Jobs Rob

For over three months now, the California State Legislature has been in a rugby-like scrum over how to fix our $42B (and counting!) budget deficit. Finally, there seems to be some leeway, and we citizens are getting a peek at how much more we’ll be expected to pay to patch the hole.

So far, it looks like the there’ll be another $.12 per gallon gas tax, income taxes will rise, sales tax will go up another penny (which means in my area, we’ll be forking over almost a dime for every dollar we spend!), as well as a myriad other fee hikes and excise taxes. And almost all of it will be borne by the Middle Class.

Typical job-holders take it in the teeth with taxes. Commuters heading out to the daily grind pay the gas tax. Consumers buying necessities pay the sales tax, with money that was already taxed as income! And the income tax comes from wages, of course. It sounds antithetical, but having a job is no way to make money!

Earning dollars with your blood and sweat is a losing proposition, and yet most people never consider any other possibility. Then they get laid off or injured. The paycheck disappears ... and they’re wrecked.

Consider how a “wealthy person,” who in reality makes the exact same income as the wage slave, will get to avoid paying all these taxes. Well, his income comes from assets, not from a job. So much for the commute. As a corporation, he can buy his work-related necessities (including some clothes and meals!) with pre-tax dollars, and even in some cases avoid the sales tax. And asset income is taxed at a lower rate than wages. Bonus: Since his income doesn’t require his hands-on involvement, like a regular job, he’s free to move out of high-tax California altogether.

So, what does an asset look like? It’s anything that doesn’t require your hands-on involvement to generate income. Maybe it’s equipment that you rent out. Or a business or rental property that’s managed by someone other than you. Or stocks that pay dividends. Or even interest-bearing savings (just make sure it stays ahead of inflation!).

Employers aren’t (necessarily) evil when they lay off workers. The purpose of the business is to generate an income for the owner. If what you can produce more than makes up for the liability of your salary, plus health/disability/unemployment benefits, plus taxes, plus guaranteed leave, plus liability insurance, plus heaven-knows-what-else our government will decide is the responsibility of that employer, then you’ll keep your job. Otherwise, you won’t. It’s not personal, it’s math.

Get on the correct side of math. Start looking for ways that you can be an owner. Cut your expenses to the bone so you can send your savings out to work for you!