The Most Dangerous Tax in History: My Three Favorite Loopholes

“Nothing is certain but death and taxes.” — Ben Franklin

“The only difference between death and taxes is that death doesn’t get worse every time Congress meets.” — Will Rogers

With the government facing higher deficits, the IRS is hungry for more revenue. That means more audits and new ways to make you pay more in taxes.

We all know that Kamala Harris and the Democrats want to raise your taxes, but even Donald Trump is proposing a massive new tax via a universal 10% tariff on import duties. A tariff is a tax, and it will raise the cost of living of the average American by several thousand dollars.

The Most Dangerous Tax Scheme in History

What’s worse is the Harris/Walz tax increases they propose. If passed, they could cause a major bear market on Wall Street. I’m not joking. She’s definitely anti-investor. Consider, the Harris tax plan would:

— Raise the corporate tax from 21% to 28%
— Quadruple the tax on stock buybacks from 1% to 4%
— Increase the global minimum tax from 15% to 20%
— Raise the top income tax rate from 37% to 39.6%
— Raise the corporate alternative minimum tax from 15% to 21%
— Raise the capital gains tax from 24% to 43.5%
— Impose the first-ever tax on unrealized capital gains at 25%
— Double the number of Americans subject to the death tax

If anything will cause a bear market on Wall Street, the tax on unrealized capital gains in stocks, bonds and real estate will do it. It will force high-net-worth individuals to dump huge positions in their stocks every year to pay for this crazy 25% wealth tax (bonds and real estate are illiquid). Imagine the impact if, every year, Elon Musk or Bill Gates had to sell millions of their stock to pay for the unrealized appreciation of their real estate holdings?

The Harris/Biden Democrats say this tax only affects super wealthy people who have $100 million in assets, but a bear market affects the average investor/worker who has a 401k or IRA plan. (Over 160 million Americans are invested in the stock market.) The radical Democrats are ignorant if they think this tax is going to hit just the wealthy.

My Three Favorite Tax Loopholes

“No tax law was ever passed without legal loopholes.” — Larry Abraham

In 1983, I wrote a book entitled “TAX FREE: All the Legal Ways to be Exempt from Federal, State and Social Security Taxes.”

It was a thin volume, and it would be an even thinner book today. Congress has worked hard to reduce the number of exemptions and loopholes. Nevertheless, there still are many legal ways to eliminate or minimize your tax burden.

Here are my three favorite ways:

Whole Life and Annuity Insurance Policies: The insurance industry, like oil and gas, has successfully lobbied Congress to give them special tax breaks. Whole life and annuity products can avoid federal income and estate taxes on their cash value and investment products. They can pass on the face value of their life insurance free of federal estate taxes. I suggest you take full advantage by contacting David T. Phillips & Co., at epmez.com, or call them toll-free 1-(888) 892-1102. Or you can email david@epmez.com, or his son todd@epmez.com. You call them, they don’t call you. They are low key. I’ve been recommending their services for over 30 years.
Create your own tax-free private or public foundation. Non-profits are proliferating in the United States, largely because of their tax benefits. You can create your own foundation for charitable or educational causes. For more information on how to do this, go to 11 Must-Dos for Starting a Nonprofit – Foundation Group® (501c3.org).

Another possibility is to create a “Donor-Advisory Fund” (DAF), which allows you to funnel your money and assets through a charitable foundation that is already set up and can donate your funds to your favorite charity without you doing all the work of setting up your own foundation. For more information, see What is a Donor-Advised Fund? | NPTrust.

Move to Puerto Rico! You might want to consider moving abroad and taking advantage of some tax benefits and lower cost of living for Americans living abroad. The problem is that you are subject to foreign taxes. It worked out for us moving to the Bahamas as a family years ago because the Bahamas has no income tax, but it does impose import duties that make living in the Bahamas expensive.

A better choice for some wealthy Americans would be to become a resident of Puerto Rico under Act 60. If you are accepted as a resident, you can avoid taxes on capital gains, dividends and interest and pay only a 4% corporate income tax. Many of my wealthy friends have moved there. It’s only a three-hour flight from Miami, but you are required to live in Puerto Rico for more than six months out of the year. For more information go to Is Puerto Rico a Tax Haven? (offshore-protection.com).

My 13-Minute Interview on C-SPAN Book TV

For those who missed my interview with Peter Slen on C-SPAN Book TV (shown four times!), here is the link to watch it: [There Were Giants in the Land] | C-SPAN.org.

In 13 short minutes, I tell the story of FreedomFest, and why my wife and I compiled and edited the fascinating story of my famous uncle W. Cleon Skousen. In the interview, I tell the incredible story of Olivia de Havilland, the famous actress in “Gone with the Wind.”

You can also learn more about the Giants book here: ‘The Naked Communist’ Is Back! – Mark Skousen.

To receive your own autographed copy, go to www.skousenbooks.com. The price is only $29.95, and I pay the postage if mailed inside the United States.

