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Financial Literacy

Financial Literacy


When discussing taxes, there’s a central question that revolves around what’s fair. Let’s say your dad is an independent trucker. He works his tail off 90 hours a week to send you to college and to provide you with a nice home, food and piano lessons. On the top half of his income, he pays a lot more taxes than your next door neighbor who works just 30 hours a week. And they don’t even have a piano.

Is it fair to stick your dad - who works all of those extra hours for you - with a much bigger tax burden than your neighbor? Should he be penalized for trying to make your life better?

And while we’re on the topic of fairness: what about lard? Yes, you read correctly: lard. Fat.

Night after night, you watch the same TV commercials for greasy burgers and ice cream that conveniently come on at around 10:30 pm when your stomach is growling like the neighbor’s terrier. (Who knew that dog was such an ice cream fanatic?) But you use your will-power to ignore the delicious-sounding messages; you eat an apple and go to sleep. Your cousin across town, however, zips out to Lard Hut and orders a Double LardBurger with Cheese. With fries. And a shake. (And he’s not an Olympic swimmer burning 11,000 calories a day. In fact, we’re pretty sure your cos’ would sink almost immediately.)

So you two have about the same height and body structure, only you weigh 170 pounds and your cousin weighs over 300. The odds of him suffering severe diabetes in the next 20 years are high. The statistical average for you is that your health care will cost $3,000; the average expected cost of your cousin is $30,000.

Why should you have to pay the same health care costs as your cousin, who has no dietary discipline or work-out ethic? Fair?

Wal-Mart didn’t think so… so it started charging obese employees more for their health insurance than healthy ones, which caused a great outcry in the press. It was commonly cited that “some people have glandular illnesses and have a high propensity to put on weight.” Well, yes, some do – but that accounts for maybe 1 in 10,000 obese people in this country. Even if about 1 in 10 claim to have that problem. So, yes, if you can medically show that you have the propensity, maybe it’s fair that you shouldn’t have a fat-tax attached to your bill.

Ok, so you’re sitting there thinking about the trade-off between what’s fair and what isn’t when you are asking people to hand over their own money to the government to fund different programs like Medicare and Social Security and health insurance. And you know that if we (the People of the United States of America) want to keep creating more and more social programs, we will eventually (definitely) have to raise taxes, because otherwise WE DON’T HAVE ENOUGH MONEY.

In Bahrain (oil money, rich country), they don’t worry about this stuff. They have lots of gushing oil pumps, and every citizen gets pretty much whatever they want. But we’re not Bahrain. If only more dinosaurs had died below our fields of green.

So we have seen that when you raise taxes on people who are working the hardest in your society, it squelches their desire to keep working so hard because there’s less of a payoff for doing so. If that happens to enough of the best and brightest workers in the country, the economy will start to slow down (less money in people’s pockets, less stuff being produced). Paging Ayn Rand…

If the economy slows down enough, dad might lose his job. You might lose yours (that boring one at the pizzeria that still allows you to be gloriously independent). You might not even have the money you need for college anymore. Whoa. When did the lights start going out?

On the country’s present course, raising taxes seems inevitable. Unless - dare we say it - we (the People) “just say no.” (Ooh – that phrase would look awfully good on a T-shirt…) Maybe we just can’t take care of everybody with other people’s money. Maybe we have to put down the Double LardBurger with Cheese. It isn’t about morality, it’s about dollars and sense.

If we say no to raising taxes, if we slim down our huge national deficit (the amount of money that the country has borrowed to spend on Government programs we don’t actually have the money to pay for), we might encourage more entrepreneurs to startup companies, we might see more people start working again, we might encourage people to believe in that American dream again where anybody who works hard enough can become wealthy. In theory, it seems like common sense, doesn’t it? Sadly, “common sense” isn’t as common as it should be, which is a (Thomas) pain in America’s side.

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