While I would never presume to contradict the inimitable Ron Swanson, he left out half the lesson. Sure, the guv’mint takes a percentage of your money in taxes. But it’s not all doom and gloom and stolen lunches! For as they say, “There ain’t no such thing as a free lunch,” and those dastardly G-men actually give us a useful thing or two in exchange for our taxes.
So listen up, kids! Your days of hating taxes are about to come to… a middle!
What are taxes?
Some view taxes as a reverse-Robin-Hoodian scam in which the powerful rob from the poor and hoard for the rich. I mean, what else are we to think when you don’t get to keep 100% of the money you earn to do with as you please?
No, stop clenching your fists and waving your pitchforks! That’s the opposite of what I wanted from you!
Listen, taxes serve a valuable purpose in civilized society. They’re basically the annual fee we pay for membership in the country. We pay a percentage of our money in taxes to our city, state, and federal governments, and in exchange those governments do things for us. And since I assume you like having roads to drive on, schools for educating the next generation, and the Post Office, then taxes really aren’t all that bad.
We get taxed in a number of ways. Here are some of the most common forms of taxation:
- Income tax: These taxes come directly out of your pay check. Basically, it means you get taxed for making money, which… isn’t as bad as it sounds.
- Property tax: If you own land or a home, it’s taxed. If you have a mortgage, the taxes on your property are included in the cost of the mortgage. If you don’t have a mortgage, you’ll have to settle up once a year during Tax Season (more on that below).
- Sales tax: Calculated into the cost of the goods you’re purchasing at check out. You’re getting taxed for buying stuff.
- Capital gains tax: You pay this tax if you profit from your investments, whether it be in the stock market or from the sale of property.
- Estate tax: If you leave money and property behind for your heirs when you shuffle off this mortal coil, they’ll get taxed on it. Which sounds cruel, but really only applies to those who can seriously afford to pay such a tax.
- Corporate and business taxes: Just like it sounds, these are the taxes paid on sales, capital gains, income, and property paid by a business or corporation instead of an individual.
State taxes vs. federal taxes
Here is a partial list of things your city and state taxes fund:
- Education (preschool, public schools, state universities, community colleges, vocational institutions)
- Health care (Medicaid, Children’s Health Insurance Program, etc.)
- Transportation (roads, bridges, buses, subways)
- Corrections facilities (jails, prisons, juvenile detention facilities, parole programs)
- Low-income assistance (check out our article on How to Start at Rock Bottom for more)
- State and local police forces, fire departments, and first responders
- Environmental programs
- Health insurance, pensions, and other benefits for public employees
- Care for residents with disabilities
- Parks and recreation
- Economic development
- THE MUTHAFUCKIN PUBLIC LIBRARY
- Other useful shit in and around your city and state
It’s pretty easy to justify paying your local taxes. After all, I think my regular use of the public library alone justifies the taxes I pay in my state. And for more on how you too can take advantage of all them taxes you’re paying for the public library, check out these heartfelt odes to the library written by your humble Bitches:
- The Library Is a Magical Place and You Should Fucking Go There
- Your Library Lets You Stream Audiobooks and Ebooks FOR FREEEEE
Local taxes result in tangible improvements in your immediate surroundings. Infrastructure is improved, schools are built, parks are maintained. Your street lights remain lit, your city bus runs on time, and your trash gets picked up. All good things!
By contrast, it is sometimes harder to see—or justify—the benefits of our federal taxes.
I know, Nelly, I know. But here are some of the ways our federal tax dollars are used:
- Defense and security (all branches of the armed forces)
- Social Security (you’re welcome, Grandma)
- Major health programs (Medicare, Medicaid, CHIP, etc)
- The Social Safety Net (unemployment insurance, food stamps, low-income housing assistance, social services for children, and much, much more)
- Interest on the national debt (which we owe to… other countries I guess? Definitely not the Decepticons.)
- Benefits for federal employees and veterans (must… resist… criticizing the VA…)
- Scientific and medical research
- Foreign aid
- Various government agencies (FBI, CIA, EPA, GTE*)
- Arts and culture (the National Endowment for the Arts among other programs, though this is honestly such a minuscule part of the budget I hesitate to include it)
- Infrastructure (because we don’t have enough of this sexy shit in the state and local spending)
Like 98% of political disagreements concern how our taxes are allocated among the above line items. Politics is fun, you guys!
