Yes, I know that today is not the deadline for filing federal and most state income tax returns and for paying taxes owed, if any. Still, the mere mention of April 15 probably still sends shudders down the spines of some people, like a Pavlovian response.
When I worked for the Baltimore Orioles, one young co-worker not only claimed zero allowances, but had additional federal income tax withheld from every paycheck. When I told her that she was loaning money to the government interest-free, money that she could be saving and possibly investing, her response was that her excess tax payments were the only way she could save. Of course, when I asked her how she was saving those tax refunds, she replied–after a pause–that she usually spent them on clothes and entertainment.
Although some states are requiring financial education as part of school curricula, every survey conducted of the financial knowledge of US citizens still shows enormous ignorance. This article outlines “10 Eye-Opening Financial Literacy Statistics.” Although some of the data reported is more judgmental than hard data, in my opinion (for example, 53% of adults are financially anxious), one statistic was hard to ignore: four in five youths failed a financial literacy quiz. Obviously, some people learn about finances as they grow older, but such a state of affairs puts all of us behind the 8-ball. (How much am I showing my age with that phrase?!)
I don’t think too many people reading my blog have young children, but if you are a parent of same please do all you can to make sure your kids understand basic money concepts.
Is common sense creeping back into American academia? This post from Why Evolution Is True reports that Harvard University is starting a new faculty council to promote academic freedom. From the council’s website via WEIT:
Harvard ranks 170th out of 203 colleges in FIRE’s Free Speech Rankings, and we know of cases of disinvitation, sanctioning, harassment, public shaming, and threats of firing and boycotts for the expression of disfavored opinions. More than half our students say they are uncomfortable expressing views on controversial issues in class.
I also thought this passage was very relevant: “…the paragraph beginning “The counter-intuitiveness of academic freedom is easily reinforced by several campus dynamics”, which goes on to explain why a small group of loud activists can take power over an academic institution whose members are, by and large, in disagreement with the activists, but afraid to speak up.” I, and many others, would label such a phenomenon as tyranny of the minority.
My “car guy” returned my Maserati yesterday afternoon. (Thanks, Stephen.) He seemed quite sincere when he told me the car rides well and is in much better mechanical condition than he imagined it would be for a 13-year old Italian “exotic” purchased at an auction.
All that being said, he reinforced what I already knew: the Maserati will not be a low-maintenance car. He said, “with these cars, trying to save $1,000-$2,000 now can cost you $10,000-$20,000 later.” Of course, all cars need preventative maintenance, but such maintenance is much more expensive for a Maserati than for a Chevrolet, or even for a Mustang GT.
He also mentioned that he knows a great interior restorer, the Maserati interior needs a lot of work, and that he would send pictures in order to get an estimate. Basically, this restorer can bring back the interior with a deep clean and dye job, and not by actually replacing the upholstery. In the interest of being objective, here are some photos of the interior. I apologize if these are not of high quality, but I took them at 4:40 AM today in low light conditions in the garage:
If the estimate comes in at $1,000-$2,000 then I will have the work done. If the estimate is $5,000-$6,000, then it will have to wait. I still have to spend another $1,000-ish on rear tires in the next 3-4 months. I have to admit, though, that part of me likes the interior wear. It shows the car has a history, that it’s been driven.
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10 thoughts on “Tax Day”
When you ask most folks how much they make per hour/week/month, most will tell of their gross income, not the net after all deductions. Rarely will most even look at the various deductions. If they were self employed and had to pay estimated taxes quarterly, many would rise up in arms. Same if they had to pay the full amount on “Tax day”. It’s even more rare that folks know their total tax burden. I just got in the mail my estimated property taxes for my rentals and my home. Not surprisingly all have gone up, a not insignificant amount either. I can however at least “freeze” the taxes on my home due to my age this year.
The interior doesn’t look too shabby on the Maserati. It does need some leather treatment, but that’s pretty easy and relatively inexpensive fix.
Ignorance is not bliss, but many people are not exactly informed. That was about as polite as I could be.
The interior looks much worse than shown in the photos. Besides, “Maserati” and “inexpensive” are mutually exclusive concepts.
People have to be taught financial knowledge; that’s why one of the most successful financial books is “Rich Dad Poor Dad”, which shows the difference in approaches by people with different financial approaches.
Every Christmas my daughters get financially orientated books, and I guide them to similarly oriented websites/podcasts. As a result, one already has a five figure 401K and they both are buying houses. As the saying goes, “Common sense ain’t all that common…”
Thanks, Doc. You are doing well by your daughters, but you are also helping more people.
There is little emphasis on practical financial knowledge in schools. I have often advocated to parents that some basic high school business classes are worthwhile, but students would be far better served by personal finance classes.
Thanks, JS. I am going to step in it now…I believe teachers unions don’t want to teach financial classes because more kids will end up as free-market advocates, lean more to the right politically and be anti-union. My 2¢.
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Having taught in a “red state” for 33 years, I can’t speak to other state teacher unions, but I can tell you that the North Dakota Teacher’s Union is not at all powerful. They are enjoined from striking, and likely wouldn’t anyway, because as a group, the members are relatively conservative.
I only mention this as teacher unions around the country, I believe, reflect strongly the state in which they reside, even though all of them belong to either of two national unions as well.
Thanks, JS. Of course, teacher unions, in part, reflect the state in which they reside, but the national unions are very far from being politically neutral.
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When dealing with taxes and especially the IRS, it is important to know all of the rules and then play by the rules. By knowing the rules I mean, know all that you can so you can use every rule to make sure you do NOT pay too much. I made sure that both of my children learned how to do their own taxes early so they would know exactly what the government was extracting from them. