Why Mark Cuban Believes There Are 'No Good Taxes'

Are taxes really evil? Or a necessity?

Last week, lawmakers agreed to 1% excise tax on companies that initiate share buybacks (meaning, when a company purchases its own shares of stock after issuing them). Cuban isn't a fan of share buybacks. But he's also very much not a fan of taxing them.

In fact, in a recent Twitter post, Cuban insisted that "there are no good taxes." But he also said "taxing buybacks rockets to the top of the list."

Now, Cuban may not be thrilled with this new policy. But is he right about taxes on a whole?

What your tax dollars do

In a nutshell, your federal tax dollars allow the country to operate. There are different granular ways we can break that down, but all told, the taxes you pay on your income fund everything from roads to healthcare services to general infrastructure. And the state and local taxes you pay help fund things like local schools, parks, and other amenities.

And so while your preference may be to keep all of the money you earn, as opposed to sharing it with the government, if taxes didn't exist, you'd potentially have to pay for a lot of the free services you enjoy right now. Imagine having to pay a fee to send your child to school, or to visit a public playground. Without taxes, that might be your reality.

How to lower your tax burden

It's easy to argue that there are, in fact, "good taxes," or at least necessary ones. But you should still take advantage of all the options that allow you to pay the IRS as little money as possible, and there are several ways to go about that.

First, max out tax-advantaged savings plans like IRAs, 401(k)s, and HSAs. All of these plans come with annual contribution limits and restrictions. But if you pump money into them, you can shield some of your earnings from the IRS (in a completely legal fashion).

Next, be sure to claim the right credits and deductions when you file your tax return. You may want to consult a professional tax preparer who can help you maximize those tax breaks. If you're a homeowner, for example, you can deduct the interest you pay on your mortgage, provided you itemize. You may also be able to deduct some or all of your property taxes on your home.

You should also know that the more charitable you are, the more of a tax write-off you might snag. If you itemize on your tax return, you can claim a deduction for both cash contributions to registered charities as well as donated goods.

Finally, be strategic when selling investments in a brokerage account. Those sold at a profit will be taxed less harshly if you hold them for at least a year and a day before unloading them.

Whether you agree with Mark Cuban about taxes or not, the reality is that they're unavoidable -- to some degree. But that doesn't mean you can't do your best to implement strategies that greatly lessen that burden.