Guests - Mark Quann, Betsy Smith, Charles Johnson
Financial Expert Mark Quann Shares Tax Avoidance Strategy Used by the Wealthy
Mark Quann, financial expert and author of the number one tax book, "Be Smart, Pay Zero Taxes," joined Winn Tucson to discuss how ordinary Americans can legally avoid taxes using the "Buy, Borrow, Die" strategy employed by wealthy individuals like Elon Musk and Jeff Bezos.
Quann, who spent 15 years as a financial advisor training teams of advisors, explained that this strategy has been used for decades by wealthy families but is accessible to anyone. "I show people how to do it starting with $100 and a brokerage account," Quann stated.
The financial educator discovered this strategy during the COVID-19 pandemic when his speaking engagements were canceled. He used the opportunity to start a financial education company called The Perfect Portfolio, where he began teaching the Buy, Borrow, Die strategy to ordinary Americans. "I've taught it to about 500 ordinary Americans right now," he said.
When asked about the biggest mistake people make with their resources, Quann pointed to overreliance on CPAs and financial advisors. "The problem is that I was the financial advisor for CPAs. Most of the CPAs and financial advisors don't really know how to avoid taxes completely and they don't know how to retire sometimes," Quann explained. "It's not your CPA's job to help you legally avoid taxes. And it's not your financial advisor's job to make you financially independent."
Quann described the Buy, Borrow, Die strategy as a method to circumvent the U.S. tax system legally. He invests in five assets: stocks, life insurance, real estate, cryptocurrency, and gold/precious metals. The strategy involves borrowing against these assets rather than selling them, which allows wealth building without triggering taxes.
"I can invest in one asset and I can borrow from one asset to fund another asset. As those grow, I could borrow from those two assets to fund another asset," Quann explained. "I'm completely circumventing the US tax system because I didn't sell. When I borrowed, I didn't pay taxes on the money and I'm building my wealth."
The strategy's final component comes at death, with a step-up basis allowing up to $26 million to be passed to family tax-free.
Quann praised mortgages as an excellent financial tool, sharing that he recently purchased a $400,000 house in Knoxville, Tennessee with almost nothing down. "A mortgage is essentially $400,000 that I didn't have to pay taxes on. I just signed a mortgage document," he said. Quann explained that real estate is "the most powerful asset for wiping out taxes" and can be used strategically to eliminate taxes on W2, 1099, and dividend income.
On retirement accounts, Quann described 401(k)s and IRAs as "an absolute tax nightmare" because they trigger taxes on Social Security and create required minimum distributions that force additional tax payments. "It's not just gains, it's income taxes. It's the highest form of all taxation ever been created," he warned.
Quann mentioned that his strategy works particularly well for charitable giving. "Imagine you had a brokerage account and you wanted to donate 100,000 a year to your church. Donate your money. Take a margin loan. Take that to your church. It's a double tax deduction," he explained. The money remains in the brokerage account, growing tax-free, while the government would owe $30,000-$40,000 in tax benefits depending on the tax bracket.
Currently, Quann is borrowing at 5.25% interest on his margin loans. He uses these loans to fund investments in cryptocurrencies or real estate purchases without paying taxes on the borrowed funds.
Quann's mission is to help one million ordinary Americans become millionaires using his five pillars of investing: stocks, real estate, life insurance, cryptocurrency, and precious metals. His book outlines how anyone can build $6 million in wealth, retire early, and live tax-free without relying on traditional retirement accounts.
Betsy Brantner Smith Discusses Recent Attacks on GOP Offices and Law Enforcement Updates
Betsy Brantner Smith, spokesperson for the National Police Association, discussed the recent arson attack on a GOP office in Albuquerque, New Mexico, and other concerning incidents around the country.
Smith described how the Albuquerque GOP office was attacked early Sunday morning in what authorities believe was arson. "The words ICE, ICE equals KKK were also spray-painted on the building," Smith said. She encouraged listeners to search online for photos of the attack, calling the images "absolutely chilling."
This attack is part of a pattern targeting GOP headquarters and Tesla dealerships across the country. Smith noted arrests have begun, including a Colorado man arrested in Plano, Texas for damaging a Tesla dealership, and another man arrested in Las Vegas for firebombing a Tesla dealership.
Smith connected these incidents to a network of activist groups. "These are the same people. This is Occupy Wall Street. This is Black Lives Matter. This is the pro-Palestinian anti-Semites," Smith claimed. She suggested that NGOs like George Soros' Open Society hire people to commit acts of violence and inspire others with mental health issues to follow suit.
