Hallelujah, I Have to Pay Taxes!

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Hallelujah I Have to Pay Taxes

Tax Day has arrived in the U.S.  The closer it got, the greater the gloom you could feel descending over people.  You see, many were struggling with the fact that they were going to have to write down and acknowledge how much they made last year, how much they took home … and how much they had to pay in taxes.  No more room for denial.

We face lots of resistance when it comes to being honest with our money.  Most of us prefer the woolly estimates we have in our heads based on the story we tell ourselves about our financial situation.  But that’s a discussion for another day.

Today we’re going to celebrate the fact that we need to pay taxes at all.  While we’re at it, let’s celebrate the fact that we have to pay a lot, if that’s the case … because the more we have to pay, the more we’ve earned.  (I’m assuming you used every legal means to minimize what you paid; there’s nothing patriotic about paying more than required.)

What makes me such a contrarian?  First of all, we live in a country that, despite its current contortions, is bountiful and ripe with opportunity compared with many others.  (Granted, several countries today are nipping at our heels …)  The underpinnings of such a place need to be paid for somehow.  Hence, we pay taxes.  But beyond that, think of the alternative:

If you did not have to pay anything to the tax man, it would mean you earned so little from all the various sources (earned income, interest, dividends, etc.) that—after deductions—you were virtually at zero.  That is not a place anyone would choose to be.

Does More Money Mean More Happiness?

Here’s an interesting fact, though:  if you earned that little, it would mean that with every additional dollar you earn, your happiness would increase.  However, that doesn’t hold true for all income levels.  How’s that?  Well, a 2010 study by Kahneman and Deaton shows that until you reach a level of around $75,000 in annual household income, your happiness increases with your income because you are able to cover more and more of your basic needs.

Why does that only hold to $75,000?  One theory is that once all our basic needs are met, somewhere in that $75,000 range, our spending patterns change.  We don’t freeze our lifestyle costs and bask in the peace of mind that comes from having excess income.

Instead, we start escalating the cost of where we live by changing neighborhoods and “moving up.”  We change how we dress and maybe where we buy our clothes.  We change how we eat, straying from our cautious buying patterns and filling our grocery carts with “wants” rather than needs.

What happens after that?  Here’s the slippery part:  unless we have a very healthy relationship with our money, we will increase our expenditures to match or exceed our income.

Our secret purpose is to keep ourselves in a comfortable psychological place.  If what is familiar is being under tremendous financial duress, we’ll keep ourselves there.  If we don’t feel we deserve the joy of financial security, we’ll be sure we don’t have it.

My Tax Day Wish For You

So here’s what I wish for you.  As Tax Day comes and goes, I wish for you that you’ve blown past that $75,000 threshold with the priceless clarity of what money means to you and what it does for you.

I wish that every extra dollar you had to pay the tax man reflected even more dollars set aside someplace safe.  I wish you the drive and the discipline to save enough to ensure many, many years of the financial security and peace of mind you deserve!

Happy Tax Day!

Let me know in the Comments section below if you think I have a real Pollyanna outlook on how and why we pay taxes!

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Bio: Sharon O’Day combines a long, successful career in international trade development, an MBA from the Wharton School and a lifetime of personal peaks and valleys to be an effective tell-it-like-it-is money mentor to women who are willing to do what it takes to be financially secure for the rest of their lives!

  • HorsingAround InLA

    My taxes are filed. Now just waiting for my return to show up! Thanks for sharing, thats so true about income and pepoles wants and needs in relationship to what they make. I didn’t know that $75,000 was the thresehold for that though! Interesting!

    • Returns are good, Erin, especially as a short-term “forced” savings account, unless they’re too large. In that case, they become the equivalent of making an interest-free loan to the government.

  • What a fabulously positive approach to paying taxes Sharon! A breath of fresh air!

    • I can see you shaking your head, Carolyn … “where did Sharon go to pull THIS one out?”

  • What a powerful message! Yes, yes, yes! I pay taxes and am proud of it! As usual, great post!

