Help! I Don’t Know What to Think About Taxes!
Question: I don’t know what to think about taxes. Our country seems in serious debt. The rich are getting much richer while more of us face what we now call “food insecurity.” I’m not worried about hunger, but I’ve got kids and college bills and retirement. I’m not thriving. It seems the system is rigged so that rich people don’t have to pay much of anything. I’m not going to cheat. I even feel guilty about looking for loopholes, but I also feel stupid for not trying to take advantage of the system when and if I can. Can you help me think this through?
Paul Sutherland: A democracy works well when people are honest and can trust the “system.” It fails when the “system” starts to lose the trust of its participants. Your question makes me sad in that it reflects the current mood of our country, and your comments are true to a very large extent. The rich are getting richer, the poor poorer, and those in the middle are struggling with balancing their personal, family, and community needs.
Everything is relative. We Americans are rich; if you own a car you’re a member of the world’s 1 percent. We have a safety net, charities, and good people who have resources to support us when we are down. So please relax and enjoy your life and think balance, which means being modest, living within your means, and not feeling like a victim because your car is 10 years old.
The government has “loopholes” to help incentivize certain activities. 401(k)s, IRAs, and solar energy tax credits might look like loopholes, but for the person who does not want to be a burden on society in their old age, or wishes to have less impact on the environment, they do good for society, save taxes, and sometimes even help the environment. So pay your taxes, but not more than you need to. Use your 401(k) or IRA to save taxes as you grow funds for retirement.
You say you’re not thriving. That concerns me most. I guess I would ask what that means. Is thriving about financial stuff? Is thriving about having loving friendships and great relationships in our lives? Is thriving about being at peace with our lives and enjoying the ride, feeling grateful for what we have?
Your letter reminds me of one of my favorite stories: There was a monk who was greatly loved in his community. The angels came one night and took him to the afterlife. He enjoyed the afterlife; there was much for him to do because so many needed his counseling and comfort. He was very happy. A few weeks after his death the angels came back and said, “We are so sorry! We brought you to hell, and you were destined for heaven. We would like to take you where you’re supposed to be.” The monk pondered the statement as those around him confirmed that he was in fact in hell. The monk looked around at the people in hell and said, “I think I’ll stay!”
If you retire at age 70 or 75 and are enjoying your life, you are thriving. Your children can attend community college, work summers and weekends, and they will, if motivated, eventually get their college degree—even without your help. Your children’s success is up to them. Bottom line: relax and enjoy your life.
Side note: Americans needs a kick in the pants. We need to be a democracy again that is not run by the rich or a few families. Get involved in politics both locally and nationally. Work to help make our world a utopia. If you don’t like what you see—work to change it.