Smith also mentioned that some protesters at a Tesla dealership in Tucson admitted to being paid to hold signs. Many demonstrators use professionally made signs and don't fully understand what they're protesting beyond general opposition to Elon Musk, Tesla, and the GOP.
On law enforcement matters, Smith shared that 18 police officers have died in the line of duty since January, with 10 killed by gunfire. She also discussed a case where a Boston judge is attempting to hold an ICE agent in contempt of court for arresting a man who was facing felony charges related to false driver's license paperwork.
Smith praised Attorney General Pam Bondi's decision to seek the death penalty for Luigi Mangione, who is charged with murdering Brian Thompson, CEO of United Healthcare. Mangione faces both state charges of murder and terrorism in New York and federal charges including murder through use of a firearm.
"Mangione's murder of Brian Thompson, an innocent man and father of two young children, was premeditated, a cold-blooded assassination that shocked America," Smith quoted Bondi as saying.
Smith criticized the contrast between the federal prosecution of Mangione and the naming of a ballot measure after him in California, which would make it illegal for insurance companies to delay, deny, or modify medical procedures. She noted the words "delay" and "deny" were written on bullet casings found next to Thompson's body.
Smith expressed concern that Mangione has become a "cult figure," receiving love letters and marriage proposals, which could inspire other violent acts. "This is so inappropriate," Smith said. "Can we all get together and say violence is bad, murder is bad, gun crime is bad, setting fire to Teslas is bad?"
Charles Johnson Explains Cochise County Jail Tax Settlement and Legal Challenges
Attorney Charles Johnson joined Winn Tucson to discuss the settlement reached in the Cochise County jail district tax case, where he represented four plaintiffs challenging the legality of a mail-in ballot for a jail tax.
Johnson explained that while a settlement has been reached, it faces opposition from the Arizona Attorney General's office, which filed a motion to intervene on behalf of the Secretary of State. "The Arizona Attorney General's office on behalf of the Secretary of State of Arizona has filed a motion to intervene in our case with the clear intent to upset the settlement and maintain the current sales tax in Cochise County," Johnson said.
The tax was enacted through an election on May 16, 2023. Johnson's clients contested the election on several grounds, including the disenfranchisement of over 10,000 "inactive voters" who didn't receive ballots. The Court of Appeals found merit in this argument and remanded the case to the Superior Court.
Johnson explained that the statute requires mail-in ballots to be sent to all registered voters, regardless of whether they've been labeled inactive. Many of these voters had participated in the previous November election but were not sent mail-in ballots for the May special election.
The tax passed by only 132 votes, with a 51% majority. Johnson had argued that a 60% supermajority should have been required to enact a tax in Arizona, but both the Superior Court and Court of Appeals disagreed, ruling that since the measure wasn't an initiative or referendum, it didn't need to meet that threshold.
Since the election, a new Board of Supervisors was elected in Cochise County, including Frank Antonore, Kathleen Gomez, and returning member Tom Crosby. This new board agreed with Johnson's clients that the tax was unfairly enacted and that a new election should be held. They negotiated a settlement that would suspend the tax and schedule a new election.
However, the Attorney General's office and Secretary of State oppose this resolution, claiming it could affect statewide elections. "They somehow believe that this resolution of the strictly Cochise County sales tax matter will affect statewide elections," Johnson said.
Johnson noted that the jail tax has already collected over $8 million in its first year, but only $40,000 has been spent on designing the jail. The 25-year tax is projected to raise over $300 million, far exceeding the estimated $70-90 million needed for the jail construction.
Johnson suggested there was a "bait and switch" involved, where voters were told the tax was for a new jail, but the ballot language created a "jail system" that could potentially include other facilities like a new courthouse. "Through that word legerdemain is how we got from a new jail to an entire jail system," Johnson explained.
The case is now before Apache County Superior Court Judge Latham, as the entire Cochise County Superior Court has recused itself. Judge Latham will first decide whether to allow the Attorney General and Secretary of State to intervene before determining how to proceed with the settlement.
Johnson credited plaintiff Dan LaChance and Shelby Bush of the We The People Alliance of Arizona for their work on the case, particularly in identifying the disenfranchisement issue that ultimately succeeded at the Court of Appeals.
If the settlement is approved, the new election would allow both mail-in ballots and in-person voting throughout Cochise County, potentially in the upcoming November general election. Johnson emphasized that despite the legal challenges, a new jail may indeed be needed, but questioned the methods used to fund it and the lack of transparency about how the money would be spent.