*Not actually a government agency. Just some random letters I threw together. But I had you googling for a second there, didn’t I?
“I don’t want to pay for [insert tax-funded thing here]!”
Sorry cupcake. That’s not how it works. We are all in this together, and that means we all pay for stuff that isn’t personally useful or pleasing, but helps out somebody else in this gigantic syndicate we call a country.
I feel you! But listen. I personally am pretty unhappy that my taxes are funding drone strikes on civilians in Afghanistan. I’d love to trade with the guy who complains about his taxes going to fund Planned Parenthood*, but we don’t get to choose.
What we do get to do is find a big old straw so we can suck it up.
Oh yeah, and voting helps too.
Again, most of politics is deciding how to use taxes.** So if you’re angry about your taxes being used to fund the CIA when you would rather they went to Meals On Wheels, fucking register to vote and remind your elected officials that those fuckers work for you.
*Because of the Hyde Amendment, taxes cannot be used to fund abortions. Planned Parenthood and other reproductive healthcare clinics aren’t even a line item in the federal budget. No, when people talk about “federal funding for abortions,” they’re talking about how people who pay for their healthcare with Medicaid and Medicare get treatment at Planned Parenthood and other clinics that happen to provide abortions. So it follows that “defund Planned Parenthood” actually means “defund Medicaid,” which actually actually means “I don’t think poor people should be allowed to receive healthcare.” Just so we’re clear. #prochoice #feminism
**Not intended to be a factual statement.
Beware the Ides of April
When we talk about “doing your taxes,” we’re referring to the time of year when we all file paperwork with the IRS. This paperwork reports your income, expenses, and other relevant information. It’s what allows you to calculate tax liability, schedule tax payments, or request a refund for paying more taxes than necessary during the year.
Simply put: on the 15th of April, the paperwork that will determine whether you owe the government still more taxes or whether they owe some back to you is due.
That’s right. It sucks especially hard for people who work multiple part-time jobs or run their own small businesses, who might not pay income taxes throughout the year. They need to make sure they have enough set aside to pay The Man on April 15th. And if they don’t have it, they’re fucked.
A lot of people get tax refunds, which sounds exciting but is actually a bittersweet reminder that the government held onto your money all year long and is just now returning it to you. Thanks, government. Not like I could’ve used that money when I earned it.
If you’re tired of paying taxes and would prefer to spend your money on a worthy cause… well, you’re shit out of luck because you don’t get to opt out of taxes without opting out of every country on Earth and moving to Mars to grow potatoes.
But if you’d like to spend some money on a worthy cause in addition to your taxes, then I humbly suggest you join our Patreon. We will definitely use your money to buy cheese crackers and spend hours dissecting Disney movies, which I think we can all agree is way more important than the national infrastructure.
THANK YOU. I cannot stand people who complain about taxes but also don’t recognize that in this country we expect SO MUCH in the way of social services. Until someone comes up with a legitimate alternative plan for how to fund that road you’re driving your brand-new SUV on, I don’t wanna hear your complaining about taxes.
But I also wrote a post about things I don’t regret spending money on and included my taxes in there (because yeah, THE MUTHAFUCKIN PUBLIC LIBRARY), so what do I know? I’m just a goddamn socialist baby-killer SJW hippie ¯\_(ツ)_/¯
STAY WHERE YOU ARE.
WE HAVE DEPLOYED A SQUAD OF HIGHLY-PAID LIBERTARIAN ENGINEERS TO YOUR LOCATION. THEY WILL EXPLAIN TO YOU THAT TAXATION IS THEFT, AND THE FREE MARKET WILL BUILD IRRIGATION DITCHES FOR ALL THE LITTLE CHILDREN, AND THEN YOU WILL EAT THE CORRECT COLORED PILL AND GROW WEED AND BE FREE.
YOU WILL KNOW THEY ARE THERE WHEN YOU HEAR WHOOPING CRIES OF “actually… actually…” DO NOT OPEN THE DOOR FOR ANYONE ELSE.
