Risk vs Taxes

[Account Closed]

This is a question for real estate investors that use at least some of their own money and believe taxes will go up in the future. Please don’t let this turn into a political debate.

Are you more, less or just as likely to pull the trigger on a thin margined flip, a long term hold or as a private lender a high LTV loan to a marginal borrower if you believe taxes will go up in the near and long term? By taxes I mean any new law or regulation that causes you to pay more money in taxes, fees, etc.

If you feel like you need to take more and more risk to maintain the same income, at what level of taxes do you finally say enough is enough, my up-side-only investment partner (uncle sam) is getting too much of the profits and I’m taking all the risk, I quit. In France for example, now that the marginal tax rates are at 75%, entrepreneurs are rethinking if they want to risk capital at all. What’s your number?

Remember, this assumes you are putting your own money at risk, not somebody else's money.

Personally, I find myself thinking I want less and less risk as taxes go up, even if it means smaller returns.

What do you think?