In this compelling episode of ‘Retirement Unpacked’, Al Smith explores the intriguing intersections of historical taxation systems and modern financial strategies. Discover how the past can provide valuable insights into handling today’s economic challenges. Furthermore, delve into the thought-provoking discussion about the rapid development of artificial intelligence and its potential impacts on the economy. The episode also honors the inspiring legacy of Charlie Kirk, reflecting on his enduring influence and positive contributions to society. Al provides his outlook on retirement strategies, emphasizing proactive financial planning to accommodate unforeseen life events.
00:02:40 Introduction to Retirement Unpacked with Al Smith
00:03:04 History of Taxes: Ancient Civilizations to the Modern Era
00:16:53 Continued History of Taxation and Insights
00:23:55 Modern Concerns: AI and Technology Impacts
00:27:34 Honoring Charlie Kirk and Closing Remarks
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Welcome to Retirement Unpacked with Al Smith, owner of Golden Eagle Financial. You want a retirement plan that alleviates your fears about the future so you know your money will last. As a chartered financial consultant, Al Smith will help you find a balance between the risk and reward of the market and the safety of your retirement income. And now, here’s your host, Al Smith.
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Welcome to another program of Retirement Unpacked. I want to thank you for tuning in. Hopefully you’ll find the information I’ll be talking about interesting and I have some non-financial information I’ll be sharing a little bit later. And one of the things I’ll be talking about is taxes. I’ve had a lot of shows about taxes. There’s a lot of things we should pay attention to when it comes to taxes. And that being the case, I thought I would dive into a little bit about the history of taxes and global history of taxes because they go back a long way. Now, as we’re covering some of this information, if you have concerns about your own plan toward retirement, or if you’re in retirement now and you think your tax circumstances can be improved and you’d like maybe a second opinion about that or something like that, give my office a call and we can have a cup of coffee at the office and have a conversation and see if there are ways to improve your tax circumstances, which obviously means lowering your taxes, if that’s an option. My number is 303- 744-1128 and I’m presently having a little difficulty with my landline so I highly suggest you contact me by my cell which is 303-875-4572. The problem with the landline will be alleviated within a few days. I could describe some of the real fun I’ve been having with AT&T and Comcast, but that would make for a very boring segment of my show. History of taxes. What I find extremely interesting is that taxes have been around longer than currency or coinage. You know, we know coinage goes back to Greek and Roman times and so forth. There’s references to coinage in the Bible. Render unto Caesar what is Caesar’s. Jesus asked the Pharisees to say whose image was that on Denarius when they were trying to trap him. But what’s interesting is 3000 B.C. in Egypt, they did an assessment of the agricultural property that was owned by some of the folks who lived in Egypt. And then they would assess that in the form of a tax. But obviously it was not paid in coinage or currency or banknotes or anything like that because that did not yet exist then. in Egypt. So what was used in its place is grain. So in other words, if the pharaoh or representatives of the pharaoh went to your farm in Egypt and you had 100 head of cattle and maybe 50 acres of grain or something, he would likely be taxed to whatever degree they felt was fair. And in that case, it would often be, not often, the only way it would be exchanged way back then was in the form of grain, because grain prior to coinage and currency and banknotes and so forth, grain was an exchange of things of value. What’s also very interesting is that, again, taxes preceded coins and currency. The Greeks and the Romans, they certainly had taxes. The Rosetta Stone, which is talked about, that’s the organization that provides all the languages and so forth, it unlocked the meaning of hieroglyphics. and i’m not a historian or anything like that but what i also learned is that the rosetta stone besides unlocking the meaning of hieroglyphics it was partly a tax document and that goes back to 196 bc Caesar Augustus had what is called a transaction tax. And it was called the, it was only 1%, and it was based on transactions, and it was called the Centesima Rerum Venalium. Centesima, the C-E-N-T, you’ll know that’s the Latin for 100, a century, a centenarian, and so forth. So centesima rerum venalium is the 1% transaction tax put forth by Caesar Augustus. Now, we almost chuckle when we think about our own taxes and hear about 1% and so forth. Income taxes, to some degree, have been around. There was an emperor in China called Wang Meng in 9% B.C. that had a 10% net agricultural income tax. And people had to… basically provide that income to the government so if you had a farm in china 10 of the revenue of that farm by revenue i mean whatever profit uh