How Much Do Taxes Matter To You?

Susan writes in:

I feel so helpless as a taxpayer, watching the ridiculous directions the senate, house and president are taking my country. Being self-employed, in the medical field and living in NY I feel like I have three strikes against me. As Emma Goldman, the famous communist said, “If voting changed anything, it would be illegal.” I am seriously considering relocating to my home state of Indiana, where Gov. McConnell seems to be making some very fiscally responsible decisions. I am, however, 58, and moving seems to be more of an issue than is was at 20. What sort of feedback do you get from other taxpayers?

Personally, I agree with Susan to a certain extent. However, my interest is mostly in local taxes, to tell the truth. I’m worried about roads. I’m worried about our local fire department. I just tend to focus locally on most of this stuff, without as much concern on the national level.

I’ll be honest: I get next to no feedback at all when it comes to taxes. On the occasions when I do get feedback about taxes, it’s usually in a form described by Susan – they’re angry at the government’s use of their taxpayer dollars.

In truth, taxes are where the rubber meets the road in terms of politics and personal finance. Without tax dollars, the government cannot run.

Few would argue that there aren’t benefits from our tax dollars. Tax dollars pay for roads, bridges, fire departments, and many other services that we simply take for granted every day.

Most would argue that some aspect of their tax dollars’ use doesn’t please them, too. There are endless arguments about public and private funding of various services that people use, and these arguments have been around since nearly the dawn of time.

But when push comes to shove and the tax bill comes due, it’s not looked at as a political issue for most people. Taxes are a bill that need to be paid – and it’s worthwhile to minimize that bill. People seek out tax deductions that are available for them, plan around tax-free holidays, and seek out ways to make purchases that avoid sales tax.

To put it simply, taxes are a personal finance matter for most people, not a political matter. They aren’t worried about where their tax dollars are going as much as they are concerned about minimizing how many dollars they pay out without getting in trouble.

Why is this? I think that for many people, the connection between going to the local polling place to vote and their wallet is too tenuous. Obviously, it exists, but for the most part, the thought processes that go into deciding who to vote for and the thought processes that go into voting are distinct. When they do overlap, it’s usually by people who see it as their goal to minimize taxation at the expense of provided services. That’s why you see tax protests but rarely see people advocating paying more taxes.

Is that a healthy solution? I’m not really qualified to say, but I do think it is a natural solution. It’s much easier to look at things from the perspective of “how does this affect me” than “how does this affect the world” when dealing with the affairs of everyday life, like paying taxes. Given the complexity of modern life, it seems that the political side of taxes is mostly focused on by people who are passionate about politics and largely ignored by people who aren’t similarly passionate.

I look at it much like I do environmentalism. Humanity’s impact on the environment is constantly in our face, from weather changes to trash along the side of the road. For some people, this lights them on fire and they focus intently on reducing their carbon footprint and minimizing their waste. For others? It’s basically a problem that doesn’t fill them with passion and they don’t worry about it too much in their day to day lives. Sure, if there’s something simple to be done, they’ll do it, but they’re not going to start living ultra-green to do it.

I think this is largely driven by the media. A few years ago, being green was “cool” and lots of people were focusing on the environment. Now, frugality seems to be “cool” (at least to some extent) and the media’s giving that attention and thus lots of people are thinking about it. In a few years, it’ll be some other cause that people can take action on with little steps and feel good about themselves for doing something positive. Maybe it’ll be taxes. Or maybe it’ll be something we don’t even foresee, like some sort of local food revolution. It’s very hard to tell.

In the end, though, taxes, for most people, are just another bill to pay. Sure, it’d be great to have a smaller bill, but if that means losing some service they rely on or value, they’re not too interested, and the details are something for people in Washington to work out.

What do you think? Are taxes just another bill to pay, or is excessive taxation something you’re interested in fighting with larger steps (like moving to another state, protesting, or getting politically involved)? I don’t think there’s really a right or wrong answer here at all.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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