Six Reasons to Get Excited about Paying Taxes This Year
Friday, April 12th, 2019
Are you ready for Tax Day or will you be getting an extension this year? Don’t feel bad about extending. More people than ever will extend this year as we work to digest the new tax law.
We all hate paying taxes. There is something about giving money to an entity that you have little control over that takes the joy out of writing those checks.
But, take heart. There are many reasons to find joy as you write your checks to Uncle Sam this year. Consider this an exercise in positive thinking. I’m struggling, too!
Here are my top six reasons to get excited about paying your taxes.
1 – You made money.
Only those people who are blessed enough to have made a reasonable income are pay taxes. In fact, 45% of Americans pay no income taxes. If you are writing a check this year, you made more money than 45% of America. That is something to get excited about.
Are you paying more in taxes this year than last? Do you know what paying more in taxes is a sign of? Making more money.
2 – You Probably Paid Less This Year
Thanks to a completely revised tax code, most Americans will pay less in taxes on money they made in 2018. The average American will send $1,400 less of their hard-earned money to Washington. A family of four will send $2,900 less.
Did your refund take a hit this year? Lots of Americans are used to getting a tax refund this time of year and many were surprised by a lower than usual tax refund. Here is what probably happened. When the tax rates decrease, the withholding tables changed.
Less money was withheld from your paycheck for taxes and you spent it. Don’t feel bad, I did, too. Our lives can always consume a little more money without noticing it. So, even though your tax bill went down you will get a lower refund because less taxes were withheld from your paycheck.
Here is the solution. If you want your old refund back, go to your employer and change your withholding. Have them take a little more out of each paycheck. Just like you didn’t notice the extra money you were taking home, taking a little less home each paycheck won’t hurt too bad.
3 – America Is A Bargain
According to the Tax Policy Center, Americans pay around 26% of our gross domestic product toward taxes at all levels of government. That is 8% lower than the average paid by the 34 countries in the Organization for Economic Co-Operation and Development. There are only four countries out of the 34 that pay less than us.
Denmark and France pay over 45%! We do pay a lot in taxes, but much less than many other countries.
Did you know that Denmark, Norway, Iceland and the Netherlands are ranked the happiest countries in the world? They all pay more in taxes than we do and found something to be happy about.
4 – Our Taxes are Historically Low
During World War II, the top tax bracket was at 94%! Our current top rate is 37%. Quite the bargain!
When you look at historical tax rates and our bulging national debt, we should all really be looking at Roth IRAs. Long term, I don’t think tax rates are going down…
5 – Good is Coming of Our Taxes
It is difficult not to focus on the waste of our tax dollars. But, a lot of good comes from our taxes. Roads are paved, fires are put out, children are educated, our streets are made safer and the less fortunate are fed and housed. Our American world is a much kinder and gentler place than many countries who do not have the gross domestic product to support our levels of spending.
Yes, money is wasted. We can and should be better stewards of our tax dollars, but a lot of good comes from what we pay.
6 – We Are Rich
After adjusting for cost of living differences the average American earns an income that is 10x the world average. To break into the top 10% of world earners, an American needs to make a little over $60,000.
We all feel broke, but by world standards most of us are very rich – even after taxes.
Now, go say a little prayer of thanks as you write that check to Uncle Sam!