Why The Rich Seem to Pay Less in Taxes

  • In 2018, the working class American paid a higher percentage of income tax than the rich. Billionaires paid about 22% in federal income taxes while the average American paid 28%. 
  • Only 10% of billionaires’ income comes from their salaries. The other 90% comes from assets like real estate investments, stocks, and bonds.
  • Join Ark7 and access capital gains tax to keep more of your money. Think like a billionaire and make the most of your hard work. 

You work hard to make money and provide for your household. With each paycheck, taxes are deducted. These government mandated taxes sustain federal programs and upkeep for the country. You would expect that all citizens pay around the same percentage of their various incomes. We share the same country, so we should all do our equal part to give back, right? However, this isn’t the case. 

graph showing tax differences

In 2018, the working class paid a higher percentage of income tax than the rich. Billionaires paid about 22% in federal income taxes while the average American paid 28%. How is this possible?

The answer is found in the details of tax forms and sources of income.

capital gai

 

Income tax vs Capital gains tax

What you earn at your typical salaried job is called ordinary income. Most of the time this is one’s main source of income. In contrast, only 10% of billionaires’ income comes from their salaries. The other 90% comes from assets like real estate investments, stocks, and bonds. These are taxed as “capital gains” instead of an income tax. The capital gains tax is a much lower tax than the standard income tax and allows billionaires to keep more of their income. 

For example, let’s say Jane earns 1 million dollars a year from her job. John earns 1 million, but with only 20% from his salary, 30% from real estate investments and the other 50% from stocks and funds. After taxes, Jane would earn less actual take-home income after paying taxes than John will.

So, how can the rest of us non-billionaires get a piece of the tax break? The answer to save money is simple: invest. 

 

Choosing an investment

It’s wise to pick a stable investment when aiming for long term financial gain. One of the most stable investments is real estate. Some people begin investing with the traditional buy and sell/rent option, but this racks up a lot of hours, money and effort on your part. Further, it only allows you to focus on a small number of properties. Another option is to turn to REITs (real estate investment trusts). You can invest in REITs through some public offerings, and some private REITs, and you can get an annualized return of almost 7%. However, you lack control in your invested property’s management and pay extra fees included with REITs that lessen your profit. 

All of these problems find solutions in Ark7’s online investing platform. Ark7 offers fractional real estate investment in the hottest locations (certified by co-founder Jim Holt who has over 15 years of real estate experience). There is no minimum investment, with shares starting as low as $5.40. Even if you aren’t a millionaire, you can still access amazing tax benefits. You can earn passive income because we manage the property and its tenets for you. You can be assured that we have your  best interests in mind, as Ark7 is right alongside you investing up to 10% in each property. Make the smart choice to join Ark7 and access capital gains tax to keep more of your money. Think like a billionaire and make the most of your hard work. 

Ark7 helps pick the perfect positioning for real estate properties while handling the property management to save you time, answering the downsides of investing in real estate.

With Ark7, you invest in the properties themselves, as each has its own Series LLC. You receive a Schedule K-1 form that considers the company’s losses and gains as your own. It allows you to be taxed only once for your earnings while being responsible only for the performance of the number of shares you own. In addition, losses carry over yearly, so it subtracts from the next year’s income. This saves you money on your gains, as the IRS sees your income as your new income minus the previous losses from years past. 

Are you ready to begin investing and make the most of your returns? Make an account on Ark7 to browse properties in Berkeley, Seattle, and Austin. Don’t let billionaires outsmart the system and leave you in the dust. Learn from their tactics and begin investing today. 

 

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