I love reframing how I view the world. A tax reform bill passed near the end of last year so taxes have been in the public eye for a bit now. Though I don’t agree with exactly how my tax dollars are spent I do not mind paying taxes. Every time I’m on a public road or see one of our public transit lines expand I think about how my money helped build that for myself and the community. This feeling is heightened when I learned that a 4 lane highway costs over $1 million PER MILE to build. Wowza. That’s a lot of cheddar.
So what’s the reframing I’m talking about? I realized that I spend more on taxes than I do on myself annually. This year I will pay a little over $20,000 in taxes (Federal + FICA) and spend between $18,000-$20,000. Taxes are my highest expense. I never realized that and thought it added an interesting twist to my thinking.
Realizing that I give the government more than I spend annually (and this doesn’t even include the state and city tax we used to pay!) made me have even more conviction that if I am in a position to legally benefit from a system I paid into I should do it. This line of thinking goes back to my time in Manhattan. I was laid off after making $48,000 a year. My Mom suggested I apply for unemployment benefits, which I’d never even thought about (I was a BabyAdult, only 2 years out of college).
When I told my partner what My Mom suggested he said I shouldn’t apply and that it was immoral, which surprised me. I asked why and he said “Because you have an emergency fund.” He thought I shouldn’t take the money because I had prepared for this possibility in the volatile ad agency world. He wanted me to leave that money there for people that he said “really needed it” – which I took to mean people that didn’t or couldn’t save an emergency fund.
I applied for unemployment anyway. It’s supposed to be there for me when I am laid off (not fired mind you 🙂 ). I pay into it with every paycheck. Who is my partner or I to decide who does or doesn’t deserve it? I’m following the letter of the law.
Interestingly when I was laid off again 2 years ago (seeing a pattern? Oh ad agencies 🙂 ) I took unemployment benefits again and my partner told me he had changed his mind. He had thought about what I said in New York – that I’ve been paying into this system and am following the law – and sided with me.
There are some people on reddit/r/financialindependence that worry that retiring early is somehow immoral, but I don’t see it that way (however I might be biased…). I’m not taking anything from society or draining government program spending. In fact, I might even go as far as to argue I’m helping society by freeing up a job, providing my time as a volunteer and (eventually) leaving all my money to charity. But I’ll keep thinking about the question while gazing at a tax bill that is more than I spend in a year 🙂 .
UPDATE: If you’re interested in the morality of early retirement
Welcome to being public, I was a lurker for years too!
I fondly remember that first time we paid more in taxes than we spent. Dual income, no kids, and in the income tax state of Georgia. Neither of our salaries were outstanding, but we paid over $50,000 in taxes between federal, state, and FICA.
If I ever get an ACA subsidy, I won’t feel bad
Oh wow – I didn’t know that. I’m glad I’m not the only one! And that’s really cool that you noticed the milestone! And totally on ACA – I’m with you.
The idea that one should not collect unemployment because of having an emergency fund is confusing to me. I mean, why else pay into it? So it can be used by people who don’t earn enough to save (forgivable to a limited extent) and people who are too irresponsible to save?
It was confusing to me too 🙂 , but yes your explanation is what we were originally talking about – that I obviously disagreed with. The logic wasn’t sound – that’s why he changed his mind down the line.