    • There IS power in understanding and appreciating our money, Martha …

  • I love your message, Sharon! It’s a much healthier approach to paying taxes! Thank you!

  • haha! Love it! I am thankful I have to pay taxes!

    • Must mean you’re making money, Angie, and that can’t be bad!

  • Shari

    I like this approach, Sharon. It’s an empowering one. Thanks for sharing this.

  • This is different, I have never been to a blog where people are so happy to pay taxes. Usually you hear people complaining about it all over the internet.

    • Kelly, we can disagree about how our taxes are being spent and if we’re paying too much or too little. But keeping the gears of this country oiled does cost money. Besides, you’d have to admit that if we’re paying, we’re earning … 😉

  • I love this great attitude!

    • It’s actually pretty empowering, isn’t it, MarVeena? 😉

  • Tom Holmberg

    Love your sentiment. I think in Southern California the math is a little different, you have to make over 100K before loose the incremental joys of +1$. I love paying taxes, that means I have a job and supporting myself.

    • Glad to see you feel the same way I do, Tom. And with all the extra taxes in California, $100K wouldn’t surprise me one bit!

  • Meryl Beck

    Great message Sharon! being “lucky enough” to pay taxes is indeed a wonderful thing. Your outlook is awesome and not too Pollyannaish!

    • Sure beats the alternative, doesn’t it, Meryl? It’s so easy to get sucked into the negative vibes around money but I don’t see where that does anyone any good. There truly IS a positive aspect … 😉

  • Sharon, I LOVE your attitude to taxes!! Here in Canada, tax day is April 30 but I get it done before then. You are so right, we are very blessed when we have to pay taxes. : D

    • Whether we like what they do with our money or not, Sherie, the fact that we owe taxes directly reflects how well we’re doing …

  • I find that so interesting that it tops at $75,000, but I can see the point. We think great wealth will make us happy, sometimes it does and sometimes it causes undo problems. Happy tax day to you!

    • Cathy, the calculation was that at $75K, more or less, all basic needs were met. Needs, not wants. And meeting each one brings incremental happiness. What we do beyond that point is where we get to decide how we allocate our additional money … and how happy that makes us feel.

  • Norma Doiron

    Tee-heee…. great attitude, Sharon! Love it. I have yet to submit mine but very close! Great post… 🙂

    • Ah, I love being the contrarian. Especially when I believe it! 😉

  • lol I love that attitude! If you were not doing well you won’t owe! 😉

  • It is so fabulous to have such a great attitude about taxes. We always have ours done ahead of time and always get a lot of money back at this time of the year because we seem to give the government a free loan so I love seeing the cash roll in!:-)

    • With interest rates held artificially below 1%, that’s fine as a painless savings account. But if they go up too much, Daniele, that’s a costly “free loan” … 😉

  • Yes I think we need to get over it and get on with it

  • Freedom – Money – Responsibility

  • I agree Sharon – when we have to pay taxes it should feel more like a celebration because it is an indication of the full amount we earned in the year… We live in a world where taxes are a part of our social structure.

  • I like your attitude, Sharon! Happy tax day!

  • Yes, Sharon, you do have a great attitude about paying taxes and money. Yes, it should be a goal of every USA citizen to pay taxes after being wise about legal deductions. Attitude about money is so important no matter how much a person has.

    • Pat, life has a way of throwing “stuff” at us … all of us … and, yes, our attitude about money plays a big role in how successfully we deal with it.

  • LOVE your title! So much wisdom, here, Sharon and fun to read. Thanks for sharing.

    • And thank YOU for stopping by to read, Lisa; your kind words are music to my ears. Hmmm, who ever thought the words “taxes” and “fun” would be on the same page? … 😉

  • Sonny

    I was also thrilled to pay taxes. That means more money in my pocket throughout the year. I must be doing something right!

    • You obviously are doing something right, Sonny. Congratulations on being among the few with enough vision to understand that if you’re paying taxes, that means you’re making money!