All About Money

Dear Business Builder,

Not too long ago I was in Manhattan … treating The Redhead and the kids to a few Broadway shows and all the sights.

We have a nice suite right on Times Square – a short walk from Rockefeller Center, the Theater District and more great delicatessens than you could shake a Knish at.

I love kosher food. In fact, I’ve always said I shoulda been born Jewish. Not only do they have great food, they’ve got more holidays. Plus, they’ve got great-looking women(!). And anytime I see a religion that uses that much wine in their observations – hey: I’m IN!

But alas, I was born a poor, whitebread Anglo-Saxon protestant straight male. And not when being a straight white male (SWM) came with any perks, either.

Due to a combination of bad luck and poor personal planning, I was born into this fraternity just as it was becoming the one minority group it’s politically correct to despise.

These days, us SWMs get the blame for just about everything – from slavery, to the subjugation of the Indians, to the oppression of the Chinese, to the repression of women, to the rape of the environment, to the heartbreak of psoriasis.

Now, don’t get me wrong: It’s not that I wouldn’t have just loved to have snatched up most of South Dakota for myself when Sitting Bull was taking a potty break …

… But I wasn’t even alive when all that was going on – and that pretty much limited my opportunities to join the party.

Nevertheless, like Cain and Able – who got their prenatal butts unceremoniously tossed out of the Garden of Eden through no fault of their own – us SWMs are now making restitution for the sins of our fathers.

Flick on the boob tube after 7:00 PM, and you’ll be treated to hours of TV shows and commercials portraying us SWMs as blithering idiots, insensitive philistines and beer-swilling buffoons.

Black and Latin guys? They’re cool – or is it “fly?”.

Asian guys? They’re smart.

Women? Capable, sexy, sensitive.

Gay guys? Quirky, gifted, fun.

Lesbians? Hot!

Straight white guys like Homer Simpson, The King of Queens and me? Clueless, oafish, vulgar – or worse: Venal, greedy, conspiratorial, and mindlessly violent.

I swear: It’s getting to the point where just reading the TV Guide listings makes me feel like the caveman in those Geico commercials!

That’s OK though … I’m a big boy and I can take it. You won’t hear any whining from me. Sticks and stones and all that stuff.

It’s that other oppressed minority I’m really starting to worry about –a minority that YOU belong to — or will soon …

The Evil Rich

Like you, I’ve always tried to make wise choices, to work hard and to manage my money wisely.

So for the last three decades plus, I’ve put in back-breaking hours … suffered through the lean times … scrimped, sacrificed and saved in the good times … and reinvested my profits to hire folks and expand my business.

And lo and behold, it all began to pay off for me back in the early 1980s.

That’s when I committed the ultimate sin: I became officially “rich.”

Now, when I say I got “rich,” I do not mean Jay Rockefeller rich (net worth $200 million). Or Diane Feinstein rich ($50 million). Or even Nancy Pelosi rich ($13 million).

But about 25 years ago, I crossed the $350,000-per-year income threshold – just enough for the millionaires in Congress to declare me “rich” with a straight face.

Now, as we all know, when Congress wants to discourage a particular behavior, it passes a law that imposes fines on the evil-doers.
The fine for working hard is called the “income tax.”

And, like a couple of Satanic parents, the House and Senate use income taxes to punish us when we’re good and reward us when we’re naughty.

Make dumb choices, squander your opportunities and wind up poor – and not only won’t they fine you, they’ll give you all kinds of free stuff.

Make wise choices, work diligently and become successful – you’d better watch out: Congress is going to fine the bejezus out of you.

When your income passes the $350,000 mark, you graduate into the highest income tax bracket – which entitles you to pay Washington thirty-five cents out of ever dollar you make.

That means in an average 260-day working year, you’ll work 91 days for free – giving the government 100% of the money you earn.

Or, put another way, if you come to work every day at 9:00, everything you earn before 11:48 AM goes to Washington to squander any way it sees fit.

Now, if you’re thinking, “No problem; I’ll just skip that part of the day – show up for work at 11:48 and then keep everything I earn.”

Nice try, no cigar. I already ran that one by my CPA. He just rolled his eyes.

OK … so now, you’re probably thinking: “Jeeze, Clayton, you make a LOT of money every year – quit bitching about a lousy 35% income tax, will ya?”

I’m sorry – didn’t I mention this isn’t about me? It’s about you and your quest to become rich.

See, despite what Washington and the media tell you, high taxes never hurt the truly rich.

