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The American Wealth Gap

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The wealth gap, measured by net worth, between average Americans and the wealthy is the widest and most extreme in recorded history.

The average American has personal wealth, measured by net worth, consisting of about $393,000 in assets minus liabilities, according to the World Inequality Database. Yet, someone with that kind of net worth is not “wealthy,” relative to the country’s wealthiest elites. 

Below is the chart created using data from the World Inequality Database and Bloomberg’s Billionaires Index. The bubbles represent the relative wealth of the average American — just one pixel wide in the chart below — compared to the average wealth of the top 1% of people in the US. Also, there are bubbles to represent multibillionaires Marc Benioff and Charles Koch, as well as Elon Musk, the richest person in the world.

The chart shows just how far ahead billionaires are from everyone else. The dot representing the average American’s wealth is so small that chart designers had to draw a circle around it. It depicts that Elon Musk’s bubble stands 488,000 times as large as the average American’s comparable infinitesimal bubble.

Even the average wealth in America of the top 1%, approximately $13.7 million, is dwarfed by the billionaires. The top one percent of household net worth threshold starts at $11.1 million in 2019, according to finance and investing website ‘Don’t Quit Your Day Job’.

HENRYs — “high earner, not rich yet”

In the world of finance, HENRY is an acronym that stands for “high earner, not rich yet”. HENRYs make six figure incomes but still live basically paycheck to paycheck. These individuals earn a sizeable disposable income and tend to spend that income to facilitate a standard of living at or beyond their financial means. It’s also important to note that HENRYs typically live above their means, they constantly utilize credit and work to pay off their accumulated debts.

Because of their considerable disposable income and being on the path to establishing future wealth, luxury brands target HENRYs with their marketing. The 3 Key Characteristics of a HENRY, according to Corporate Financial Institute, are:

  1. Feeling of/belief that they have little to no wealth
  2. A substantially greater-than-average yearly income
  3. Limited or non-existent savings

Though HENRY’s are in a much better position financially than many Americans to pay their monthly mortgage, buy a car, or take a vacation, compared to billionaires like Musk or Benioff, they don’t make the cut for the wealthiest.

The US has 650 billionaires according to an analysis by Americans for Tax Fairness and the Institute for Policy Studies Project on Inequality,

References:

  1. http://static5.businessinsider.com/chart-wealth-top-1-percent-billionaires-average-american-family-worth-2021-8
  2. https://wid.world/country/usa/
  3. https://dqydj.com/average-median-top-net-worth-percentiles-by-age/
  4. https://corporatefinanceinstitute.com/resources/careers/compensation/high-earners-not-rich-yet-henrys/
  5. https://dqydj.com/top-one-percent-united-states/

Individual Investor’s Coinbase Accounts Hacked…Money Gone Forever

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Coinbase has become the world’s most popular exchange for buying and selling digital cryptocurrencies. It has also become the most popular exchange for hackers and scammers to compromse and empty investors digital currency wallets.

If your Coinbase account gets hacked and your cryptocurrency is stolen off Coinbase, it important to understand that it’s gone forever. Coinbase will not give you your money back, specifically if your Coinbase account gets compromised through a SIM swap scam through your cell phone carrier.They say that they are not responsible for a breach caused by a third party such as your cell phone carrier.  Although they have “insurance”, it’s only applicable if Coinbase’s main site gets hacked, not your specific account.

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SIM swap scams occur when a scammer pretends to be a legitimate customer of the cell phone service carrier in order to obtain a new SIM card.  The new SIM card is connected to the real customer’s phone number without the real customer’s knowledge.  Once the new SIM card is activated, the scammer uses the new SIM card on a phone under the scammer’s control.  As the scammer now has control of the real customer’s phone number, all of the real customer’s phone calls, text messages, and data are directed to the phone under the scammer’s control.

“It has become harder and harder for people to protect their online accounts, given the amount of personal information that has become available to bad actors,” Coinbase chief information security officer Philip Martin acknowledged.

How to Secure Your Coinbase Accounts

Numerous Coinbase accounts get compromised every day, according to Reddit forum r/CoinBase. However, Coinbase says, unauthorized transactions are rare. In 2020, just 0.004% of customers experienced transactions where their email accounts were taken over, SIM swaps attacks occurred on their cellphones, or other personal information unrelated to Coinbase was breached, according to Coinbase.

