Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Financial Planning > Tax Planning > Tax Loss Harvesting

M*A*S*H Star Turned Mogul Wayne Rogers Blasts Tax Code, Offers Tips

Your article was successfully shared with the contacts you provided.

“Shoemaker, stick to your last!” was never an adage in which “M*A*S*H” TV star Wayne Rogers — a.k.a. Trapper John McIntyre — put much stock. While notching more than 70 screen credits over five decades, the actor was simultaneously building an even more successful career as a shrewd investor and entrepreneur embracing an array of businesses in which he had neither training nor experience.

Playing an affable Army surgeon in the CBS sitcom version of “M*A*S*H” (1972-1983), Rogers — together with Hawkeye, Hot Lips and Radar – used humor to help face Korean War horrors. Off-camera, Rogers, a Princeton grad, was busy investing his TV earnings in the market and even launched a firm to help other actors — including ex-roommate Peter Falk — rock stars, producers and writers with their investments and money management.

To date, helming Wayne Rogers & Co., the Alabama native has turned around troubled businesses; developed real estate; and co-owned a film distribution company, a vineyard, a restaurant and hotels, plus produced feature films, TV movies and hit Broadway shows.

Further, Rogers is CEO-chairman of Stop-N-Save convenience stores, chairman of the famed bridal boutique Kleinfeld, and on the board of Vishay Intertechnology. A founder of the Plaza Bank of Commerce and Premiere Community Bank of the Emerald Coast, he is also a principal owner of Delta Pacific Transportation Co.

Somehow, the multi-talented 80-year-old finds time to appear regularly as a panelist on Fox News Channel’s “Cashin’ In.”

His book, “Make Your Own Rules: A Renegade Guide to Unconventional Success” (AMACOM Books 2011), details the actor’s unorthodox rise in the business arena.

And Rogers’ post-“M*A*S*H” acting resume is nothing to sneeze at. Leaving the series after three seasons, he co-starred in the feature “Ghosts of Mississippi,” joined the cast of TV’s “House Calls” and guest-starred on a slew of other series, including “Murder, She Wrote” and “The Larry Sanders Show.” In the early 2000s, he was still snagging gigs.

Back in his Navy days, betting he’d earn a sizable sum someday, Rogers wanted to learn how to handle money wisely. He studied the market and put his knowledge to work managing a mythical $100,000 stock portfolio. Later, as an actor he hightailed it to Hollywood. Soon he was earning enough to invest for real.

ThinkAdvisor caught up with the outspoken Los Angeles-based Rogers to talk taxes — and, as it turned out, much, much more.

ThinkAdvisor: Do you still act?

Wayne Rogers: A friend who saw me on “Cashin’ In” said, “You don’t know what you’re talking about!” I said, “That’s why they call it acting!”

Do you manage money?

I’m not a registered advisor, so I don’t do it for a fee. But I do manage money in partnership, and I do small private placements in companies under $50 million in sales. Sen. Ron Wyden of Oregon, head of the Senate Finance Committee, has called the federal tax code “a dysfunctional, broken mess.” Agree or disagree?

Of course it’s a mess! The tax code was passed by people who don’t know what the hell they’re doing. It’s filled with all kinds of exceptions. The biggest problem is that corporate taxes in the U.S. are greater than they are overseas. So multinational companies leave most of their money overseas and avoid taxes in the U.S. It’s not evasion; it’s avoidance.

Suppose an individual wants to sell their business. What should they bear in mind tax-wise?

If your tax basis is very low and you sell it for very high, you’re going to pay a big tax. There are all kinds of things you need to do to limit your tax: If you’re a private owner of a business in your name and you haven’t done any tax planning along the way, then you’re in trouble because you’re going to give it away to the government. And that’s just dumb.

What if you own a family business?

The best thing to do is form a partnership with your children way beforehand so that you give it to them during your lifetime. That way, when you die, it’s not going to get taxed very much. If you want to sell the business, at least the basis is now down to a different level. After you die, the basis gets reassessed from the date of your death. So, if you bought the stock at $2 and it’s selling at $100 when you die, the basis will be $100; and no tax is required to be paid on the difference.

What’s the tax liability when you own a large position in a single company?

 The guys who ran Microsoft got rich by owning Microsoft stock, not by diversifying. But they don’t want to give it away [to the government]. That’s why Bill Gates is donating his money to his foundation. Anybody who’s wealthy didn’t get wealthy by being dumb. So he’s putting the money in a foundation that can be run by intelligent people and will do some good. They’re much better caretakers and spenders of wealth than the federal government.