Upcoming Appearances

Orlando MoneyShow, Oct. 17-19, Championship Gate Resort: Join me along with Keith Fitz-Gerald, Steve Moore, Charles Payne, Louie Navallier, Kelly Wright, Peter Schiff, George Gilder, Adrian Day, Brien Lundin and Ed Yardini. To learn more and register, go to https://www.orlandomoneyshow.com/registration/. Sign up soon before the $149 registration price rises. Use promo code 063467 for the discount.

COSM Technology Summit, Oct. 31-Nov. 1, Bellevue Hyatt, Seattle, Washington: This conference is sponsored by George Gilder and the Discovery Institute. I’ll be speaking on gross output (GO) and its significance as a critical supply-side statistic. For more information, go to https://cosm.tech/. To receive a $200 discount, use EAGLE-MS as the Promotional Code when registering.

New Orleans 50th Anniversary Investment Conference, Nov. 20-23: I’ve been speaking every year at the famous “gold bug” New Orleans conference since 1977, and will give a unique talk, “My Life-Changing Highlights in New Orleans.” Other speakers include James Grant, Gary Alexander, Robert Prechter, Mary Anne and Pamela Aden and Brien Lundin. It will be memorable. For more information and to register, go to https://www.eventbrite.com/e/2024-new-orleans-investment-conference-tickets-752296528167?aff=Skousen.

P.S. I will be holding a subscribers-only teleconference on Sept. 5 at 3:00 PM entitled “Which Stocks Will Rise the Fastest After the Rate Cuts?” The event is free to attend, but you must register here in order to be able to attend. Don’t miss out!

Good investing, AEIOU,

Mark Skousen

You Nailed it!

The USA Could Learn a Thing or Two From New Zealand

By Mark Skousen

New Zealand is ranked #4 in the Economic Freedom Index by the Fraser Institute and #6 by the Heritage Foundation.

It is ranked #1 in the world for its legal systems, property rights and regulation!

The Cato Institute recently released a report on New Zealand saying that in 1984, it began removing agricultural subsidies as part of a larger economic reform to create a more competitive, market-driven economy. The reforms were intended to treat farming like any other business and create a level playing field. The subsidies removed included:

— Price support for wool, beef, sheep meat and dairy products
— Income support
— Fertilizer, irrigation, transport and land development subsidies
— Tax concessions and free government services for farmers

See the report here.

Meanwhile, the United States spends around $30 billion every year in farm subsidies.

This year, New Zealand took another bold step. It scrapped its clean, green policy to boost the economy. Since taking power last year, Prime Minister Christopher Luxon’s coalition announced it will reverse a ban on oil and gas exploration, push the pricing of agricultural emissions back five years and encourage more mining.

This is part of a government shift in priorities towards increasing exports to support an economy that grew just 0.3% in the year to March 2024, its lowest growth for the same period since the pandemic hit in 2020, and that has a current account deficit at 6.8% of gross domestic product (GDP).

For more information, go to New Zealand scraps clean, green policies to boost economy.

The United States spends over $17 billion a year in subsidiary alternative energy (wind and solar power) and $25 billion to pay for electric vehicle (EV) charging stations. And that’s not counting the $7,500 credit to EV purchases.

Mark Skousen

Mark Skousen, Ph. D., is a professional economist, investment expert, university professor, and author of more than 25 books. He earned his Ph. D. in monetary economics at George Washington University in 1977. He has taught economics and finance at Columbia Business School, Columbia University, Grantham University, Barnard College, Mercy College, Rollins College, and is a Presidential Fellow at Chapman University. He also has been a consultant to IBM, Hutchinson Technology, and other Fortune 500 companies. He is a former analyst for the Central Intelligence Agency, a columnist to Forbes magazine (1997-2001), and past president of the Foundation for Economic Education (FEE) in New York. He has written articles for The Wall Street Journal, Liberty, Reason, Human Events, the Daily Caller, Christian Science Monitor, and The Journal of Economic Perspectives. He has appeared on ABC News, CNBC Power Lunch, CNN, Fox News, and C-SPAN Book TV. In 2008-09, he was a regular contributor to Larry Kudlow & Co. on CNBC. His economic bestsellers include “Economics on Trial” (Irwin, 1991), “Puzzles and Paradoxes on Economics” (Edward Elgar, 1997), “The Making of Modern Economics” (M. E. Sharpe, 2001, 2009), “The Big Three in Economics” (M. E. Sharpe, 2007), “EconoPower” (Wiley, 2008), and “Economic Logic” (2000, 2010). In 2009, “The Making of Modern Economics” won the Choice Book Award for Outstanding Academic Title. His financial bestsellers include “The Complete Guide to Financial Privacy” (Simon & Schuster, 1983), “High Finance on a Low Budget” (Bantam, 1981), co-authored with his wife Jo Ann, “Scrooge Investing” (Little Brown, 1995; McGraw Hill, 1999), and “Investing in One Lesson” (Regnery, 2007). In honor of his work in economics, finance, and management, Grantham University renamed its business school “The Mark Skousen School of Business.” Dr. Skousen has lived in eight nations, and has traveled and lectured throughout the United States and 70 countries. He grew up in Portland, Ore. He and his wife, Jo Ann, and five children have lived in Washington, D.C.; Nassau, the Bahamas; London, England; Orlando, Fla.; and New York.