To improve the security on your Coinbase accounts, the Reddit forum recommends that you should not use the same email everywhere especially for your bank and crypto accounts, and don’t use SMS 2 factor authenication. Your mobile phone SMS 2 factor authenicadtion is not secure.

Once a scammer discover your phone number, all he or she has to do is call his inside accomplice at your phone carrier and get your number swapped to his sim card. To protect your account, experts recommend:

  • Don’t use phone texting SMS 2 factor authentication, use Authy or get a physical key.
  • Don’t use the same email everywhere. Have a junk email, then a credit card email, then a bank account email. Make them all different.
  • Get a password manager like KeePass, Kaspersky, or 1Password. If you can remember your password then it’s not a good password. However, you can have the strongest password in the world, but if you have SMS 2 factor authentication enabled the scammer can reset your password by receiving your text while he has control of your phone number.

Coinbase does offer physical USB security key capability for added account security, but the measure requires users to acquire additional hardware. Security experts say physical USB security keys would protect users from becoming victims of account hacks that occur through SIM swaps, which are occurring with increasing frequency.

On Coinbase’s website, customers should heed the company’s warning notes, “Please be aware that we currently do not offer any phone support with a live agent. Moreover, Coinbase does not respond timely to emails you send them, if you’re compromised. They don’t have customer support via phone or live chat.

References:

  1. https://www.reddit.com/r/CoinBase/comments/gdcgd9/coinbase_account_hacked/
  2. https://www.consumer.ftc.gov/blog/2019/10/sim-swap-scams-how-protect-yourself
  3. https://finance.yahoo.com/news/coinbase-hacked-accounts-get-no-justice-from-horrible-us-laws-fintech-lawyer-113520348.html

The National Study of Millionaires

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“Anyone in America can build wealth. The only thing holding you back is you. Get out of debt. Save consistently. Keep your spending in check. Let time and compound interest do their magic. If you’re willing to work hard and keep the long-term goal in mind, you’ll reach the million-dollar milestone.” Chris Hogan

Summary

  • “The National Study of Millionaires” is the largest survey of millionaires ever with 10,000 participants.
  • Eight out of ten millionaires invested in their company’s 401(k) plan.
  • The top five careers for millionaires include engineer, accountant, teacher, management and attorney.
  • 79% of millionaires did not receive any inheritance at all from their parents or other family members.

The National Study of Millionaires by Ramsey Solutions concluded that millionaires successfully accumulated wealth through consistent investing, avoiding debt like the plague, and smart spending. No lottery tickets. No inheritances. No six-figure incomes.

Thus, according to the survey, there is positive news for Americans who may have lost hope that they can ever accumulate wealth. “The people in the study became millionaires by consistently saving over time. In fact, they worked, saved and invested for an average of 28 years before hitting the million-dollar mark, and most of them reached that milestone at age 49.”

The study’s results demonstrated a dramatic difference between how Americans think wealthy people get their money and how they actually earn and spend their money.

In a nutshell, regular, consistent investing over a long period of time is the reason most of the people in the survey successfully accumulated wealth. And, even when millionaires don’t have to worry about money anymore, they remain careful about their spending. Ninety-four percent of the people studied said they live on less than they make. By staying out of debt and watching expenses, they’re able to build their bank accounts instead of trying to get out of a financial hole every month.

SIM Swap Scam – Existential Risk to Your Personal Info and Financial Assets

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“SIM swapping is a big deal, especially if you’re also actively involved in the cryptocurrency community—a great way for an attacker to make a little cash and mess up your life.”  Lifehacker

SIM swapping involves a hacker duping your cell provider (e.g., AT&T, Verizon, T-Mobile. etc. )into believing that you’re activating your SIM card on another device. In other words, they’re stealing your phone number and associating it with their SIM card.

If your SIM card has been activated on a new device, this could be signs that a scammer has pulled a SIM card swap to hijack your cell phone number.

How do scammers pull off a SIM card swap like this?

They may call your cell phone service provider and say your phone was lost or damaged, according to the Federal Trade Commission. Then they ask the provider to activate a new SIM card connected to your phone number on a new phone — a phone they own. If your provider believes the bogus story and activates the new SIM card, the scammer — not you — will get all your text messages, calls, and data on the new phone.

The scammer — who now has control of your number — could open new cellular accounts in your name or buy new phones using your information.

It’s a lot easier to set up defenses against a SIM swap attack right now than it is to deal with the fallout from one—one is a minor annoyance, the other will consume your week (or more).

