TAX

The Tale of Lady X and the Vanishing Wealth

Once upon a time, in a world where money could mysteriously disappear, there lived a shrewd investor known as Lady X. She was wise, hardworking, and determined to secure a bright future for her loved ones. One day, Lady X earned $1,000—a small fortune in her land. But, as with all good things, the government quickly demanded its share. Lady X paid a hefty 60% in taxes, leaving her with just $400.

Not one to be discouraged, Lady X decided to invest her remaining $400 in a fine house, a safe haven for her family. However, this house came with a catch: over the next twenty years, Lady X had to pay another $400 in taxes. Despite the mounting tax bills, she remained optimistic, hoping that her investment would stand the test of time.

But life has its twists and turns, and eventually, Lady X passed away, leaving her precious house to her heirs. The government, as it often does, knocked on the door, demanding another cut. This time, an 80% inheritance tax reduced the $400 house to a mere $80.

Lady X’s heirs, now burdened with this drastically reduced inheritance, sought refuge in the volatile world of cryptocurrency. They took their $80 and invested it, hoping to grow their wealth. After a wild ride in the crypto market, they decided to cash out, only to be met with yet another tax bill—this time for $24. With no dollars left, they had to sell some of their remaining crypto, which resulted in yet another tax, this time $7.

When all was said and done, Lady X’s heirs were left with just $49 from the original $400. And if they dared to spend that $49 on food, they would face yet another $10 in VAT, leaving them with a paltry $39.

The Moral of the Story

From Lady X’s initial $1,000, the family was left with less than 4% of the original sum after all the taxes had taken their toll. This journey through income taxes, inheritance taxes, capital gains taxes, and even sales taxes shows a staggering 95% effective tax rate, with inflation pushing it closer to 99.9%. The government’s share at every turn made it feel as though Lady X’s wealth had vanished into thin air, leaving her family with little more than a lesson in the harsh realities of taxation.

Lady X’s story raises a crucial question: how can wealth be preserved for future generations when every step is met with such formidable financial obstacles?