Bill Gates, Warren Buffet, George Sorros and all the millionaires in Congress already have their money. Ditto for corporate CEOs, with their hundred-million-dollar bonuses … Hollywood celebs with their $20 million-a-picture deals … or trust-fund babies with their bazillion-dollar inheritances.

Not only are these folks already set for life, they can afford armies of high-priced tax accountants to shrink their tax bills down near-zero.

On the other hand, high taxes do hurt folks who can’t get a job because their prospective employers just sent their salary to Washington.

But most of all …

High taxes hurt people like you:
Folks working to become rich.

Making good money each year is one thing. Building long-term wealth and saving for retirement while putting kids through college … caring for elderly parents … and flushing more than a third of your income down the Congressional crapper is quite another.

Especially since that 35% federal income tax bite is just the beginning. If you’re self-employed, Uncle Sam wants another 15% to cover your Social Security and Medicare premiums – and depending where you live, you could also get slammed for as much as 9.5% in state income taxes.

That’s 59.5% of your income confiscated before you ever see it – enough to shrink the $350,000 income that just made you “rich” down to $141,750.

Sure – you’ll have deductions at tax time and they’ll help plump up your refund. But the government isn’t through with you yet – not by a long shot.

You’re going to have to spend a bunch of what you still have on “extravagant” things like food, shelter, clothing, transportation – and of course, energy.

And guess what? You’ll have to pay state sales taxes of 5%, 6%, 7% or more on most of those things.

Then, there are the annual taxes on stuff you already own – like your cars and your house: Depending on where you live, that’s good for another multi-thousand-dollar yearly expense.

Plus, everything you buy has huge taxes tucked away in the price you pay for them.

Take that new car for example:

  • Every company involved in supplying the iron to make the steel … the oil to make the plastics and all the other raw materials…
  • Every company that used those raw materials to produce finished parts…
  • Every company that transported those finished parts to the factory for assembly and the factory itself…
  • The company that transported the finished car to the dealership and the dealership itself…

… Every one of those companies is paying taxes out the wazzoo: Property taxes … matching FICA contributions … sales taxes on everything they buy … taxes on their profits …

… And each of those taxes is cheerfully passed on to you — included in the price you paid for that car.

So how much does all that cost you every year? I don’t think anyone knows for sure – but a few years ago, the National Taxpayer’s Union estimated that the average new car would cost 66% less if all those taxes could be removed from the sticker.

So let’s recap: Up to 60% of the money you earn is confiscated before you see it – for federal and state income taxes and FICA payments …

… And when you spend the rest, up to 66% of that money winds up in a politician’s hands, too.

Do the math and you’ll see: Government is already costing you somewhere around 75% of what we earn each year.

That $350,000 would spend like $1.4 million if there were no taxes.

Thanks to taxes, it spends more like $87,500.

And don’t even think about getting me started on how the massive budget deficits Washington’s running slash the spending power of that eighty-seven grand by 30% to 50% every decade or so!

Now – you ready for the kicker?


As we all now, Congress is threatening to levy even larger fines on you for earning more than $350,000 per year – which (finally!) brings me to the points I set out to make in the first place …

Point #1:
Profits Live at the Intersection
of Need and Emotion

Despite the fact that April 15th is bearing down on us like a run-away train, only a minority of Americans have any idea of the enormity of the shellacking they’re about to receive.

In one of the slickest, sleaziest marketing ploys of all time, the government has convinced them that April 15 is a good thing. After all — it means they’re about to get their tax refunds!

You know: The money the government’s been forcibly borrowing from them all year long without paying interest on it?

But most of the rest — tens of millions of business owners … entrepreneurs … investors … and the senior citizens who make up the majority of our prospects for health products … are aware of what’s going on … and most of them are royally pissed off.

THINK: How can you tie your product to your prospect’s indignation … frustration … and his desire to win even a small victory over Washington pick-pockets?

I’m often amazed at how few of my clients think about this when planning promotions to their customers.

See, when I design customer file strategies for a client, I try to avoid “one-size-fits-all” promotions like the plague.

Instead, I focus on two far more effective types of promotions:

1. Horizontal promotions: Highly personal promotions that go to customers who have something in common: A birthday, an anniversary, a product preference, for example.

Choose any demographic or psychographic you wish – sex, age, buying frequency or recency, average purchase, largest purchase, cumulative purchase – whatever.

Then, craft a promotion and a special offer just for the folks who match that criteria. Let them know why they’ve been selected for this honor.

Then, sit back and watch your response go through the roof.

2. Vertical promotions: These are the direct mail and e-mail promotions I send to the entire file – but they’re not promotions you could have sent them anytime.

Each of these vertical promotions is sent to the entire file to commemorate something we’re all experiencing together.

