off the top of your head you can think of.
Yeah. Yeah. First thing is, is that if it’s for personal purposes, the laws are completely different than if it’s for rental and the, the rental, the, the tax benefits for rental properties are enormous. There are some tax benefits for personal. typically you don’t pay tax. When you sell the house, you get to deduct your interest up to a certain amount.
You know, you might get to deduct some of your taxes, et cetera. but the real incentive is in the business. And so, really, the question I’d always ask the, my, my client there would be, are you an. Or are you buying this for personal purposes? Because you know, you, if you’re an investor, you need to make sure.
Okay. Have you talked to your accountant about this? Have you got, you know, where, what kind of are you buying it personally? Are you gonna put it in an entity? How are you gonna set this up? if you’re selling it. Do we need to do a light kind exchange, which is that a non-taxable exchange that we do here.
you know, how much depreciation are you gonna get? And, both in the us and Canada, you can do cost segregations to get more depreciation. so it really depends so much on, are you an investor or are you gonna be a homeowner? Because the tax consequences are completely.
Okay. Now, now talking about the real, the business of the real estate agent, most of them are sole proprietors, independent contractors.
What should they be thinking of when it comes to their own personal real estate business and taxes? they’re insiders. And my question is so most real estate agents don’t even own their own home. it’s fascinating. They don’t own any real. They’re basically salespeople and I’m going you actually, especially if you are an owner in your company, in the us, you have a very two big advantages.
One is from a tax standpoint, you’re considered a real estate professional, which means that you don’t get limits on the amount of real estate losses you can take. And the segment is you’re an inside investor. In other words, you see these good properties before anybody else. And I’m always amazed because I actually have some pretty big name people that are, clients of ours or, or in, in my network.
And, that have like lots of different real estate agencies. And I’ll see people who come in and I’ll ask them. So how much real estate are you buying? Well, none. A tax, you paying a lot. Okay. Well, alright. Maybe those two are related to each other. So maybe buy some real estate and don’t pay tax, right.
Because that’s kind of the option and you’re the insider that you can’t do this in the stock market. You, you know, you go to prison for being, you know, right. Insider trading. Right. You can’t do that in real estate. You can. It’s an unregulated market. So why aren’t you doing this? Why aren’t you investing in real estate?
I, I had a, a real estate inve literally he taught real estate and he tells this story. So it’s not, it’s not private. He taught real estate. One of his goals in life was to pay million dollars in tax. And when he told me that I said, wait, wait, wait, wait, wait, no, no, no, no, no, no, no. And I said, so I’m looking at your stuff.
I’m going, you teach a lot about real estate, but I don’t see that you’re owning a whole lot of real estate. I said, you need to go out and buy some real estate. We literally took his tax bill from a million dollars one year to zero, the next and the result was he had a whole lot of real estate that he didn’t have before.
So he built his wealth and reduced reduces tax all at the same. some fantastic thoughts there. I hope everybody’s paying attention, taking some notes. So just a question on, wealth, building those in commission sales, again, sole proprietors, independent contractors. Mm-hmm what should they be thinking about when it comes to building long term wealth?
Any strategies you can think of? A couple of things, first of all, they need to be thinking about how they own their business. Okay. Because what type, whether you own it as a sole proprietorship, whether you own it as a, as, a cor in a corporation, remember those are the things that the rich use to reduce their taxes and you can use those two.
So that’s, that’s the first thing is how am I gonna own my business? that’s, I actually find that. The, the tax benefits of that can be enormous and they can be enormous very quickly. Okay. So that’s the first thing to be thinking about the saying is, okay, what am I gonna do with my money? So the first question we ask every.
New client is what are you gonna do with your money? And I would tell you that 98% of the time says, I don’t know. So what we do is actually we actually, this is about 15 years ago, we kept getting that answer and I said, well, then we need to actually develop a way up a pattern for them to follow so they could figure out what to do with their money.
And so that’s what we call a welt strategy. And. What we do is we look at, okay, how do I wanna be investing in, what do I wanna get good at? What do I wanna focus on? Because you don’t make money by diversifying, okay, that’s the way you keep money. That’s not the way you make money. you, you make money by being specialized.
