Editor’s Note: The recent news about what Donald Trump pays—or doesn’t pay—in taxes has generated a lot of buzz. Today, we turn to longtime PBRG friend Alex Green for his take on the issue…

From by Alexander Green, Chief Investment Strategist, The Oxford Club: The recent uproar about Donald Trump’s taxes says a lot about the confused times we live in.

If you’re an investor who measures his success by the only financial metric that really matters—total net return after taxes—pay attention.

Because taxes—especially over the long haul—are a very big deal.

According to the Vanguard Group, the average investor gives up 2% of his portfolio to Uncle Sam each year. (That’s 20% of the stock market’s average annual return and more than 100% of current Treasury yields.)

By surrendering thousands of discretionary dollars to the IRS—and perhaps tens of thousands over a lifetime—you make it much harder to meet your long-term financial goals.

That’s why I often write about the supreme importance of tax-managing your portfolio.

But back to Mr. Trump…

None of us knows how much he paid in taxes. But someone leaked his negative-$916 million in federal adjusted gross income for 1995 to The New York Times, and now the press—and some lazy thinkers—are in a tizzy.

Trump, they fume, could have carried that loss forward to avoid paying taxes for up to 18 years.

We don’t know whether he actually did, but he doesn’t deny it. In fact, he said that would prove he’s “smart.”

And, in this instance at least, it’s hard to disagree.

For starters, the write-off wasn’t just legal. It was entirely appropriate.

As Judge Learned Hand, Chief Judge of the U.S. Court of Appeals for the Second Circuit, famously wrote:

Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the Treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again, the courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.

You likely deduct your mortgage interest, property taxes and charitable contributions on your tax returns. You offset your realized gains with realized losses.

There are entire industries devoted to helping individuals and businesses minimize federal income taxes. We all know plenty of accountants and other tax advisors. Americans buy tens of millions of dollars’ worth of tax preparation software each year. And H&R Block has annual sales of more than $3 billion—and a market cap of more than $5 billion.

Avoiding taxes is big business. Everybody is doing it.

But some folks believe what is right for the rest of us is not right for the rich guy. They’re upset about Trump’s deduction.

But they’re angry with the wrong people.

We have 100 senators, 435 congressmen and one president. If you’re unhappy with the federal tax code, look to those 536 individuals.

If they didn’t want or like the tax code—if they thought it was unfair or too complicated—they could change it tomorrow.

If we had a flat tax, for instance, we could exempt low-income earners and have everyone else pay their share at the same low rate. Or if we had a national sales tax, we could do away with the IRS altogether and even collect taxes from tourists, drug dealers and illegal immigrants.

Either system would make the tax collection process more transparent and raise the revenue we need for vital government services.

But you’ll notice that politicians don’t simplify the tax code. And for one very simple reason: They don’t want to.

Virtually every line of our 74,608-page tax code contains a carve-out, loophole or exemption for some special interest.

They put them in there because they want those votes. And they get them (and plenty more) by protesting the unfairness of it all and doing nothing about it.

This is a winning strategy. History shows that 90% of House members and 91% of senators are generally reelected. So are most presidents. (Bush 41 was the only president to fail to win reelection since 1980.)

Republicans and Democrats earnestly insist that they want to simplify the tax code, eliminate the budget deficit, lift suffocating regulations, and fix all the other problems they’ve created… and if you will only vote for them they will really do it this time.

Or as Lucy famously said, “I’ll hold the football for you this time, Charlie Brown. I promise!”

There are plenty of reasons not to vote for Donald Trump. (And just as many not to vote for Hillary.) But his ho-hum use of losses to offset future gains—as the tax law clearly allows—is not one of them.

Our elected representatives can make the tax code simpler, fairer and more transparent whenever they want.

Until then, use every legal maneuver you can to minimize your income tax liabilities.

Just like Trump.

Reeves’ Note: We’re all looking for ways to reduce the taxman’s bite. To that end, you need to be aware of a law passed by President Obama that helps millions of people save at tax time. It’s expected to return an estimated $42.4 billion to American taxpayers. Alex and our friends over at The Oxford Club have put together a special report about it. Click here to learn more…