Protect your accounts

Many digital accounts have settings that can help you take back your accounts if they’re ever stolen—but they need to be properly set up before the account is stolen in order to be of any help, acknowledges Lifehacker. These can include:

  • Creating a PIN number that is required for logins and password changes. This is especially important to set up with your cellular carrier, as it’s a great defense against SIM hijacking.
  • A suitable two-factor security method that relies on a physical device, like Google Authenticator or Authy, rather than SMS-based verification for logins. You can also spring for a hardware token to protect your accounts if you want to get really fancy.
  • Strong answers security recovery questions that aren’t tied to your personal information.
  • Unlinking your smartphone phone number from your accounts, where possible. (You could always use a free Google Voice number if you’re required to have one for your sensitive accounts.)
  • Using long, randomized, and unique passwords for each account.
  • Use an encrypted password manager.
  • Don’t use your favorite services (Google, Facebook, et cetera) to sign in to other services; all an attacker needs is to break into one to have access to a lot more of your digital life.

You should also make note of important account-related information that could be used to identify you as the rightful account holder, such as:

  • The month and year you created the account
  • Previous screen names on the account
  • Physical addresses associated with the account
  • Credit card numbers that have been used with the accounts or bank statements that can confirm you were the one who made purchases
  • Content created by the accounts, such as character names, if the account is for an online video game
  • Similarly, keeping a list of all your critical accounts will make reacting to a SIM swaps or similar ID theft easier,

References:

  1. https://lifehacker.com/how-to-prevent-and-respond-to-a-sim-swap-scam-1835627474

Small-Cap Stocks

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“Growth is greatest in the early stages of a company’s development.” Cabot Wealth

There is a common perception among investors that over the long term, small-cap stocks outperform large-cap stocks. In exchange for more risk, you get more reward.

As it turns out, this is mostly untrue, according to Seeking Alpha. The best small-cap stocks offer more explosive upside potential, but as a group they don’t really outperform large-cap stocks, subject to a few caveats.

The best possible investing scenario is to identify a top small-cap stock that will go on to become a large-cap stock over the coming years, and go up in value by 10x or 100x.

Unfortunately, for every massive winner that does that, there are multiple losers. Both Russell and Wilshire data show that small-cap stocks don’t really outperform as a group. They’re not bad, but over four decades they don’t really stand out either. Mid-cap stocks are a potential sweet spot, that investors can benefit from either by directly investing mid-cap fund or investing into an equal weight large-cap fund which tends to have a lot of overlap with the mid-cap space.

A 2017 study by Hendrik Bessembinder that analyzed virtually all U.S. public stocks over the past 90 years found that small-cap stocks have much higher performance variance. A smaller percentage of small-cap stocks provide positive long-term returns compared to the percentage of large-cap stocks that provide positive long-term returns. As a consequence, small stocks more frequently deliver returns that fail to match benchmarks.

Conversely, while the absolute best-performing small caps outperform the best-performing large caps over a given period, small caps as a group also have much higher rates of catastrophic loss.

Anytime you buy shares of a small, lessor-known company, there are a plethora of unknowns. Thus, it’s impossible to take the risk completely out of small-cap investing. But there are ways to minimize those risks without sacrificing potential profits.

The defining characteristics of small-cap stocks are that many are young, attractive investments and tend to be highly volatile. This volatility can be absolutely maddening for those who are new to small-cap investing (and even to those who aren’t).

Don’t let this volatility drive you away from small-cap stocks if you’re inclined to invest in them. Volatility comes and goes, and over the long-term small caps tend to beat the market.

FIVE SIMPLE RULES FOR SUCCESS WITH SMALL-CAP STOCKS

It’s important to set up a clearly established set of rules ahead of time, and stick to them. The simple rules that can increase your odds of success, especially during uncertain markets, are:

Rule #1: Commit To The Long Term: One of the more frequently quoted Warren Buffett quips is, “If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.”

You don’t need to own every small-cap stock you buy for the next decade. But you do need to look out at least a year or two if you expect to have significant success.

There are select examples of investors making money trading in and out of small caps in the short term. But very few can do it week in and week out, year after year. All the studies say the same thing; your odds of making money go up the longer you stick with small-cap stocks.