You make, and niche will make you rich, right? That’s how you make money. So you, what are you gonna do? What do you wanna do? So we just kind of guide them through that. Once you figure that out, like I was, before. Before this, interview, I was, talking to a prospective client, makes a lot of money and I, and he asked me, he says, so, you know, what, what do you do from a tax standpoint?
He said, I don’t know, what do you wanna invest in? And he starts telling me these investments and I go, okay. So we need to look at every single investment, look at what you’re doing, because we never want the tax tail to wag the investment dog. Okay. So taxes come second. Wealth building comes first and, and you always have to remember that is the order to things.
So basically there’s, there’s four things you have to look at. you have to look at the wealth, you have to look at the tax. You also have to look at the asset protection because the minute you start building wealth, you have people who want your money. And so you need to set it up. This is why you need lawyers.
Okay. So that you can set it up. So, so people can’t get, or you make it hard for them to get the money. Right. And then the other thing you have to look at is your legacy. I mean, if you’re really gonna build a lot of wealth, what are you gonna do with it when you die? And you better bring that legacy in early because, that’s gonna have an impact on your tax consequences as well.
So we look at all four of those. When we look at, when, when we’re working with a new. it’s fantastic. I mean, we can’t get into all the details there, but great thoughts. I really appreciate that. I do want to talk about, something that, you know, we talk about all the time at our company, which is the Bitcoin, crypto blockchain space.
we’re a company that does transact in crypto, residential and commercial real estate in cryptocurrency. We’ve been doing that for a while now. I think we’re. One of, if not the only brokerage in Canada that does that. but first of all, your, your thoughts on the space as a whole, what do we need to be aware of when it comes to crypto and taxes?
Like what don’t we know that we should, any thoughts there? Well, I think, I think we know less than we know. Okay. That, that, there’s actually a lot, there’s a lot more, we don’t know than what we do know. what we do know is, is that crypto is property. Okay. So we don’t have a lot of guidance. Governments have not given us a lot of guides cuz they don’t know.
And so we have to look at kind of the general principles. So once you look at, once you understand the patterns of the tax on the general principles, this is what we talk about in tax free. Wealth is now you can say, okay, well, all right, if this is the general principle, then I can apply that to crypto unless they tell me I can’t.
So for example, if crypto’s property, that means anytime I sell or exchange. Okay. That’s the key sell or exchange crypto. I have a taxable transaction. So that means that if I use my Bitcoin to buy a property from you, and then I have sold my Bitcoin. Right. And, and the, and the value is whatever the value is that I paid for the house.
Right. Whatever the, the dollar amount is that I paid for that the, the property. So I need to report that gain or loss on my tax return. I think the most, difficult thing for crypto users is the recognition that you don’t have to sell it to be taxed on it. You just have to exchange it. And, you can’t exchange.
And there’s there’s no non-taxable exchanges. Okay. If you exchange Bitcoin for Ethere that’s a taxable exchange. Right. So you, you have to recognize that. And, and I think the tracking is the hardest piece in, in the us. they’re gonna start requiring tracking, I think 20, 23, they start requiring tracking by the, you know, river and, and Coinbase and all those people are gonna have to exchanges.
Yeah. The exchanges, but for now you have to track it yourself. Mm-hmm okay. The other thing to recognize is that, okay. What if, think about all these other transactions? So you’ve got mining. Staking defi. Okay. So when you look at those different ways that you make money in crypto, you have to look at, okay, what’s the tax consequence.
And since there’s no rules on it, then what you have to do is, well, there is on mining in the us, but there isn’t on any of the other stuff. What you have to look at is, okay. So what are the general principles? so for example, mining versus staking, I always look at, I always look at analogies, right?
So mining is really like mining, right? I, I, I mind Bitcoin, I’ve got Bitcoin and now I have something that nobody else has. I have that Bitcoin. Right. And nobody else can have it. So I do have value there. And the I in the us, the IRA says that’s taxable to you. Okay. But what about staking? Well, staking is actually more like a stock.
So in a stock split, do I pay tax? Nope. Why not? Because my value’s not really increased. I just, we just got more, you know, so I, I staked Ethere so I, so now there’s more Ethereum. It’s not like I took something that was limited. Right. Like Bitcoin Bitcoin’s limited. Em’s not limited. So now I’m staking. So now do I have tax?
