'It's An American Duty To Not Pay Our Taxes' — Robert Kiyosaki Proudly Says He's $1.2 Billion In Debt Because It Legally Leaves Him Tax-Free

You've heard it a million times—debt is bad, get out of debt, Americans are drowning in debt. The headlines paint it as the ultimate financial nightmare. But not everyone sees it that way. Best-selling "Rich Dad Poor Dad" author Robert Kiyosaki proudly boasts about being $1.2 billion in debt—and according to him, that's exactly how he legally avoids paying taxes.

How Kiyosaki Uses Debt to His Advantage

In a January 2024 Instagram video captioned "Confession: This is why I am $1.2 billion in debt," Kiyosaki explained his controversial stance.

"Today, I own about 12,000 rental units. How did I acquire those properties? I used debt. See, the more debt I use, the more property I own, the less tax I pay," Kiyosaki said.

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He went on to argue that taxes are a "Marxist idea," referencing "The Communist Manifesto." "And people say, ‘Well, you should pay taxes.' No, we shouldn't. America was founded as a tax-free nation… We were tax-free until 1913 when the Fed was created. The same year, guess what else was created? The IRS."

Kiyosaki didn't stop there. He took it a step further, declaring, "And I think it's an American duty not to pay our taxes. Because if you read the Communist Manifesto, you'd know why."

Kiyosaki's strategy relies on leveraging debt to acquire income-generating real estate while taking advantage of tax laws that allow deductions, depreciation, and other benefits. And he's not just talking about it—he's doing it.

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The Real Estate Tax Advantages

Kiyosaki's approach isn't some loophole; it's built into U.S. tax law. Real estate investing offers several legal ways to reduce taxable income:

• Depreciation Deductions – Investors can deduct the "wear and tear" of a rental property over time, lowering taxable income.
• Mortgage Interest Deductions – The interest paid on a rental property mortgage is tax-deductible.
• Pass-Through Deduction – Real estate investors may qualify for a 20% deduction on qualified business income under the Tax Cuts and Jobs Act.
• 1031 Exchanges – Investors can defer capital gains taxes by reinvesting profits from one property sale into another.
• Deductible Expenses – Property taxes, management fees, repairs, maintenance, insurance, and legal costs can all reduce taxable income.
• Opportunity Zones – Investing in designated low-income areas can offer substantial tax incentives, including deferred or reduced capital gains taxes.

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‘Debt Is Money'

Kiyosaki's approach extends beyond real estate. "I'm a billion dollars in debt because debt is money," he said during a November 2023 interview on the "Disruptors" podcast. He explained that rather than relying on cash, he invests in tangible assets like gold and silver, believing they'll hold value better than the U.S. dollar.

While Kiyosaki's strategy works for him, it's not a one-size-fits-all solution. Leveraging debt for investments can be highly risky, especially without a deep understanding of market cycles, property management, and tax law. What works for a billionaire with thousands of rental properties isn't necessarily a blueprint for the average investor.

If you're considering using debt as an investment tool, consulting a financial advisor or tax professional is crucial. The tax code is complex, and what sounds great in theory can backfire without proper planning.

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