A study from Ibbotson, a financial research firm owned by Morningstar, found that investors have a 70% chance of making money with small-cap stocks if they stay invested for one year. That probability goes up to 82% after three years, 86% after five years and 98% after 10 years. The percentages aren’t all that different for large caps.

Rule #2: Dollar Cost Average Your Cost Basis: Small-cap stocks can be irrational in the short term. That’s why you never do anything too drastic. Don’t go all in on an individual stock on a big pullback, or a big breakout. Instead, average into a position by buying shares at different prices and on different days. The strategy helps to reduce the risk of buying a full position in a stock at an unlucky time, which is bound to happen occasionally.

The period over which you average in should be dictated by your holding time horizon. If you’re investing for just a year or two, you’ll probably average in over a week or two, maybe a month. If you’re in it for three or more years, you can average in over a year, or more.

Rule #3: Take Partial Profits: If averaging in makes sense, then averaging out should too. Consider selling a quarter or a half position on the way up, and especially if a gain has surpassed 100%. This doesn’t have to mean giving up on the stock. It’s simply a risk-mitigation strategy. The original capital can be allocated to a lower-risk investment.

Also, it’s fine to average back into a position even if you sold shares at an earlier date. Sometimes, especially during corrections, investors are forced to dump some shares to protect their gains. Months later, the stock might be doing just fine. If the growth story is intact and the market is trending up there’s no reason you can’t build up your position again.

Rule #4: Use a Stop Loss: For small cap stocks, many advisors advocate a 15% to 30% stop loss for large caps. The reason is that you often see quality small caps drop 20% or so during market corrections. Often, these are the times to average down if and when the stock has stabilized, assuming the stock’s growth story is intact,.

That said, it can also be a time to sell a partial, or full, position to protect gains, or help avoid catastrophic losses. How close you are to your desired position size will usually determine if you’re averaging in, or out. The underlying reason for using stop losses is that the bigger the loss, the bigger the return you need to get back to break even (see table below). Don’t go below the red line!

Rule #5: If You’re Not Sure What To Do, Do Nothing: Just because the market is open doesn’t mean you need to participate in it. If you’ve had a streak of losses, or things just don’t feel right, take a break. Focus your attention on a few stocks you’d like to own eventually and read up on those so you’re ready to go when the stock’s margin of safety improves, and your confidence returns.

As Warren Buffett said, “I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing.”

Investing in small-cap stocks is a good way to earn huge returns. Consequently, there are two major ways to outperform the market.

  • You can take advantage of short-term price dislocation versus a company’s intrinsic value, or
  • Use long-term compounding to achieve market outperformance.

References:

  1. https://seekingalpha.com/article/4287533-small-cap-performance-gap-doesnt-exist-why
  2. https://cabotwealth.com/category/daily/small-cap-stocks
  3. https://cabotwealth.com/daily/small-cap-stocks/small-cap-stock-warren-buffett/

Life Insurance

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If something were to happen to you today, is your family protected? 

Life insurance is a relatively low cost way to ensure that your family will have financial security if you or the primary earner should die prematurely. Furthermore, life insurance is often necessary financially because it provides peace of mind—not just for you, but for your whole family.

Conventional wisdom dictates that you don’t need life insurance if no one else depends on your income. While mostly true, there are many reasons why you should obtain life insurance if no one depends on your income.

  • Insurability and low premiums. Buying a policy both locks in lower premiums and guarantees insurability later in life. An existing insurance policy guarantees the ability to purchase additional insurance with no medical underwriting or physical exams. 
  • Cash Value Growth. Whole Life insurance policy provides attractive cash value growth. Access this cash value at any time using a policy loan. Or, if you cancel the policy, you get a return of all or a majority of the premiums paid, or the cash value – whichever is greater.
  • Funeral and burial expenses. From a practical perspective, in addition to the emotional devastation, parents also face significant expenses in the event of a child’s death. According to the Natural Funeral Directors Association, the median cost of a funeral with burial exceeds $7,000. Purchasing insurance for children alleviates the significant financial burden for a family coping with a tragic loss. 

Not only do rising prices make life increasingly expensive, but, as life’s circumstances change – you marry, buy a house, have children, and perhaps need to care for others – you have greater responsibilities and a need for better financial protection.

Key Takeaways

There are several excellent reasons to obtain insurance coverage for you and your family.

  • You can lock in low premiums while they are young and healthy.
  • You can lock in eligibility for other services while they have an active policy.
  • Permanent insurance provides a store of cash value that safely grows at a high crediting rate, which can be used to help fund future expenses like college tuition.
  • In the event of loss, a policy can cover the ever growing expenses of funerals and burials and protect your savings.

