[Moneyguy1]

The following is an exerpt from an interview with Jim Trippon, a Huston based CPA and can be found in its entirety in the June 2004 issue of Investment Advisor. It is submitted without editorial comment by me.

Minimizing tax liability is, of course, one of the key factors for maintroll and who work for a living, maintaining a successful retirement and in building wealth. I probably have a little bit different perspective on taxes than a number of your readers, being a CPA as well as investment advisor.
The way I look at it, there are really two systems of taxation in this country. There's one tax system for people who are on a payroll and who work for a living, and there's another for people who live off investment assets.
For people in the first group, typically the tax rate is somewhere between 30% and 35%, whereas people who live off invested capital will typically have a tax burden of anywhere from zero to 15%.
You might ask why someone who works behind the counter in a coffee shop would be in a higher tax bracket than a millionaire. Typically they are, which shouldn't be surprising if you consider the background and wealth of who typically goes into politics and who writes the tax codes and where their interests lie.
In the past year we've had the biggest tax cut for millionaires in years, when we cut the dividend tax rate 60%. The typical working person behind the counter in a coffee shop, or in an executive position with a corporation, didn't get a 60% tax cut last year.

Enjoy

Bob S.
Registered Financial Consultant