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The Seven S.E.C.R.E.T.S. of the Money Masters by Peter Hirsch, Robert Shemin

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SECRET 6: Tax Efficiency

Federal taxProbate tax
State taxBusiness tax
Sales taxProperty tax
Local taxStamp tax
Gift taxIncome tax
Transfer taxPayroll tax
Deed taxSelf-employment tax

Welcome to the great state of Taxes! Everything really is bigger here, and destined to get bigger still.

As these words are being written, the U.S. national debt stands at more than $12 trillion, and it increases by more than $4 billion every day. To get out of this sorry situation, the government has two choices. It could dramatically increase inflation, driving down the worth of the dollar to almost nothing, or it could raise taxes exponentially. Which scenario do you think is most likely?

Most Americans already think they are paying too much in taxes, so it's only natural that when we hear about ways to cut our tax bill, we listen eagerly. For young men and women who are just out of college and starting their first jobs, that orientation program they attend on the first day of work typically includes a lengthy sales pitch about the company's 401(k) program. Your money can grow tax free! That's right! You won't pay a dime in taxes until you retire and begin drawing it out 30 years from now! Wow, sign me up!

Back up and take a closer look.

Obviously we need something other than Social Security payments in order to have a comfortable retirement. When the Social Security program was created, it was designed to carry each recipient through only a year and a half. Life spans were shorter then, so most people died ...

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