And actually there’s been a recent court case that indicates that probably not in staking. And so, you know, this is why you have to really understand the general principles. And this is why I think it’s so important that people get the basics of how does a tax actually work because yeah, you’re still gonna go to your tax advisor.
You’re still gonna have their help for the details of it. But the reality is I can’t change your tax. I can just tell you what you need to do to change your tax. I always, I always like to say, if you wanna change your tax, you have to change your facts, but I can’t change your facts. My job is to ask you the questions so that I can tell you which facts to change so that you can pay the least amount of tax possible.
Given what you wanna do. Yeah, all fantastic thoughts. you kind of brought it up, but have you been following the XRP ripple S E C case? at all? just a little bit, but remind me, well, I just, whether it’s a security or not, and there, I mean, yes. Right. Thoughts on that. So it’s an interesting question.
You know, what is crypto? Right? I is, is it a currency? Is it, is it a security? What is it? You know, Ethereum actually acts more like a security Bitcoin acts more like a currency, frankly. and we’ll see, we, we know Bitcoin is currency it’s it’s, it’s, it’s their, it’s their base currency. So, it that’s a, it’s just something to watch.
I know, I know cur cuz currency transactions are very different. You know, currency has its own. Rules in the tax law and, stock has its own rules in the tax law so far, at least in the us. the IRS is treated at more like stock mm-hmm in currency. Mm-hmm yeah, it’ll be interesting to see how the, how that plays out, how the dust settles.
Right. and you know, this might not be your, your wheelhouse or your wheel. Your wheel, right. what are your thoughts on the, the defi space? How it’ll affect the financial services industry? I, I, I love it. You know, I love anything that’s decentralized. I lo I here’s what I love about, blockchain. I blockchain’s really triple entry accounting.
Right? That’s all it is. It’s basically your two entries and then you have somebody verifying your two entries. And that’s why I love everything about blockchain, because now you have a transaction that has been audited by every other transaction, you know, it’s correct. All right. And so, I think there’s just so many positive uses of that.
And defi is an interesting one. I think defi is so interesting because here’s an analogy. Let’s say that you’re an, this is a good real estate analogy. Let’s say that you are, you’re an investor, but you don’t know much about real estate, but you have a really good credit score. Okay. And so what you do is you get with somebody else who is really good at real estate, but they have a bad credit score and you use your credit score to buy the property.
Basically you’re lending your credit score to buy the property. Well, the little like defi, I mean, you know, there’s some defi transactions that almost are exactly like that. Right. You’re basically letting them use your Bitcoin as security for this loan. Okay. Well, okay. So you’re getting paid for. What are you, what are you gonna get?
What are you getting paid? How are you getting paid for that? so it’s, I, you know, I think it’s fascinating, stuff, but, again, I, I just don’t think once you understand the transaction, you can then apply general principles to it and you should be fine. That’s fantastic.
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Okay. let’s talk about the new book for a moment. the win-win strategy, seven investments. The government will pay you to make in the book. Do talk about a new level of consciousness for the average person and how you want to enlighten everyone and how tax benefits are incentives. Right? Their incentives tax laws are incentives.
everyone can take advantage of the tax laws and incentives. can you unpack that a little bit more, for us, what can we expect with the new book? Yeah. Yeah. So here’s, here’s one of my favorite parts of the, the new book. and I learned, you know, you always learn more by writing than you do by reading.
Right. And, I, I learned some things. what’s interesting is I learned, I did a, I actually did an analysis on each incentive as to how much does the government make on this incentive versus how much does the taxpayer make? And, interestingly enough, more times than not the government makes more money than the taxpayer does.
So it’s a win for the government. So this is a win-win wealth strategy. It’s a win for the government. It’s a win for the taxpayer. Now, some people are gonna say, well, wait a minute, you’d have done that investment otherwise. Well, how do you know. But it doesn’t matter anyway, because here’s the other thing think about this.
So the returns to the government are so good on some of these investments. I mean, some of ’em they’re off the chart, the returns to the government, and guess what? You can never stop being, you can never buy out the government ever. Right. So I’m looking at these and I’m going, investors are gonna look at at this, at these strategies that are going, I want the government’s position.
