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Why the Rich Have a Light Tax Burden

by SophisticatedSpender on January 30th, 2012
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Hello Sophisticated Spenders!

Tax

Image by 401K via Flickr

There is a lot of debate about taxes and the rich.  I was just reading an article in Time magazine about Warren Buffet.  (Click here to read it)  I love this guy.  And here’s why, “Buffett paid a tax rate of only 11% on adjusted gross income of $62,855,038 in 2010…his office staff, meanwhile, paid percentages somewhere in the 30s.”  Now I’d like to know where you fall on this tax burden tree!

This year I pad a tax rate of 10.37%.  I’d love to say I must have the mindset of Warren Buffett and when I’m his age I will have an adjusted gross income of $62,855,038 (and no I haven’t been drinking tonight).  But I’d like to think that the moves that I am making now will help me to keep moving in that direction.  You will pay a tax rate percentage somewhere in the 30s if you don’t pay attention to how you spend your money!  Here are some of the steps that I took:

1.  Start a business-any kind of business!

2. Donate to charity!

3. Purchase rental real estate!

4. Contribute to your retirement accounts!

5. Sign up for health savings accounts!

I know that there are a lot of other ways to reduce your tax burden that are over my level of expertise.  I would like to hear from you guys as to what I’m missing out on here.  I can’t stress enough the importance of spending your money on things that help your money work for you.  Don’t get me wrong, if you have been following my spending recaps, you can see that I am quite foolish with my money at times.  However I make sure that the majority of my money goes back into my blogging business or back into my investments.

Email me if for additional tips and pointers on setting up a blog for yourself or we can brainstorm on a good business or topic that would be a great fit for you! SophisticatedSpender@gmail.com

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