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Tax Day: What If You Didn’t Have to Pay?

What could you do with the money you forked over in taxes last year?

by
Walter Hudson

Bio

April 15, 2014 - 7:27 am

a

As the father of a young family, I have taken a fanatical interest in my household finances. Curious whether I could squeeze more juice out of our budgetary lemon, I took a look at our monthly expenses as a percentage of our take-home income.

To my astonishment, I found that 84% of our take-home income goes to essential expenses. By “essential,” I mean items which cannot be cancelled or reduced. These are things like rent, fuel, insurance, and groceries. We already minimize these expenses as much as possible.

To my further astonishment, I found that all of the elective expenses in our monthly budget, things like Netflix, hosting my websites, and maintaining a subscription to Star Wars: The Old Republic, total up to a mere 3% of my take-home income. If I really cut to the bone and went without my entertainments and hobbies, I would hardly save enough to speak of. This proves problematic, because I have outstanding liabilities which must eventually be met, not to mention things which I would like to save for – including stuff like retirement.

I hold down three jobs. My wife has two. So we’re not exactly slacking. Be that as it may, I figure we need to conjure up a way to bring home a certain amount more per month in order to advance beyond treading water to actually getting somewhere.

As it turns out, I already earn more than I figure I need. The only problem is that I don’t get to keep it. It gets confiscated before I ever see it and sent to state and federal government.

If I could actually use what I rightfully earned last year, I would be able to pay off every outstanding bill. I would be able to replace my aging laptop with a decent machine that could get me through the next five years. And I would have enough left over to put a serious dent in my auto or student loans.

How about you? What could you do with the money you lost to government last year? What happiness could you pursue? What values could you secure? Leave a comment below.

Walter Hudson advocates for individual rights, serving on the boards of the Republican Liberty Caucus of Minnesota, Minnesota Majority and the Minority Liberty Alliance. He maintains a blog and daily podcast entitled Fightin Words. He also contributes to True North, a hub of conservative Minnesotan commentary, and regularly appears on the Twin Cities News Talk Weekend Roundtable on KTCN AM 1130. Follow his work via Twitter and Facebook.

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All Comments   (4)
All Comments   (4)
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I am self employed. Sometime during the first quarter of every year I review my business expenses. In most cases, those expenses are not just numbers: I know some of the people behind those expenses pretty well. I know that I've helped buy groceries and pay the rent. I've helped pay for a child's braces and and for someone's college education. The list goes on and on. I've often thought of the additional people I could help if I did not have to pay that large income tax bill. And yet Barack Obama calls me 'greedy'.
14 weeks ago
14 weeks ago Link To Comment
I could buy a car. Not an extravagant one, but a nice one. Projected forward I could pay off my house in a handful of years.

Though I agree with Mike M. that taxes have their place, it's still interesting to think about it, and I think it's valuable. Most people don't look at that number. They look at the number of the refund/payment. It winds up being like healthcare, transparent to the consumer at the time of payment. It only hits home in aggregate which isn't specific enough to motivate actual change bc the incentives are warped.

14 weeks ago
14 weeks ago Link To Comment
I would probably wind up spending it on protection, roads, litigation services. If one looks at tax receipts and the portion of the budget that is enumerated as a power to do things in the constitution you'll note a similarity. The rest is all done on borrowed money. So, if I didn't pay taxes I would still pay.
14 weeks ago
14 weeks ago Link To Comment
Fair point. Of course, the vital difference is that you would choose to pay as you deemed necessary, and would benefit from the cost and quality controls of the market. There's no telling precisely what effect that would have on the final percentage of your income spent on "government" services. But that percentage would undoubtedly decrease as you earned more, instead of increasing as it does today. Imagine what effect that would have upon incentives to produce and improve the lives of yourself and others through trade. The sky's the limit.
14 weeks ago
14 weeks ago Link To Comment
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