It could, for example be designed to help them deal with a situation that’s currently in the news.

Or, it could be keyed to a specific date – like the New Year … Valentine’s Day … Halloween … Thanksgiving … Christmas … George Birthington’s Washday …

… OR, the two most crucial times in a taxpayer’s financial life: December 31 and April 15.

Craft special promotions that connect with your prospects’ dominant emotions at these times, and I guarantee it: Your response will soar.

Point #2:
Never Forget How Powerful
Envy Can Be

Millions of Americans dream about success. They fantasize about life as a successful entrepreneur … a rich celebrity … or even a lucky lottery winner.

And yet many of those same people just voted for politicians who freely admit they intend to raise taxes on successful people.

I wonder how many of those voters really connected the dots. How many realized that when their dreams of success come true, the vote they just cast will cost them tens of thousands of dollars every year – maybe even hundreds of thousands – for the rest of their natural lives?

Why would a sane person daydream of getting rich one minute and then vote for folks who promise to tax him to death when he becomes rich the next?

Simple: Envy is a powerful emotion. And emotion trumps reason every time.

THINK: How can you harness your prospect’s envy of folks who are richer, healthier, younger, luckier, better looking to get his attention and readership and to make a sale?

That’s the idea behind the entire mutual fund industry – it goes something like this:

“Until now, only the super-rich could afford to own every stock traded on the Dow Jones Industrial average. Only the rich could enjoy the enhanced profit potential and safety that kind of diversification can give you.

“That’s just not fair, and it’s just not right. That’s why we created the XYZ mutual fund – to give you the same “unfair” advantage that the super-rich think is their birthright.”

Powerful stuff!

Point #3:
Getting TRULY Rich Is Your Only Defense

“Reach for the stars,” the wise man said; “You may not catch one, but you won’t wind up with a fistful of mud, either.”

Learn to think big. The bigger, the better. Whatever your financial goals are now, double them. And then double them again.

After all – since they’re swiping up to 75% of your money, it follows you’ll need four times more to live the life you deserve.

So work smart. Work hard. Most of all, never give up.

As the Romans were (supposedly) fond of saying, “Illegitimi non-carborundum” – don’t let the bastards grind you down.

Yours for Bigger Winners, More Often,
Clayton Makepeace Signature
Clayton Makepeace
Publisher & Editor

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26 Responses to All About Money

  1. james abugah says:

    Yes Clayton,

    I like the point about envy.

    The world seems to direct envy to the wrong direction.

    When you are rich people are envious, they will sue you, steal your property, destroy it or just confiscate it.

    I wish they would bother to find out how to legitimately get wealthy.

    By the way, have you ever wondered why taxes are not applied on a flat rate? Why tax the rich at a higher bracket?

    Any why have mercy on the poor anyway? Is this not a form of discrimination?

  2. As always! Awesome post!

    All your articles should be bundled up and made a REQUIRED class in all k-12 schools. Just the political ramblings alone would edumacate the kids far better than anything I learned in school.

    Love it,

  3. Christopher says:

    Totally agree Clayton
    but don’t me started!

  4. James Gunn says:

    Hi Clayton,

    Well said – I’m pleased to hear that not all Americans are going the way of Europeans. 35% tax – we used to dream about 35% tax


  5. Barbara says:

    Dear Clayton,

    As a New Yorker I enjoyed reading about your trip to the sin city with wife and kids. Yes, New York is a fascinating place, even for us who reside here.

    I hope next time you visit New York to be offered the opportunity to meet you in person. Many times I copy parts of your newsletter and e-mail to my sons. Today I copied the ending and sent it to my husband.

    Your newsletters are wise, packed with insights and extremely entertaining – cannot stop reading them – What a gift you were born with and of course developed over the years!!!

    Keep them coming! thank you1

    Varvara M. Gokea

  6. Mike says:

    How do you respond to that – I know “don’t let the bastards grind you down” –
    You’re exactly right two thirds of our “future” income is way to much, our government expects the rich to carry the poor, but not expect the poor to earn it, it’s almost like, what’s the point. But my internal motivator won’t allow me to do it any other way.

    I’m with you lets aim for the stars…ml

  7. Jeff K says:

    While I agree, in principle, with most everything your rant, it’s still just a rant. You didn’t actually suggest even the vaguest of solutions. Not paying any taxes isn’t a solution as our taxes pay for things like roads, police protection, food safety and the like. (Granted, they also pay for things some of us may not like so much such as war and Congressional pay raises.) I don’t have a solution either but then again, I’m not out railing about the injustice of it all.