I don’t want the taxpayers position. I want the government’s position because I get that money forever. I put a little bit of money down now and I get money forever. All right. So, you know, starting a business is a good example or, or solar energy is a good example, but what’s interesting is, is that. The taxpayer wins too.
And so it really is. And, and really the goal here is to change this whole dialogue that, you know, they’re rich or bad, they’re cheating. They’re, they’re not paying taxes. They need to pay more taxes. I’m going well, wait a minute, though, if this works. You know, I’m not judging. I’m just saying here’s the numbers you judge, whether it works.
What I want people to understand is that when, when people are doing things like investing in real estate or investing in solar, right, that, or investing in agriculture, they’re doing things the government wants done. And the government says, look, we’re gonna get part of the return and you’re gonna get part of the return.
I mean, let’s take for example, In real estate, you might put a hundred thousand dollars down and borrow $400,000 from the bank. Well, that a hundred thousand dollars probably came from your business, right? You might, you made that a hundred thousand dollars from your business. Now, the, the government turns around and says, I’m gonna give you a hundred thousand dollars deduction for borrowing 400,000 from the bank and, and buying a $500,000 piece of real estate.
So effectively they’re saying that a hundred thousand dollars you put into this is tax. And what they’re really saying is, okay, so you’re not gonna have to pay tax. So we’re kind of giving up basically 40%, right. Of that a hundred thousand. So we’re putting in 40,000, you’re putting in 60, but what happens when you actually make money on the real estate?
Well, they also take 40%. Right. So they, they made investment, they get a return, you make an investment, you get a return it’s, it may be an involuntary partnership on your part. but again, it is what it is. I mean, you know, every, everybody remembers the friends episode, right? Where Rachel gets her first check.
She says, who’s this fi a guy. This is totally not worth it. it took all my money. I’m going. Well, guess what that, all that is saying is you’re a partner with the government and all I’m saying. Choose you wanna be a silent partner. You wanna be an active partner. The government actually doesn’t care. I don’t think the government cares.
If you wanna be a silent partner, great pay your tax. If you wanna be an active partner, even better, because the reality is, is here’s what happens. Think about this. If the government employs somebody, every dollar they spend on that employee, they get a dollar in return, right? That’s about the best they can get.
They’re not gonna get much more than a dollar worth of. Services out of that dollar they spent, but if they do it through an incentive, they might spend a dollar incentivizing you as an entrepreneur and get $10 back. So it’s a leverage for them and tax incentives are a leverage for the government and, and the, the dialogue I’m, I, I really want people to have is okay, well, let’s talk about this.
You can argue whether they’re good at whether the incentives are good or bad. But nobody’s arguing what’s interesting is, is that outside of Ted Cruz in Texas and Bernie Sanders. Okay. These two are on the same page on one thing, neither of them like tax incentives, right? Cruz wants a flat tax and, Sanders wants a progressive tax, but they don’t want any tax incentives.
The problem is, is that no other government official wants to give the power that comes with the tax authority. Right. Nobody wants to give up that power. So they wanna say, okay, so. President Trump. It was real estate. Okay. Now we got president Biden. It’s it’s renewable energy. It’s the same thing. They just changed the priorities, but the incentives are still there.
Yeah, I love the way you explain it, though. It truly is a win-win, you know, voluntary or not. If you, you know, having the right attitude and, and approaching it with the, right mindset, like you said, it’s a, win-win it works for both parties. So I love that. You also talk about how you can use tax incentives to help pay for your next car house or tuition bill.
The book, you know, explaining that. So there’s actually a chapter in, on how to get the government to pay for your Ferrari. And, this it’s genius. It’s a true story. Genius. Just to be clear, it’s a true story. The numbers came from, this is a friend of mine, client of mine. They gave me permission to do this.
there’s a picture actually of he and his wife at their Ferrari. And, it actually show you how to, you know, get the government to pay for your Ferrari. The government doesn’t want you don’t Ferrari. They’re just willing. They’re so willing. If you do what they want you to do, there’s enough money coming out of it to buy a Ferrari.