References:

  1. https://www.aafmaa.com/learning-hub/blog/post/2792/why-insure-your-child-or-grandchild-through-aafmaa
  2. https://www.aafmaa.com/learning-hub/blog/post/2810/your-life-will-change-so-the-way-you-protect-loved-ones-should-too

What is a Trust Fund

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“Regardless of your income, estate planning is a vital part of your financial plan. Planning ahead can give you greater control, privacy, and security of your legacy.” Fidelity

A trust is an estate planning tool that anyone can use to ensure their assets are passed down as they wish, to friends, family or a charity. It is a legal entity that that allows a third party, or trustee, to hold assets until an intended recipient or beneficiary is able to receive them.

Trusts can be arranged in many ways and can greatly expands your options when it comes to managing your financial assets, whether you’re trying to shield your wealth from taxes or pass it on to your children or grandchildren.

To understand how a trust fund works, it helps to understand the following three terms:

  • Grantor. This is the person who transfers assets to a trust fund. That would be you, if you’re the one looking to start a trust.
  • Beneficiary. The person who is given the legal right to assets in a trust fund is a beneficiary. That might be your loved ones or a favorite charity.
  • Trustee. The decisionmaker responsible for ensuring the assets in the trust fund are appropriately distributed is called the trustee.

Trusts can hold assets like real property (such as heirlooms or jewelry), real estate, stocks, bonds or even businesses.

Since trusts usually avoid probate, your beneficiaries may gain access to the trust’s financial assets more quickly than they might to assets that are transferred using a will. Additionally, if it is an irrevocable trust, it may not be considered part of the taxable estate, so fewer taxes may be due upon your death.

Assets in a trust may also be able to pass outside of probate, saving time, court fees, and potentially reducing estate taxes as well.

Other benefits of trusts include:

  • Control of your wealth. You can specify the terms of a trust precisely, controlling when and to whom distributions may be made. You may also, for example, set up a revocable trust so that the trust assets remain accessible to you during your lifetime while designating to whom the remaining assets will pass thereafter, even when there are complex situations such as children from more than one marriage.
  • Protection of your legacy. A properly constructed trust can help protect your estate from your heirs’ creditors or from beneficiaries who may not be adept at money management.
  • Privacy and probate savings. Probate is a matter of public record; a trust may allow assets to pass outside of probate and remain private, in addition to possibly reducing the amount lost to court fees and taxes in the process.

There are several basic types of trusts

  • Marital or “A” trust – Designed to provide benefits to a surviving spouse; generally included in the taxable estate of the surviving spouse
  • Bypass or “B” trust – Also known as credit shelter trust, established to bypass the surviving spouse’s estate in order to make full use of any federal estate tax exemption for each spouse
  • Testamentary trust – Outlined in a will and created through the will after the death, with funds subject to probate and transfer taxes; often continues to be subject to probate court supervision thereafter

Revocable vs. irrevocable

The major distinction between trust is whether they are revocable or irrevocable.

Revocable trust: Also known as a living trust, a revocable trust can help assets pass outside of probate, yet allows you to retain control of the assets during your (the grantor’s) lifetime. A living trust is a legal document that states who you want to manage and distribute your assets if you’re unable to do so, and who receives them when you pass away. Having one helps communicate your wishes so your loved ones aren’t left guessing or dealing with the courts. It is flexible and can be dissolved at any time, should your circumstances or intentions change. A revocable trust typically becomes irrevocable upon the death of the grantor.

You can name yourself trustee (or co-trustee) and retain ownership and control over the trust, its terms and assets during your lifetime, but make provisions for a successor trustee to manage them in the event of your incapacity or death.

Although a revocable trust may help avoid probate, it is usually still subject to estate taxes. It also means that during your lifetime, it is treated like any other asset you own.

Irrevocable trust. An irrevocable trust typically transfers your assets out of your (the grantor’s) estate and potentially out of the reach of estate taxes and probate, but cannot be altered by the grantor after it has been executed. Therefore, once you establish the trust, you will lose control over the assets and you cannot change any terms or decide to dissolve the trust.