OH THANK GOD I’VE BEEN WAITING FOR SOMEONE TO RESCUE ME FROM MYSELF MY WHOLE LIFE
I’m a libertarian and I do believe in paying taxes. I don’t believe taxation is theft. I believe taxes should be low since I believe in small government (and a small government doesn’t need a lot of tax revenue) but I do believe that the government should provide roads, military, police, courts of law, etc… and for it to exist, we must pay taxes. With this said, I do think that the government does waist a lot of tax dollars on things such as bail outs to Wall Street, farm subsidies, military interventions in 7 different countries, the war on drugs, and other activities that it shouldn’t be in the business of spending money on in the first place. I’m also more in favor of a flat tax rate without all of the complicated tax cuts and exemptions (which especially become relevant when we talk about corporate taxes) as well as consumption taxes. Only a small minority of libertarians actually believe that “taxation is theft” (I guess only anarcho-capitalists would be in that category). The majority of us want to have low taxes, small government, and the type of government that for the most part stands out of our business as long as what we do does not directly harm other people.
Can we be best friends? Every other libertarian I’ve met turns out to be a huge hypocrite. Your stance sounds like what libertarianism SHOULD be, but I’ve met so many who are like “Small government! Flat tax!” until you mention getting rid of tax cuts for corporations and making reproductive healthcare more accessible and then suddenly they walk back on the principles they pretend to espouse.
I want to hear more about YOUR libertarian views.
You probably have my email saved somewhere in your system so feel free to reach out and ask about my views if you want to. We would probably disagree on about 50% of the issues, though. But yes, I do think tax cuts for corporations cause an unintentional (or in some cases intentional) intervention by the government into the free-market economy, which often ends up causing more harm then good for consumers.
I want to start a club of socialist baby-killer SJW hippies.
Seconded. We could have a secret handshake and maybe t-shirts.
Property tax: If you own land or a home, it’s taxed. If you have a mortgage, the taxes on your property are included in the cost of the mortgage. If you don’t have a mortgage, you’ll have to settle up once a year during Tax Season (more on that below).
I actually refused to let my property taxes be rolled into my mortgage payment – I pay my taxes 2x a year by writing a big ole cheque and mailing it in 😉
Sadly, the post office isn’t financed by taxpayer dollars, just from the cost of goods and services like stamps. Which explains why they’re always in the red. It’s too bad though, as I’d rather see my hard earned cash go to libraries and post offices than to wars.
They are not really in the red–it is a shell game that the feds require them to front load pension plans, which no other agency is forced to do. SO, it makes them look much worse off than they are. I think it is a way to try and push through privatization, because, you know, it has worked so well with for-profit prisons and farmed out child protection services in some states. (Hysterical laughter here.)
I’ve heard that the private carriers (FedEx and UPS among others) are trying to lobby the PO out of existence. Which makes me intensely sad. But thank you for the correction and I will change the article accordingly!
I *adore* the fact that I can put a 49-cent stamp on a letter and drop it at the post office in Anchorage, Alaska, and have it hand-delivered to my dad in Tarpon Springs, Florida. What the heck would private carriers charge???
Also love the library (wrote most of my second book there), roads, emergency services, etc. etc.
When I hear people grumble, “Why should I pay for schools I don’t even have kids so why is it my responsibility to pay for other people’s kids,” I just want to lie down with a cold cloth on my eyes.
Regarding birth control, I just see freakin’ RED when I hear the yelping over Planned Parenthood and the sanctity of life — and the concurrent shrieking about government handouts for little things like food stamps and Head Start. Apparently a big number of people believe that life begins at conception and ends at birth. Don’t use birth control and definitely don’t have abortions, but don’t expect help surviving, you slutty unmarried moms, you.
[that thumping sound you hear is me jumping down from my soapbox]
I love it when you’re on your soapbox.
The “I don’t have kids so I shouldn’t pay for schools” argument is my current blow-smoke-out-my-ears thang. It’s so short-sighted, so selfish, and frankly? It’s anti-American. THERE I SAID IT.
The US government actually owes a lot of the national debt to itself (it’s weird, I know). It’s because the government invests in Treasury bonds, the safest asset pretty much in the whole world, to fund entitlement services. Also, the Fed bought up a bunch of treasuries for quantitative easing under the Obama administration. The rest is split among individual and institutional investors. Most foreign investment unsurprisingly comes from China.