  8. Burt Unruh says:

    Taxes are the price we pay to live in this country. The more you make the more services you use. You say that $350K would spend like $1.4M without taxes. But you’d have to hire private security, and who would test your food and drugs to make sure they weren’t poisoned or make sure your doctor was qualified. Not to mention little things like will the gas you buy ruin your Porsche. Anarchy is very expensive.

    Since Reagan became President the top 5% have done very well for themselves, going from $8 trilliion in net worth to $40 trillion in net worth. It is this transfer of wealth through the tax and ecomomic system that is the cause for the terrible economy.

    As for the idea that we can all be rich by working hard, it’s a lie we like to tell ourselves. If everybody went to Harvard and got a PHD we would still need trash collectors, sewer cleaners, and the other people to do the jobs we can’t or don’t want to do.

    As for being poor and getting government handouts, I haven’t seen any. I was a self-employed craftaman for 38 years. After my heartattack I can’t return to my old job. And I don’t qualify for unemployment. And with the lousy economy I can’t find work that I am qualified for.

    Everybody has problems. I’ll be more than happy to trade the high taxes you don’t like paying for not having a job and worring about how to keep my house.

    But in reality none of us, myself included, don’t have it as bad as we think we do. We could be homeless and starving.

    Keep writing, I do enjoy most of most of what apprears on your site. I just feel that other points of view should be considered too.

    Burt Unruh

  9. Ryan says:

    Damn straight! I’ve been at the crossover point you’re talking about for the last couple of years and it’s painful as hell. I’m paying income taxes every quarter and it’s awful. About this time of year I start getting nauseated thinking about how much I have to save up to pay the April shellacking. You’re absolutely correct that the only solution is to make more – a lot more – and try to get ahead of leaching process. I get so mad when I see that the smart, hard working, risk takers in our country are required to carry the stupid, lazy, scared masses on their backs.

  10. John says:

    Clayton, when it come to this Unreconstructed Rebel, you’re preaching to the choir.

    Burt, who said a Harvard Ph.D. was wworth anything? Read “The Millionaire Next Door” and find out how regular Americans live well as plumbers, electricians, or even janitorial services business owners.


  11. thomas says:

    My very rich Uncle use to love paying income taxes. The more the merrier because that meant you were making bank…

    Different perspective.

  12. Ryan Berg says:

    Personally, I agree with Thomas and Burt. Complaining about it is the wrong attitude to have. For one thing, I could live pretty well on 140k a year. I’ve lived pretty comfortably on 12k. Have a little gratitude for how good life is in America.

    Second, I think the idea that rich people are working harder is just an excuse to justify this kind of complaining. Not saying they don’t work hard… but there are a lot more people earning “average” incomes busting their asses, too. They just aren’t in careers where they can leverage their energy the way business owners can.

    Does the government spend money on really stupid things? I think we can all agree the answer is yes. Do they provide a lot of useful services. Again, also yes. Should taxes be lower? Sure. But having this negative attitude about money that the more I make the more I get ripped off isn’t going to help me get more of it.

    Good lesson on how most people feel about these issues though =) That’s always good to know as a marketer and copywriter.

  13. Jake says:

    It’s “ABEL”…

  14. Nate Hagerty says:

    I’m totally going to create my next promotion around George Birthington’s Washday! (per point #1).

    Wait–when is that, exactly? [calendar in-hand here]

    ;) I kid, because I love.

  15. Jack Settles says:

    Bang up job Clayton. I’ll bet you had fun writing that. I had quite a few laughs and enjoyed the whole thing. There are the nay-sayers out there but you are right. There was a time that the IRS took 90% of the rich mans money. I saw a letter from one such that offered the govt. another million if they needed it. I think we need to tax congressmen…and women about 50% and raise it to equal the raises they give themselves. That gives me a chuckle every time I think of it.
    New Rule “any congressperson who wants to introduce a new tax bill should have to put up a million dollars to go in the kitty to start with. It’s just a small fee to cover the cost of the paper it’s printed on. It would have to be non refundable. Ideas are flowing…lol. To the one that mentioned the flat tax, That would graduate the amount up to include everyone and be the most fair way to handle the whole thing. That could eliminate the IRS all togeather. The computers could handle the work….As I say. The ideas are flowing and the fun is just beginning. Thanks again for your idea. I aspire to join you and to exceed. Jack Settles

  16. Bruno says:

    Our founding fathers had a fit… because of a tea tax.

    Today we are getting the “Shaft” and some here say “oh it ain’t so bad, just sit back and enjoy it”

    I’ll stick with the founding fathers fit!

  17. Gene says:

    Clayton for President in 2012!!

    I’d actually vote then.

