There was a man lurking on the farm last week.
Dressed in casual clothes and wearing a black mask, he walked up the hill behind the house. Then he peeked around the back of the barn. Then he walked to the mailbox and stuck something in it.
As he drove away, we spotted something on his vehicle we didn’t want to see.
The words on his door showed that he was from the county… and he wants his money.
You see, we built a shed over the winter. It’s not very big and certainly isn’t fancy. It doesn’t have electricity or running water. In fact, it’s not even attached to the ground. We built it on skids in case we don’t like where it is.
But the county has been watching, so we followed the rules. When we made our plans for the new shed, we filled out a piece of paper and mailed in our check.
After some back-and-forth about a nearby floodplain, our overlords nodded their heads and gave us permission to build.
We tacked their building permit to a nearby tree and got to work.
And now that we’ve finished our job, they want more of our money.
That fella who invited himself to the farm was a tax assessor. That shed increased the value of our land, he says… and now he wants to raise our property taxes.
It’s quite a scheme they’re running.
We own the joint and take on all the risk from drought, fire and falling property values due to government ineptitude… and yet it collects rent.
But that’s nothing new. You’ve heard the woes and likely cried them yourself.
We won’t pick the scab.
But we will remind you that states are broke and counties are out of cash. And when they dry out one moneymaking well… they drill another.
Reaching in the Other Pocket
It’s the nasty notion that brings us back to the mailbag this morning…
I recently read that the state of New York is looking to tax billionaires on a mark-to-market basis. The rationale seems to be that since stock prices go up every year, tax revenues should also increase. It sounds like a really loud bell indicating a market top when the tax man wants in on the stock market action.
Also, if owners of closely held companies are forced to sell stock to pay taxes after a good year, that can’t be a positive for the next year’s stock performance. – Reader C.W.
We’ve heard the rumors. We’ve railed against them in this column.
It’s a disastrous idea that’s been talked about on many levels… and, depending on who’s touting it, it doesn’t always involve the ultra-rich.
The implications of this scheme are clear. It creates a massive disincentive to own stocks, but the keepers behind such things know there’s no other choice.
Jeff Bezos, for instance, certainly isn’t going to cash in his chips to avoid the tax. The capital gains taxes would kill him. And what’s he going to do with the cash… buy real estate? Ha. The property taxes would eat him alive.
We don’t think our leaders are desperate enough to pull this stunt yet. The whirl of the printing press is still too loud for them to discuss the notion in depth.
But it will come.
We have to pay taxes on our real wealth each year… someday soon we’ll have to pay it on our paper wealth too.
And, yes, it will be ugly.
But by then, it won’t be as ugly as other alternatives.
That’s why we say you’d better get while the getting is good.
Dow 100K will be here soon enough.
Invest in Wheelbarrows
Dow 100,000? With that much money being printed, I am surprised no one is trying to recommend wheelbarrows to cart the cash as in German hyperinflation. Unless getting rid of cash is actually gonna happen. 5G, boon that it is, will allow tracking all transactions for the ultimate in taxing convenience. When cash or any other valuable commodity is outlawed, please tell me again how crypto is somehow untouchable. Just a Congressional fiasco of a law away. If no answer, then please discuss in a column. I trust it as far as I can throw a bull by the ring in his nose. Comments? – Reader M.D.
We love comments like this. It shows folks are connecting the dots.
Several countries are currently working on their own forms of crypto – Japan, England and China seem to be the most serious.
Washington is pondering the idea too, but it’ll move too slowly to build anything worthwhile. It’s hardly gotten its current system into the digital realm.
But we have some strong clues where things will head…
During the first round of pandemic stimulus talks, Nancy Pelosi tossed in a last-minute proposal to force the Fed to launch a digital currency. It quickly got pushed aside, but her intent was clear. She wants, as the savvy reader above hints at, a way to deposit funds into the accounts of those who need it… and take it from those who don’t.
That’s an essay that deserves its own space. But what about the question M.D. asks… What’s it all mean for bitcoin and the like?
The news isn’t great. Bitcoin is already the target of many laws.
But as we said yesterday, we all know we’re going to die… but that doesn’t keep us from living.
Bitcoin will never be the world’s reserve currency. But it will evolve into a trusted form of payment.
Remember, the feds outlawed booze too.
How’d that work out?
Don’t bet the farm that stocks will soon be valued in bitcoin. It won’t happen. But digital currencies are worth a percent or two of your overall investable assets.
Prices are likely to rise. And it’s the sort of thing you’ll be glad you have if you ever need it.
I am an old Amwayite, so I have believed your message for a long time. At 77 years old, I am diving back into the markets because I want to show my kids how it is done. I have gone as far as I can go on a limited budget by just buying stocks. Monday I am buying into Codebreaker Profits. Why spend that kind of money that I really don’t have on Manward? Because your stock picks are really outpacing the other service I have used by a very comfortable margin. Or as you would say, “I am putting my money where it is best treated.” You have really proven yourself to me. Thank you so much. – Reader C.G.
That’s a very powerful message… showing your kids how to invest by doing it yourself.
Few other things can set up a generation for a life of Liberty than knowing how to make smart choices with money.
If our education system taught that No. 1 rule of money – that it goes where it’s treated best – many of today’s headlines would be much different.
We’d certainly have fewer folks wandering our property looking to take an easy buck from us.
Keep the comments and questions coming. Send us an email at email@example.com.