Todd Mardis: As I started in the financial services industry in 1993 and during all aspects of financial planning; retirement planning, disability, long-term planning for death, disability, and retirement, really were the 3 topics that we covered. We started evolving into taxes, but more in the state tax level. And when I was working with a number of different Tax attorneys across the South-East, and really, across the country, it became very evident that my success with business owner clients who get their state tax planning paid less taxes.
And so, it kind of became evident, as we all know planning, having a plan is better than not having a plan. And so, over the years, you know there was a frustrating level that I felt, and the biggest liability that my clients had was taxes, right? 01:08 (inaudible) biggest liability is at home because it is the biggest purchase most of us would ever make.
And so, I was introduced to a group of attorneys and CPAs and advisors, who felt like there were ways to mitigate these taxes by doing the same thing that I’ve been doing with my super-successful business owners. And we started doing planning on a yearly basis to reduce income taxes, very much the same way we did planning to reduce the state taxes. And what is fundamentally different about the planning is very little. There is a negative persona in the public when you talk about tax planning, meaning you’ve got to be cheating or doing something illegal or risky. However, those same parameters aren’t applied to a state tax planning, right? Someone has a $20 million estate, and they do some planning, they owe $2.5 million in state taxes. Same business owns $20 million net worth, they don’t do tax planning, and they owe $10 million in the state taxes or their family owes $10 million in state taxes. Well, no one would consider the family that owes $2.5 million having done anything nefarious right? They just did planning. We are very much using the same types of models and planning processes just more gear to income tax on a yearly basis versus a long-term state tax problem that you may not have for 20 or 30 years.
And we may be looking at 20/25% of our US population on unemployment at some point, in the very near future. So, the question then becomes “how do we pay it back?” And I think it is really common knowledge to say “the only way the Federal Government gains money in which they will need to pay this, Cares Act is to taxation.” Now whether that comes in the form of high marginal rates or higher corporate effective tax rates and or especially allocated tax. You know we have the Medicare Tax now, we have the Medicare Payroll Tax, specifically allocated to propel (popup) Medicare. The same thing could be said of the Covid-19, it is very easy to foresee a Cares Act Tax, or Covid-19, or Pandemic 2020 Tax.
They would be a flat tax on us for a significant period of time to recover the 5, 7 Trillion dollars that we are going to ultimately spend, you know, in providing relief for individuals who have lost their incomes.
So, most of our clients aren’t looking to go buy a Ferrari, they are driving the vehicles they want to drive, they are not looking to build a bigger house, they just want to be more efficient. And they are saying “hey, I want to be paying the amount of taxes I legally have to pay and not a cent more.”
And then, what they do with that money is up to them, but most of them feel like they can contribute to society in a better way with those dollars than what the federal government is doing with them.