    No, seriously, run for President.

  18. The idea that the poor are poor because they’ve “bad choices” is an often repeated conservative myth.

    So the guy who works and saves his whole life and then has his job outsourced has made a bad choice?

    When the wealth of the country is transferred via huge bailouts and corporate welfare to investment firms and banks who are committing massive, government-backed financial fraud,and the middle class people get destroyed when the bubble pops because they have made ‘poor choices”?

    You’re kidding, right?

    I’m no liberal by a long pull but I also detest unthinking Republican mythology.

    Yeah, the middle class that is being systematically destroyed deserves it and brought it on themselves by their poor choices.


  19. Bill says:

    Well said. But, you might also add to those taxes, that Mr. Bernanke at the Fed (who is unelected) just “stimulated” our economy again to the tune of another $600 billion on top of the $2.5 trillion they used to bail out banks and GM (gov’t motors), even after it was pretty clear Americans don’t agree. That’s not a tax, but it sure as heck devalues our money. It amazes me that anyone can defend or rationalize the level of taxes, spending, and regulation we have in America… except that every time I ask one of those people that do, I usually find out they are on the receiving end of one form of government spending program or another. I even see them in your replies to your blog post. Between the government employees at all levels, all the unions, all the lawyers, cpa’s, and even private businesses that want more spending (because they do contract work for those roads and bridges) or want more regulations (like some of our illustrious big corporate round-table types, who don’t like competition)… the small businessman or woman today is out numbered. My big concern is not getting rich, it’s the debt and the freedoms we are losing for our kids and their kids. How can people justify or rationalize that? I think the next march on Washington (or Albany, in my case) should be at midnight with torches and pitchforks. At least last Tuesday’s election shows me that there’s a substantial number of people coming to the same realization. Thansk for letting me rant, and for sharing your post, too – it needs to be said more, not less. Those people who tell you to “shut up and be grateful” should be ashamed. What will they tell their children and grandchildren?

  20. Ed says:

    Post 2 asked,

    By the way, have you ever wondered why taxes are not applied on a flat rate? Why tax the rich at a higher bracket?

    The answer is in the Communist Manifesto. It is plank 2. “A heavy progressive or graduated income tax.”

    Welcome to Amerika comrades.

  21. Is this a great country – or what! We’ve got a used ta be community organizer acting as president and a successful copywriter giving forth with an op page on the ills of our country’s tax structure.
    No where else in the world would this be taking place. I love it.! Your newsletter today is great Clayton. You and your cronies are welcome in my home – anytime. I cannot say the same for that ex community organizer. sheesh! Maybe he’ll stay in India…

  22. Neil says:

    Clayton’s whinging about taxes but it doesn’t hurt to point out how unfair this system is – especially when the real message is ‘reach for the stars’.

    P.S. Move to a palace in a tax haven and visit the folks at Christmas (or install them in the west wing…).

  23. Clayton,

    It never fails. Every time I read your material I open something I’m working on and improve it.

    I still want you to run for President.

    Steve Newdell

  24. Angela says:

    Hello Clayton,

    I loved this article because it shoots from the hip and tells it like it is.
    Thank you.

    But there’s a whole lotta moola the big guys are raking in from the average Joe that you didn’t mention on top of that’s 75% being removed from our pockets.

    I was personally informed I was selected to submit a forceable donation in excess of $38,000 – and that on my after tax dollars as a SWF caring for a senior parent!

    And although I eventually won and it was over a year ago, I’m still fuming … so I know in my gut you’re right on the money about readership response. Thank you for sharing your insight.

  25. Angela says:

    Hi Clayton,

    I see you’ve been berated for not offering a solution.

    I know this sounds corny but how’s this for a Solution?

    Fiscal Responsibility and ACCOUNTABILITY!!!

    I know it’s a strange concept and I could go further and suggest extreme personal penalties for over-spending agencies, but I think just the concept alone might be a tough one for certain offenders.

    Now while some of you might get all offended this is not something new. Most entrepreneurs and businesses are aware of the concept of a penalty if a contract is not completed in a timely or up-to-snuff manner. It is usually experienced as a loss of a portion (or all) of the offenders personal income for that job.

    Think that might garner some respect and responsibility for the tax paying citizen?


    PS – All of us need to act reasonably, sensibly with accountability and with respect for the work that each of us does. At the end of the day if there is no joy to be had from our endeavors or for our children – what’s the point?

    I would have loved to have children – a family to enjoy. But out of control spending for a bleak tomorrow is not something I will bring any children into this world for. It’s not their responsibility and it shouldn’t be their fight – it’s ours.

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