My July 4th vacation was, quite simply, amazing. I’d never been to Boston before, and to tour the city during the days surrounding Independence Day made my visit particularly poignant. Truly, this is a city with history baked into every street corner. We visited sites that, until now, I had only read about. Bunker Hill. The Old North Church. The Old State House. The Boston Massacre Site. The list goes on and on. It was fascinating to be right there where one event after another led our country toward revolution. What finally pushed the people over the edge to revolt once and for all against England and Parliament? Taxes.
Simply put, the colonies were being oppressed by taxation. If you’re not familiar with James Otis (whose grave I visited just footsteps away from Paul Revere’s tombstone), you’ve surely heard his famous quote: “taxation without representation is tyranny”—the phrase he used in 1761 to argue against Parliament’s imposition of taxes on the colonists who had no representation in the House of Commons. Just a few years later, in 1765, Parliament approved the Stamp Act, which required colonists to pay taxes on every page of printed paper they used. The rest, as they say, is history. Although an organized boycott of British goods and general unrest led Parliament to repeal the Stamp Act in 1766, the Tea Act of 1773 was the straw that broke the camel’s back. Patriots (no, not those Patriots!) organized the Boston Tea Party that same year, famously tossing 18,000 pounds of British tea into Boston Harbor. Three years later, on July 4, 1776, the Declaration of Independence was adopted—the document that started the Revolutionary War. And it was all (or at least mostly) about, you guessed it, taxes.
Revisiting these stories from the past—and visiting many of the actual sites—was a great reminder of the importance of taxation. Benjamin Franklin is the one who wrote, “Nothing in this world can be said to be certain, except death and taxes.” And yet over-taxation is something even the most patriotic Americans among us would like to avoid. The good news is that, with a little wise planning, there’s no need to toss any tea into the harbor. Here are 5 simple steps to take today to help minimize your own taxes come April 15, 2020:
One last thing: don’t let confusion thwart your efforts! The Boston Massacre may never have happened if it weren’t for a very unfortunate confusion about a building fire. With protestors in the streets and British troops at the ready, a fire broke out. The church bells rang and someone yelled “FIRE!” to alert people to evacuate the burning building. When the British officers heard the yell, they confused it for an order. They fired shots into the crowd, killing five people and wounding seven others. All over a misunderstanding. Similarly (though not so tragically), stock losses aren’t always a bad thing. In today’s heightened stock market, your losses can be used to offset significant gains. Instead of yelling “FIRE!,” ask your financial advisor to explore how tax-loss harvesting might lessen the impact of taxable gains. What a great way to follow in the footsteps of our Founding Fathers!
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