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Like most Americans I pay taxes, income taxes both federal and state, sales taxes, property taxes and for fifty years, payroll taxes and I’m still, at age 81, paying income, sales and property taxes – plus assorted other miner taxes and fees on goods and services.
Like any normal person, I think it would be nice not to pay taxes and keep all my money. But unlike too many of the uninformed people ranting on social media these days, I understand why taxes are necessary.
Oh yes, money is used inefficiently by government – just as it is, at times, similarly misused by charities, political organization and profit making businesses.
And some Americans – individuals of all sorts – commit fraud and steal money from taxpayers. That has been going on since there have been governments.
Medicare has uncovered tens of billions of dollars in improper payments in the last five years alone – mostly fraud perpetrated by health care providers of some type, often in concert with patients.
Some social media rants are about money spent on foreign aid and welfare. All welfare programs equal about 7% of the budget and foreign aid around 1.2%. On the other hand Social Security and Medicare combined equal about 33-36% of the budget.
None of that changes the need for taxes and all the things taxes support. None of that justifies the calls for no taxes, especially from older Americans based on previously paying their dues. And certainly avoiding taxes should not be based on the job a person does or hours worked.
Over fifty years I paid $230,000 in Social Security and Medicare taxes. Not counting income taxes paid to those trusts after retirement.
However, during our 15 retirement years so far Connie and I have collected in SS and Medicare benefits way more than I paid in taxes.
Also, I estimate that since I retired in 2010 I paid $195,000 in property taxes. Those taxes pay to run my town, county and our school system. My children received a good education paid for by other citizens young and old both with and without children, so why shouldn’t I do the same? What makes 21st century seniors different?
Some people claim the wealthy don’t pay their fare share and that if they did others could pay less. That’s not accurate either. Even the wealthy don’t have enough cash given the federal government alone spends about $18 billion a day.
The current American rant against taxes is short-sighted and unfounded – and fiscally risky at best.
Americans seem unable to make the connection between wants, needs and desires from their collective society and paying for them. In fact, even now we turn our backs on paying the bill. Interest payments alone are about 14% of federal spending and rising.
The United States is among the lowest taxed and highest indebted of developed countries. And still many Americans expect – demand – lower taxes.😱
The answer in retirement is usually based on changes to both income and expenses to make withdrawals for the long term. This post seems to only look at one side of the equation, much like some politicians. I would like to hear how our esteemed writer would balance income and expenses to shore up the country’s financial future.
Given over 60% of spending is mandatory on SS, Medicare, Medicaid, SNAP, veterans benefits and federal and military retirement benefits, plus health insurance for tens of millions, cutting expenses is not going to do it. Nor should it if we want to support Americans.
All this and many people want more of this or that and we have yet to focus on making SS and Medicare solvent.
The idea that there are massive opportunities to reduce spending is a myth.
We simply need to pay for what we want as citizens.
When comparing taxes here to other places you’d have to back out what they pay for health insurance (or add in what we pay) otherwise it’s an apples to oranges comparison.
Do you think Americans would pay taxes more willingly if there was more transparency in spending?
There is plenty of transparency if you want to look. Instead Americans rely on social media where you can find things like social security would be fine if Congress hadn’t stole the money.
You make the point. High taxes in places like Denmark are largely offset by extensive social services so the taxes are accepted because the value is apparent every day. And, the daily stress on individuals is less.
Try that in the US with something as basic as paying for healthcare and you are crucified by ignorance.
USAID is an entire organization that exists to obscure transparency. What we usually get are big picture numbers that don’t explain much. (You probably spend 10x more time on social media than I do)
When I found out how much my local school district was spending to settle lawsuits (because making changes was too onerous for their admins), I was appalled.
My point on the comparisons is just that it doesn’t work if you aren’t careful to compare like to like. (it just doesn’t mean anything to say the US is taxed less if other places include far more in their taxes)
But I bet you could have attended local school board meetings if you wanted to.
Also, isn’t this what I’m saying?
If people think that they have to attend the meetings to know, it sends the message that they’re hiding things where they can.
A counter argument would be that you think people would be anti-tax no matter how much knowledge they have.
Or that people do know where the money goes (which given your social media comment you don’t think is true).
Perhaps it’s as simple as the story of the birth of out nation is laden with anti-tax messaging such that we’d need to change that, if we want a change in our perception of taxation?
People need to participate or they have no cause to complain in my view. Being aware as I wrote.
Our HOA has monthly open meetings. They discuss all issues affecting the community, they report on finances. We can ask questions.
If a person does not attend, they miss the discussion, but can still read the minutes and review the budget.
They weren’t talking about it there either. I only found out because I knew someone affected.
Taxes and deficit: One major political party ignores the problem; the other has convinced almost everyone that lower taxes are the solution to everything.
As a recent retiree I am embarrassed about how little I pay in taxes.
Great post. Agree 100%
I agree that taxes should be the glue that helps hold civil society together. Right now we seem to have too many people who are seen as “other” rather than part of the same society.
My main complaint about taxes in the US is the sheer number, and the complexity. I have visited over 70 countries and I can’t think of another where the price you see is not the price you pay (aside from markets where you bargain, where no price is displayed in the first place). Not only that, a few miles away the total price is probably different! Same with property taxes and auto taxes. If I moved to the next town, never mind the next county, I would pay more. Or less.
Then there is ridiculous income tax system. Why do I have to fill in a bunch of forms to tell the IRS what it already knows? Why does the code fill hundreds – or is it thousands – of pages? I don’t object to paying taxes, but I do object, strongly, to the complexity.
Living in the bubble has become an American pastime.
I worry for my children and grandchildren when the bubble bursts.
Not just the US but yes a lot of countries are now caught in a populist death spiral of inadequate taxation but political rewards for those who promise to deliver lower personal taxes. Easiest political message in the world: “Politician A wants to steal your money to give to (Targeted Minority) B”.
Consequence ultimately is for those who keep voting for those saying such things is that they penalise fellow citizens in terms of education, lifetime opportunities, health outcomes etc and create a foundation for crime.
And in my best Mr. T voice, I pity the fool (politician) who says we need to raise taxes.
Yup, and that’s a big part of our problem.
My thinking has come around to favoring term limits. Perhaps if they were losing their jobs anyway, they would begin to act in the best interest of the country, instead of engaging in their permanent campaigns.
Term and age limits
I used to think that too, but then it dawned on me. Why do we keep electing the same people time after time. The power of term limits is in our hands and always has been.
The problem is that voters want to throw out the other states’ elected bums, but want to keep their own.
Exactly. Make congressional districts more competitive. Figure out a way to end gerrymandering. The lack of competitive districts just plays to the extremes of both parties.
Gerrymandering, my party wouldn’t do such a thing🤣
It’s in the hands of those with money these days in this country.
Dick, it used to be my opinion that elections were essentially term limits, but to me, it just doesn’t seem like it’s working.
I agree, we vote on name recognition and the longer it goes the more recognition there is. I used to lobby in Washington from time to time. And their ability to lie to your face as part of an ordinary conversation was quite extraordinary.
IMHO, it’s more than taxes.
As a nation, we find ourselves at a peculiar cultural juncture where we have lost sight of our shared identity as one people. We are susceptible to the zero-sum game mentality, and the social media algorithms and opportunistic politicians only exacerbate these impulses for power and profit.
I am not sure what will break the cycle, but our grandchildren will bear the consequences of our mistakes. We will have to live with that reality.
The lost sight of our shared identity is among our most serious challenges today. Wish I had a solution.
Excellent observation.
Thank you, Dick. I thought this was a good rant and I agree with what you wrote. Chris