had to go to the government that that was at 9 bc that was one of the first representations uh that there ever was of an income tax Property tax, on the other hand, was around in early times in Babylon, in Egypt, Persia, and China. And the value of the property wasn’t necessarily measured by the sale value of the land as much as the production value of the land. How much could be raised in crops, how much could be raised in sheep and cattle, and things of that nature. So property tax has been around for some time also. And it was also a matter of exchange. Roman soldiers, for example, after a number of years of service, would often be granted a certain number of acres for their pension, so to speak. And I’ve had shows on the history of retirement plans William the Conqueror in Great Britain, they had a land value tax, which is like a property tax, and the reason he needed that, at the time of William the Conqueror, England and Great Britain in general was being invaded on a regular basis by Danes, and it takes a lot of money to protect your country, and so there was a land value tax assessed by William the Conqueror. Tariffs are a form of taxation, and they’ve been around going back almost as far back as the Egyptians, from 3,000 to 2,000 B.C. Metals and textiles were also the things that had heavy tariffs on them. In addition to that, a lot of other goods, wool, leather, butter, cheese, a lot of… commodities had tariffs on them. Very, very, very common. In the United States, we are familiar with the Boston Tea Party and some of the early taxes and so forth. The American colonists were subjected to a lot of different taxes. And that big statement, taxation without representation, is very true. Although what a lot of people don’t know, I didn’t know it until I read it, is the amount of taxes being paid by the colonists was actually less than what was being paid by citizens of Great Britain. But although that was the case, they had no representation in England. There were import duties, there were excise taxes, there were poll taxes, and a poll tax is basically a tax you have to pay in order to vote. There was an early form of an income tax, but it was lower than the tax that was paid by the folks in Britain. And following the Seven Years’ War, Great Britain needed cash, and so they turned to the colonists, and there were quite a few acts passed in order to extract more money from the colonies. The Sugar Act was passed in 1764. The Stamp Act in 1765. The Stamp Act was actually a tax on documents, legal documents. So when deeds or contracts were prepared, there was a tax associated with that. The most severe tax, or all-inclusive, is the Townsend Act. And in it, 72 items were taxed. And included in those were obviously tea. And that was what resulted in the Boston Tea Party. Also, there is a Tea Act passed in 1773, and that provided a monopoly for the East India Tea Company, and the East India Company was a very powerful economic entity at that time, and it provided a monopoly on tea for anyone in the colonies who wanted to purchase it. Moving further ahead, after our country gained its freedom, when George Washington was president, and Alexander Hamilton, I believe, was Treasury Secretary, correct me if I’m wrong, but there was a seven cent per gallon tax on alcohol, which resulted in the Whiskey Rebellion. which is a rebellion against that tax, and it ended up being a violent rebellion, which was put down by federal government troops. Some other things about some of the taxes that are in our history. The income tax, with the exception of a short recovery after October, The Civil War in 1862, there was a brief period where there was an income tax, and it was actually quite modest, between 2% and 6%, depending on your income. And they tried to continue that, but it was repealed after 10 years. And when they tried to continue that, there was what was called the Wilson Tariff Act, and that amounted to 2% of a tax on incomes above $4,000 per year. Lots to know about tax, and we’re going to continue with a little bit of that information after the break.
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Al Smith of Golden Eagle Financial knows that the biggest threat to your retirement isn’t what you expect. It’s what you don’t expect. That’s why Al doesn’t just help you save. He helps you plan for the unknown. Things like long-term care, emergencies, and hidden expenses that people never see coming. And he understands the role that each product investment and strategy can play in your financial plan. Al starts with your vision for retirement and he works backward. creating a plan that incorporates more than just investment accounts. Because a successful retirement takes more than just money. It takes specialized strategies from someone who knows what tools are available and how to prepare you for each stage of life. That’s why so many of our listeners trust Al Smith of Golden Eagle Financial to tailor a plan that keeps their specific future in view. So get started on your financial success with Golden Eagle Financial today by sending Al a message on klzradio.com slash money. Investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor. BCM and Golden Eagle Financial Limited are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.