Is tax-loss harvesting, selling an investment at a loss at the end of the year to offset capital gains, a good strategy?

Absolutely. If you’ve got a loser and some gains, why would you want to pay the government? Anything you can do to avoid giving your money to the government, you should do. They’re in the business of distributing wealth; individuals are in the business of building wealth.

Any other thoughts about estate planning to keep one’s tax bill lower?

If you don’t estate plan, you’re crazy. But you have to know all the nuances. You planned ahead by teaching yourself about the market while you were young. What was behind that?

At the time, I had about $1.98 to invest. But I wanted to be sure I wasn’t going to lose the money that I was eventually going to make. Every now and then we have crooks in this business.

There are lots of stories about actors who have been ripped off by financial professionals whom they trusted.

One of the problems for high-profile people, including actors and athletes, is that they’re very susceptible. You get the Madoff syndrome, where people think: “Oh, so and-so is with Madoff — he must be good. I’ll go to him too.” They don’t do any intelligent homework. And then they wake up one morning — and bingo! They’ve lost a lot of money. You’ve got to do your homework.

Last year the top income-tax rate rose from 35% to 39.6% for the country’s highest earners. Your thoughts?

I know this: The top 10% pays over 90% of the taxes in the U.S. But 47% of the people pay no federal income tax. Rich people’s earnings are paying the tax! It’s immaterial whether the rate was increased. The wealthy are still paying most of the taxes. They’re the ones who are supporting the government.

What’s the solution?

The remedy is for the government to stop spending. The federal government wastes money enormously. It’s out of control! Take the issue of global warming and financing businesses that will save on using fossil fuels. You’ve got dumb people running the government! Congress has its own pension plan and its own medical plan. They’re above the public.

If we had a Republican president and a Republican-controlled Senate, would your comments be different?

Not at all. This has nothing to do with parties. Both parties are bad. When you had  [George W.] Bush, all kinds of hanky-panky was going on, too. That hasn’t changed.

What do you think of the idea of trying to minimize taxes by dividing investments into a tax-deferred bucket, a tax-free bucket and a taxable-income bucket?

It’s much more complicated than that. Many wealthy people put a lot of their money in tax-free municipal bonds. That’s been a haven for the wealthy for a long time. But it’s becoming less and less attractive because state and local governments are going bankrupt.  The federal government has an advantage: They can print the money, which is what they do.

Any thoughts about the new 3.8% surtax on net investment income to fund Obamacare?

The government needs money — not just the federal government but, as I say, the states and municipalities. They’re spending more than they should. Regulation is causing a lot of the problem. Competition is the natural regulator, but the government doesn’t seem to understand that. We’re gradually going toward a fascistic economy — in the economic sense, not the political sense. Please elaborate.

You have large corporations, large government and large unions in cahoots with each other. Four or five banks control over 65% of the banking assets in this country. That’s insane. It’s a monopoly. There’s no more competition. Congress, in its stupidity, got rid of the Glass-Steagall Act and allowed commercial banks and investment banks to conglomerate. Allowing the banks to get together was one of the causes of the 1929 crash. Glass-Steagall was passed in 1933, but they abandoned it in 1999; and we had a crash seven or eight years later. And they wonder why. Well, the Congress is just dumb!

Do you see any other evidence of that?

When there’s an emergency, people make up law willy-nilly as they go along. If they foresaw the emergency, that wouldn’t happen. Dodd-Frank is another “masterpiece” — 2,200 pages long! Barney Frank couldn’t find his ass with both hands, and Chris Dodd was a woman chaser. These are two idiots who dreamed up that law and plastered their names on it. Then they got out of Congress. It’s a terrible law — embarrassing.

Do you think the U.S. tax code should be overhauled?

Once you give the government the power to spend, as opposed to the power to tax, and they start spending more, taxes are going to follow. So you’ve got to overhaul the spending first: Stop the spending. Then you can get to the taxes. But you can’t because all the hogs are at the trough, and they want their piece of the pie. So they’re going to spend. It’s a highway to nowhere.

How come you haven’t run for political office?

If I were 30 years younger, I think I would.

What would you run for?

Probably Congress.

For more tax planning stories, check out our Special Report 21 Days of Tax Planning Advice for 2014 home page.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.