An irrevocable trust is generally preferred over a revocable trust if your primary aim is to reduce the amount subject to estate taxes by effectively removing the trust assets from your estate. Also, since the assets have been transferred to the trust, you are relieved of the tax liability on the income generated by the trust assets (although distributions will typically have income tax consequences). It may also be protected in the event of a legal judgment against you.

Deciding on a trust
State laws vary significantly in the area of trusts and should be considered before making any decisions about a trust. Consult your attorney for details.

As mentioned above, by creating a trust, you can:

  • Determine where your assets go and when your beneficiaries have access to them.
  • Save your beneficiaries (your children, for example) from paying estate taxes and court fees.
  • Protect your assets from creditors that your beneficiaries may have, or from loss through divorce settlements.
  • Direct where remaining assets should go in the event of a beneficiary’s death. This can be helpful in a family that includes second marriages and step-children.
  • Avoid a lengthy probate court process.

This last point is a crucial one, as trusts also allow you to pass on assets quickly and privately. In contrast, settling an estate through a traditional will may trigger the probate court process — in which a judge, not your children or other beneficiaries, has final say on who gets what. Not only that, the probate process can drag on for months or even years and may even become a public spectacle as well.

With a trust, much of that delay can be avoided, and the entire process is private, saving your beneficiaries from unwanted scrutiny or solicitation.

References:

  1. https://www.fidelity.com/life-events/estate-planning/trusts
  2. https://www.legalzoom.com/sem/ep/living-trust.html
  3. https://www.forbes.com/advisor/investing/trust-fund

61% of Americans Paid No Federal Income Tax in 2020 | CNBC

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By Robert Frank, CNBC Wealth Reporter and a leading authority on the American wealthy

“The hardest thing in the world to understand is the income tax.” Albert Einstein

  • More than 100 million U.S. households, or 61% of all taxpayers, paid no federal income taxes last year, according to a report from the Tax Policy Center.
  • The pandemic and federal stimulus led to a huge spike in the number of Americans who either owed no federal income tax or received tax credits from the government.
  • The main reasons for the spike — high unemployment, large stimulus checks and generous tax credit programs.

More than 100 million U.S. households, or 61% of all taxpayers, paid no federal income taxes last year, according to a new report.

According to the Urban-Brookings Tax Policy Center, 107 million households owed no income taxes in 2020, up from 76 million — or 44% of all taxpayers — in 2019. The main reasons for the spike — high unemployment, large stimulus checks and generous tax credit programs — will largely expire after 2022, so the share of nontaxpayers will fall next year.

“The COVID-19 pandemic and the policy response to it led to an extraordinary increase in the number of American households that owed no federal individual income tax in 2020”, writes Howard Gleckman, Senior Fellow at the Urban-Brookings Tax Policy Center.

The share of Americans who pay zero income taxes is expected to stay high, at around 57% this year (2021), according to the Tax Policy Center.

“Congress can raise taxes because it can persuade a sizable fraction of the populace that somebody else will pay.” Milton Friedman

In contrast, the top 20% of taxpayers by income paid 78% of federal income taxes in 2020, according to the Tax Policy Center, up from 68% in 2019. The top 1% of taxpayers paid 28% of taxes in 2020, up from 25% in 2019.

In 2021, Congress increased the size of the child tax credit, the earned income tax credit, and the child and the dependent care tax credit — all of which erased the federal taxes owed for millions of American families.

Twenty million workers lost their jobs. Many were low-wage workers who were paying very little income tax before the pandemic hit. Effectively, no household making less than $28,000 will pay any federal taxes this year due to the credits and tax changes, according to the Tax Policy Center. Among middle-income households, about 43% will pay no federal income tax.

Federal income taxes do not include payroll taxes. The Tax Policy Center estimates that only 20% of households paid neither federal income taxes nor payroll taxes. And “nearly everyone” paid some other form of taxes, including state and local sales taxes, excise taxes, property taxes and state income taxes, according to the report.

“We contend that 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.” Winston Churchill

“There is a dichotomy between how capital is taxed in this country and how labor is taxed. That seems wrong to me, to have these two sources of wealth that are taxed so differently”, according to Billionaire philanthropist John Arnold.

References:

  1. https://www.msn.com/en-us/money/markets/61-25-of-americans-paid-no-federal-income-taxes-in-2020-tax-policy-center-says/ar-AANt4dJ?ocid=uxbndlbing
  2. https://www.taxpolicycenter.org/taxvox/covid-19-pandemic-drove-huge-temporary-increase-households-did-not-pay-federal-income-tax