If you read the books "The Millionaire Next Door" or "The Millionaire Mind" you may be surprised to learn that most millionaire's are just ordinary people.
The majority of millionaires aren't living in gaudy mansions or driving Ferrari's. They have average sized homes and drive Ford F150's. They DON'T regularly drink champagne or eat caviar. They drink beer and eat hot dogs. They DON'T wear designer clothes they wear Levi jeans.
In a 10 part series we will discuss the misconceptions many people have about being a millionaire. Truths that may just burst your wanting to be a millionaire bubble.
In part 6 millionaires do pay taxes. Leona Helmsley's famous quote, "We don't pay taxes. Only the little people pay taxes," simply isn't true.
In fact, the top i percent of earners paid nearly 40 percent of federal income taxes in 2005. According to the IRS that's a whopping $368 billion. The wealthy tend to derive a higher portion of their income from dividends and capital gains, which are taxed at lower rates than wages (15 percent for long term capital gains versus 25 percent for middle class wages.) High income earners pay only pay Social Security tax on the first $97,500 of income.
The wealthy get their big savings from owning a business and deducting everything related to it. Landlords can also depreciate their commercial properties and expenses like mortgage interest. All without doing any creative accounting. Then they have tax shelters, trusts and other mechanisms the super rich use to shield their wealth. A approximately 2 million Americans have a unreported offshore account, and income from foreign tax shelters costs the United States $20-$40 billion a year. Vernon Jacobs, a certified public accountant in Kansas who specializes in legal foreign accounts says, "an increasing number of people want to establish an offshore account."
I know a several people afraid to make more money because the have to pay more taxes, but as you can see there are ways to grow wealthy and preserve your assets. You shouldn't be afraid to make more money because you will have to pay tax. Paying more tax is good. It means your making money.
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