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Perhaps I phrased it wrong -- I believe, if you are a person who is extremely frugal, you will also automatically want to reduce your tax liability. Because at
by charlesdm 9y ago
Perhaps I phrased it wrong -- I believe, if you are a person who is extremely frugal, you will also automatically want to reduce your tax liability. Because at the end of the day the result is the same: an expense means money leaves the business, taxes mean that money leaves the business.
It's not necessary.. but probably a personally trait of frugal people. You reduce expenses.
You're absolutely right however that high taxes tend to incentivise reinvestment (so you can tax deduct). But too high taxes also deter entrepreneurship to some extent, because past a certain point a lot of people will feel they're working more for the state than for themselves.
- mulmen 9y agoSure but you can reduce your tax liability to the maximum extent of the law and still pay high tax rates. This is still frugal. I don't disagree with your second paragraph but I don't see how it relates to frugality.
- charlesdm 9y agoYes, of course. But only if the law says you have to; that's what legal avoidance is all about. If you legally find a way to reduce your liability to zero (i.e. like Kamprad did), then you're also being frugal? This obviously might not be entirely ethical, but it's extremely frugal. :)