To Whom Do Taxes Belong?
My investment strategy is based on the fact that I’m not a great investor. I invest in companies that generate cash and has a long and good track record in allocating their profits1 These are companies that reinvest into their own business or purchase other companies rather than distribute the earnings as dividends. Companies are better allocators than I am.
Shohei Ohtani is a baseball star who deferred almost all of his compensation. Because he’ll receive most of the money after he presumably moves back to Japan, he won’t pay taxes to California because of it. California politicians think this is wrong, that this money belongs to the state of California.
“We’re talking about over $90 million that could be going to state programs. This is money that is earned here. It should be taxed here.” - State Senator Josh Becker
The attitude that your money belongs to the government and that you’re lucky you get to keep any of it is infuriating.
The government is the worst allocator of money. That should be reason enough why taxes should be as low as possible.
The government has no feedback mechanism to tell if spending is effective or not. There’s no incentive structure. There’s no accountability. If you go through The Psychology of Human Misjudgment, the government is susceptible to every tendency that’s mentioned.
Why would you allow a mismanaged, corrupt system to allocate your money?
Not financial advice.