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When I searched HD I was surprised how many articles and Forum posts I wrote about taxes, all kinds of taxes over several years. The topic is so universal and so complex it is never dull and never not controversial.
These days social media is inundated with posts about taxes, the very great majority are nonsense or fake information. My favorite these days is seniors should be tax free because they “paid their dues.” Or, they should not pay property taxes if they don’t have a mortgage. That isn’t even logical. If you were paying property taxes and a mortgage isn’t it easier to pay property taxes when you don’t have a mortgage payment? You don’t need a spreadsheet to figure that out.
I live in the highest property tax state in the country. I have lived here all my life, my family has lived here for nearly 200 years. I knew property taxes were high, I have paid them since 1971 when we bought our first house. I knew they would continue after I retired which is something every other person knows as well. Isn’t factoring that in part of basic planning for retirement, including survivor planning?
Recently a comment on HD contained these words “tax adverse.” That got me thinking. Should we be tax adverse? If everyone enthusiastically embraced that idea, think of all that could collapse – education, Social Security, Medicare, our communities, heck, our country.
Like everyone else I pay income, sales, property and assorted other minor taxes. Add it all up and I would probably have 25 to 30% more to spend if there were no taxes.
I would also have a lot less of the many things taxes provide. It really upsets me when I read or hear that taxes are “illegal,” “a scam” or “the government or “they” are ripping us off.” People wonder out loud- “we don’t know how “they” spend our money. I think to my self or sometimes out loud “look it up.”
How does you local board of education, your town, your state spend money? You will find the vast majority of spending goes to services benefiting people. It’s not much different for federal taxes. Over 47% of the federal budget is directly for people – SS, Medicare, Medicaid and other health programs.
Many people complain about loopholes, which are actually legal ways to be tax adverse. They complain when wealthy people use them, but in reality investing in a Roth or using municipal bonds, accepting tax credits etc. are a form of loophole as well. What is tax planning after all but seeking ways to minimize the taxes we pay.
I am very bad at tax planning, I never did it. Some retirees even move to avoid income taxes, but in the end may find overall they are not saving money. I use municipal bonds, but then it may not be my best financial move. I use QCDs too, certainly a loophole many retirees can use, but before I discovered them, we gave the same amounts to charity anyway. That’s the extent of my attempts at planning.
Yup, our view of paying taxes is a curious thing. The most curious to me are the people who see no need for taxes at all or make no connection between taxes and the society in which they live. Documented taxes go back to 3500 BC and I bet there was grumbling when someone had to turn over a portion of their harvest for taxes and no doubt the person down the road was surely not paying their fair share.
I believe most people don’t understand taxes because the topic and how taxes are calculated is(are) so complicated to the point that people tune out. The second issue with taxes is that most people think they pay too much except for Warren Buffett. Finally, the people that set our taxes are influenced too much by political donations of the affluent and corporations.
To some extent I agree, for most filers taxes are not that complicated. There is withholding, a few deductions, maybe a credit and not much more.
While incredibly complicated, i believe most of the tax provision are there for pretty good reasons both corporate and individual. Have the reasons and their validity changed over the years, perhaps. But consider the tax provisions designed to motivate taxpayers into certain action.
Is the “carried interest” provision for the Ken Griffiths of the U.S. designated to motivate them to acquire more pied a terre(s)?
We Americans have an odd relationship with government. We complain about taxes and government spending in the abstract, but we really like the programs that benefit us.
True and not unique to Americans.
Yeah. I think it’s more pronounced here because our unique diversity gives this several different dimensions.
When I research this subject I find that Europeans still complain about taxes, but generally have a better understanding of what they receive in return for their taxes.
Americans just seem to complain.
I have a friend in England now retired who pays nothing for health coverage, no premiums, no out of pocket costs and insists it’s all “free” despite paying high taxes all his working life, but in retirement does not worry about paying for any healthcare. Americans can’t say that for sure.
check out breast cancer survival rates in the US vs UK— they’re higher in the US. That’s because screening starts earlier and there is easier access to new pricey treatments here. Given your family situation, you should be concerned about that. Me too — I was diagnosed at age 47 — three years earlier than the first screening would have occurred in the UK. I’ve since lived cancer free for over 30 years. I’ll pay for that!!
5-year survival rate is about 2% difference. I pay for that too, but it’s hardly related to the matter at hand. In any case, paying for healthcare under our system is not easy or possible for many Americans. I would debate that easier access to new treatments is a universal benefit in the US. The overall 5-year relative breast cancer survival rate for Black women in the United States is approximately 84% compared to 93% for white women. I wonder if a tax funded universal insurance system would change that?
In any case we are talking about taxes and what they provide, not healthcare systems. The choice does not require a socialized healthcare system like the UK.
Two things:
1) when I Google breast cancer survival rates US v UK, AI indicates the US average is 90.2% v 86 in the UK so that’s 4.2%. My guess is the numbers are averages across demographics and stages in both counties.
2) is this because if taxation or health care system? I’d argue the two are interconnected. Screening doesn’t start until age 50 in the UK —probably
because the finances of the UK national health can’t support 40 as in the US.
Taxes also pay for some screening in the US — think Medicaid. Early screening is associated with higher survival rates. As a person who was diagnosed very early and did survive, I am more than willing to pay taxes to assure others have the same benefit. Incidentally, early detection also accounts for disparities in other common cancerd such as colon, lung, etc.
As for advanced treatment, I think where care is obtained definitely matters. That’s why I continue to live in a city with property taxes that are considerably higher than those even in NJ.
Just curious what are high property taxes in your location? As i have mentioned i pay $14,000 on a two bedroom condo. Houses less than a mile from me pay $25,000 to $50,000 in a small town with no industry and few businesses.
For a 2000 sq ft house on a 45OO sq ft lot, I’ll be lucky if my taxes are $20,000 this year. I won’t know until just before Christmas! Ho! Ho! While this is still affordable for us, I do have great sympathy for many of the folks for whom I do taxes at Goodwill. I do see older people, with very modest means, who are being taxed out of very modest homes. These people could never have imagined paying outrageous taxes on little 800 sq ft homes— and couldn’t have planned for the tax. I also do Homestead Credit when prepping their tax— at most it’s about $2400 — and usually less.
The city is the state capital and home to the UW flagship campus, but there is also substantial business, most notably in insurance, biotech, and AI. Epic Sysrems, the developer of My Chart and other health care software is also present.
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