Well, well, my next question was, Tom, will you do my taxes? Well, of course, yeah. Okay. There we go. Of course. so fantastic. So that comes out July 12th, right? July 12. Yep. But you can pre-order it on our website. Win-win wealth strategy.com. So go ahead and pre-order it. And, let get, you know, be first off the press win-win wealth strategy.com.
Correct. Win-win wealth strategy.com.com. And that’s the, the preorder, July 12th, everywhere. Pre-order preorder pre-order pre-order preorder just, okay. Got it. Okay. So here’s what we’re gonna do. We’re gonna wrap things. with a fun segment and, and it’s fun because at the beginning of this discussion, you actually quoted Albert Einstein, who said the hardest thing in the world to understand is the income tax.
He said that he did. Right. So, so you did that quote. So here’s what I’m gonna do. I’m gonna give you a quote. You got a guess. You got a guess who said it and then the first thought that comes to your mind. Okay. So we’ll see for it. And this is unfair because I have who said it here and it’s totally unfair and I’m kind, probably blow it.
So go ahead. Well, this one will be easy. This one’s good. Read my lips. No new taxes. That would be George H w Bush. You nailed it. You nailed it. Okay. And, how did that play out? I can’t. yeah, he lost the election. Yeah. He lost the election. Okay, good. here’s the here’s how here’s it
became president. That’s how it played out. Hey, you know, here’s the next one? I, I like this one. They can’t collect legal taxes from illegal money. Do you know who said that? I, I, I, I don’t, I, I, I I’m thinking like, you know, one of, one of the mobsters, but whoa, Tom, you nailed it. It was Al Capone.
So Al Capone, you know, he went to prison on tax fraud, right? Yeah. That’s how, that’s how they caught him. Well, there you go, Al Capone. You nailed it. we, we had Michael Fran CSA on the show. I don’t know if you know who Michael Fran is. He was in, Goodfellows. Oh, God, it, and he’s the highest earning mob boss since Al Capone.
And he actually had a tax scam, that made hundreds of millions of dollars. Really interesting story. You should go back and listen to that episode, but that was Al Capone. Okay. Here’s another one. Okay. You don’t pay taxes. They take taxes. Oh man. Oh, man, that, that sounds like, comedian. Oh, I’m I’m just gonna guess Chris rock.
You’re kidding, Tom. I get you nailed it. How, how are you doing this? It’s just the type of thing he would say. But Tom, I, and for our listeners and subscribers, I did not give Tom these quotes. I promise you. This is true. I did not know this. That was a total guess. He was, you nailed it. You’re three for three, pretty much three for three.
Okay. Here’s one. I shall never use profanity except in discussing house rent and taxes. WC fields, mark. Mark Twain market. Okay. Well, okay. They’re they’re the same person, right? I mean, come on. Okay. I got a couple more, these are fun. you must pay taxes, but there’s no law that says you gotta leave a tip.
yeah, I’m out on that one. I, that was, that was Morgan Stanley. Morgan Stanley. There you go. Morgan Stanley. Okay. I’ve got, okay. I’ve got two more. This one you might be able to guess just by the way it’s said, okay. We contend. The for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
Ooh, that sounds like Thomas Jefferson, Winston Churchill, Winston Churchill. Okay. The final one, the final one. This one’s my favorite. Okay. This one’s my favorite. Who wrote this letter? Dear IRS. I’m writing you to cancel my subscription. Please remove me my name from your mailing list. Oh my heavens. I know this one.
Snoopy. Tom, I, you nailed it. Yeah, absolutely. I, that one you absolutely nailed it. great work. I, you know, I was thinking, you know, when I, when I had this, I said, we’re gonna do this segment. There’s no way he’s gonna get even half of these. You almost won a hundred percent. So, shoutouts, Tom Wheelwright, fantastic interview today.
I really appreciate your time. that breakdown. It was just a clinic and you kept it simple and fun, which I really love, looking forward, to the new book. I want to thank you for your time today. Where can the people find you or where do you want the people to go to, to where do you want the people to go to, follow you, buy your book, go to the website, anything like that?
Win-win wealth strategy.com or, company is wealth ability. So, wealth ability.com. It’s really simple. If you know, if there’s anything we can do for you, you want us to just take a look at your tax return and see how you’re doing. We’re happy to do that. We’ll do a free look at anybody’s taxes for.
