As I've stated, the rich already knew about corporations, which became popular in the days of sailing ships. The rich created the corpora- tion as a vehicle to limit their risk to the aslsetsof each voy- agTThericH put their money into a corporation to finance the voyage. The corporation would therjjiirea crew to sail to the New World to look for treasures. If the ship was lost, tlie~crew lost their lives, but the loss to the rich would be limited only to the money they invested for that particular voyage. The diagram that follows shows how the corporate structure sits outside your personal income statement and balance sheet. The History of Taxes and the Power of Corporations 125 It is the knowledge of the power of the legal structure of the corporation that really gives the rich a vast advan- tage over the poor and the middle class. Having two fa- thers teaching me, one a socialist and the other a capitalist, I quickly began to realize that the philosophy of the capi- talist made more financial sense to me. It seemed to me that the socialists ultimately penalized themselves, due to their lack of financial education. No matter what the "Take from the rich" crowd came up with, the rich always found a way to outsmart them. That is how taxes were eventually levied on the middle class. The rich outsmarted the intel- lectuals, solely because they understood the power of money, a subject not taught in schools. How did the rich outsmart the intellectuals? Once the "Take from the rich" tax was passed, cash started flowing into government coffers. Initially, people were happy. Money was handed out to government workers and the rich. It went to government workers in the form of jobs and pensions. It went to the rich via their factories receiv- ing government contracts. The government became a large pool of money, but the problem was the fiscal manage- ment of that money. There really is no recirculation. In other words, the government policy, if you were a gov- ernment bureaucrat, was to avoid having excess money. If you failed to spend your allotted funding, you risked los- ing it in the next budget. You would certainly not be rec- ognized for being efficient. Business people, on the other hand, are rewarded for having excess money and are rec- ognized for their efficiency. As this cycle of growing government spending contin- ued, the demand for money increased and the "Tax the rich" idea was now being adjusted to include lower-in- come levels, down to the very people who voted it in, the poor and the middle class. True capitalists used their financial knowledge to simply find a way to escape. They headed back to the protection of a corporation. A corporation protects the rich. But what many people who have never formed a corporation do not know is that a corporation is not really a thing. A corpora- tion is merely a file folder with some legal documents in it, sitting in some attorney's office registered with a state gov- ernment agency.