Also if you were ever curious what the federal spending budget looks like, the posters do a great job breaking it down: https://www.timeplots.com/collections/catalog/products/death-and-taxes-2016
Well I know what my homework is now! I’m still trying to understand the national debt vs. the national deficit.
Srsly tho… are you sure we don’t owe money to the Decepticons?
Deficit is the ongoing shortfall between revenue and spending. So if you earn $2k/month but spend $2.5k/month, you run a deficit of $500/month.
Debt is the cumulative amount liabilities exceed assets. So in the above example, if you started with $0, after 2 years of the same revenue and spending you’ll have accumulated a debt of $12k.
I’m not sure that we don’t owe money to the Decepticons, but that’s only because it may turn out we were the Decpticons all along! dun dun dunnnnnnn
Actually we owe most of the national debt to ourselves (in the form of bonds).
There’s three reasonable things people who want to complain about taxes funding the military can do: (1) lobby/organize/call your congressperson against military spending (2) keep your income low enough that you don’t owe federal tax (I know several people who do this on explicitly anti-war grounds) (3) openly refuse to pay taxes and probably end up in jail (this is extremely rare, but is a time-honored civil disobedience tactic).
I’m at a very wimpy form of (1) right now but if I’m unemployed next year I’ve sworn to spend an hour a day on a street corner with a sign saying “Why Are We At War in X Countries?” because, come ON.
(I guess this is true of all complaints about taxes — mine is about excessive defense spending, but if you want to complain about something else…. It’s just that military and SS/Medicare funding are the only places to make a dent. Everything else is small potatoes.)
I don’t think that’s wimpy at all! I think voting and contacting our representatives to hold them accountable is something we all must do, especially when it comes to spending on wars.
As a government tax attorney, this is appreciated!
My pleasure!
Excellent article! There’s definitely a perception among some people that taxes are things “other” people pay, and they will hire people at great expense to minimize their taxes. Meanwhile, they enjoy all the benefits that government provides, and then complain their taxes are too high. Now I don’t enjoy the process of paying taxes, certainly, especially now that I’m an LLC, but once it’s done it’s over.
Thank you! That’s what I was all!
I really want to know how much people like the Koch brothers save by paying lawyers to help them avoid taxes, flouting EPA laws, and then getting fined millions of dollars for avoiding taxes and flouting EPA laws. I hope it isn’t much.
I’m happy to pay taxes, since I’ve spent my entire career in local and state government jobs. I’ve been first-hand the work that is done on behalf of the public, but I’ve also seen the waste and the dead-weight government employees that give us all a bad wrap.
It’s a thankless job, but I’m proud of the work I’ve done to make my communities a better place to live and for tourists to visit. I don’t save lives in the same way that police and fire do, but floodplain management saves life and property during storm events that we’re seeing more frequently (FUCKING CLIMATE CHANGE IS REAL!!!)
We salute you sir! And re: climate change ONCE MORE FOR THE PEOPLE IN THE BACK.
I wanted to share this on mom’s bookkeeping/accounting business Facebook page that I manage, and she LOVED the article due to the information shared, but she felt that the article would be “offensive” for some of the audience that don’t handle swearing well (she is of an older generation). I disagree with her thought, but mom have the ability to overrule everything on her page and she’s aware that I focus more on my generation (millennial) and younger when I pitch finances related articles to be shared because I’m trying to get more young people to learn about her services.
However, I agree 100000% with this on why taxes are to be paid. Heck, mom does countless tax preparation for her many clients and she’s very knowledgeable about taxes, unlike me, but I’m learning a bit. Now, to figure out how to make dollar bills rain on my dogs for an advertisement for her business and accompanying phrases… Honestly, I’m better with pictures ideas than coming up with words.
Thanks you SO MUCH!!!
There is one really rich guy who lives on a yacht and swims around in international waters for most of the time to avoid paying taxes. (He is not a US citizen so he only needs to pay taxes to a country in which he resides. And since he doesn’t reside in any country, there is no clear answer when it comes to which country should tax him.) He gets away with it but I can’t imagine how inconvenient this must be. Tbh, it’s just easier to pay taxes.
Only one? 😉 Point taken. As usual, the rich have options even when it comes to avoiding taxes. The rest of us… not so much.
Can’t wait for the day when I will be in that tax bracket.