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Welcome back to Retirement Unpacked. We’ve been talking about the history of taxation. And we went all the way back to 3000 BC, how taxes were paid in Egypt using grain because there was no coinage. And we’re up to about the Civil War. The Civil War had about the very first income tax. And the income tax back then was between 3% and 5%, I believe, on incomes of $10,000 or more, which was a substantial amount at that time. And prior to that, a lot of the income that was coming into the federal government was coming from either tariffs or banknotes. The government made between 1 and 1.5% on banknotes. Now, the income tax after the Civil War was continued, or it tried to be continued, under what’s called the Wilson Tariff Act, which tried to tax 2% on incomes over $4,000. And after only about one year, the Supreme Court of the United States ruled that it was unconstitutional. For that reason, it took an amendment to the Constitution, which is the 16th Amendment that was passed February 3rd, 1913, creating income tax. Initially, when income tax was first created in 1913, less than 1% of the population had to pay income tax. There was a 6% tax on incomes over $500,000. Now, the amount of people who had incomes above $500,000 is extremely remote. We’re talking about Carnegie’s, Rockefeller’s, and people like that. and the first taxation was the revenue act of 1913 and it provide a tax of one percent on incomes above three thousand dollars and six percent on incomes above five hundred thousand dollars By 1918, the top tax bracket was actually 77%, but that was on incomes above $1 million. Putting that into perspective, that would be the equivalent on incomes above $1 million. Don’t hold me to this number, but I think it’s above $20 million right at the present rate. The top rates have been around 70% and that has vacillated over the number of years. In 1982, I believe that’s during the Reagan administration, dropped to 50%. By 1988, it was as low as 28%. By 2000, it was up to 39%. And we could have a whole… show talking about all the various changes in the tax code, all those numbers. But I don’t want to bury you with a bunch of numbers. I think what’s important to know is that taxation has grown enormously, just like the growth of the federal government. Not saying that that’s good or bad, but it is something that we need to pay attention to. There’s no question about that. but let’s talk about a few things that are a little bit lighter like oktoberfest oktoberfest has been celebrated going all the way back to 1810 in Munich, Germany. Each year, over 6 million people celebrate that. And the image of blonde-haired, blue-eyed mavens with five liters of beer in each hand, that is accurate. And the reason I know that is I served in the military in Germany, and I had the opportunity to celebrate attend Oktoberfest on one occasion. In celebration in the United States, that’s the very oldest, takes place in La Crosse, Wisconsin, which has a large German population. In Denver, Larimer Square has celebrated Oktoberfest since 1969, and the fete there includes stein hosting, keg bowling, brat eating, and the Long Dog Derby, which is a dachshund race. There’s music, food, a very festive atmosphere, and it runs on two weekends from the 19th through the 21st of September and the following week from the 26th through the 28th. Castle Rock has a celebration that boasts fine local craft brews. It takes place on the 20th of September. And Highlands Ranch has a 5K run on the 27th, which also offers some other celebration and German brews following the run. And if you’re thinking about going to the mountains, Vail and Summit County also have some celebrations. You can probably find a little bit about those on the internet. You can’t hardly watch TV or go on a computer or your phone or anything without hearing about AI. And one question pops up, should we be concerned? Should we fear AI? And I think the answer to that is it kind of depends on whom you ask. But there are reasons to have a genuine concern that AI may be growing too fast. Jeffrey Hinton, who’s been described as the father of AI, left his position as the head of Google’s AI in order to spend time espousing the potential dangers that may accompany too rapid of AI development. Not long ago, an entity called Future of Life created an open letter highlighting the potential dangers of too rapid of AI development. The letter was signed by many CEOs in addition to Steve Wozniak and Elon Musk. One concern is that AI could even become smarter than people. And you wonder, well, gee, how could that be? Well, I find AI helpful in some degrees. Other times, I find it annoying. And I recently created a newsletter, and as I was topping, typing, topping, I As I was typing the newsletter using a Word document, Microsoft Word, I didn’t sign up for any AI assistance. But every single line I typed, there was something that popped up because AI thought that their ideas of what I should be communicating differed from my own. And I had to click extra keys to delete the AI suggestions. Sometimes it’s useful when you mistype a word or misspell a word or something like that, and it gives you the alternatives. But I totally did not care for the AI that was a component of Microsoft’s Word because the way that was working it delayed my creation of a newsletter and i was not real happy about that but that’s basically basically what happened another interesting thing is there was a project that was done and basically what that project did it taught ai how to play chess and within nine days the ai played literally a million matches of chess and it only took the ai nine days before it became the best chess player probably on the planet that ai was actually able to beat any other AI chess player or any other live AI chess player. And I think there are certainly things to be concerned. I think AI is there and it can help us. But what I would like is a way that you can shut off AI or use AI and have us be the source the source of how it’s used. I think it’s something that the growth of it is something we need to be careful about. Many years ago, I don’t remember the title of the show, but there was a show probably going back to the 1980s or something like that, where the good guys in space were fighting the bad guys, and the bad guys were all AI, just kind of like the Terminator movies and so forth. Now, if you really want to know if you should be concerned whether AI is developing too rapidly or not, I think the best way to find that answer is to ask ChatGBT. Let’s remember Charlie Kirk. Regardless of your political leanings, I believe it’s appropriate to honor Charlie Kirk. He was a champion in his work on college campuses. He would gently debate other people who had different views. He never embarrassed those with whom he debated or put them down. He was always kind and respectful in his discourse. He was a true patriot. He loved God and his family. He once said his family is far more important than the people who attended his events or listened to his podcasts. He was a very happy, upbeat guy. He never spoke an unkind word to anyone. His widow Erica let the world know that the work Charlie was doing through Turning Point USA would not only continue, but also grow beyond anyone’s imagination. I believe there’s evil in the world, but I also believe that the power of goodness was exemplified in Charlie Kirk. God bless you. Thank you for listening. Hopefully you’ll be here next week where I’ll have another show of Retirement Unpacked. If you want to have a conversation with me personally, call my office, 303-744-1128. And if you have difficulty, reach me on my cell, 303-875-4572. Thank you.
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Thank you for listening to Retirement Unpacked with your host, Al Smith of Golden Eagle Financial.
