Todd Mardis: Do wealthy people pay more or less in taxes? That’s one of the first things that I bring out with clients when I meet with them. Because they often walk into the room and say “Hey! You’re doing tax planning; this must be illegal or risky or you are doing something wrong.” But yet when I ask a client that very question, the answer is always “they pay less.”
So, the next part of my question is “Are there more than one levels of taxation, are there more, is there a Tax Code designed for Warren Buffet that is not applicable to Todd Mardis?” And obviously, the answer is “No”. So, how are these individuals who make more money than we do in a week, maybe more than we make in a year, how are they paying less taxes than my client who is a doctor in Gadsden Alabama making $750,000? How is his effective tax rate of 33% and Warren Buffet who makes millions and millions of dollars a month, how is his effective tax rate 14%?
It is really simple, it is planning, Warren Buffet has individuals that are working for him on a proactive basis, on an annual basis, helping him and his advisors run to the Tax Codes, see what they can legally do to reduce their taxes.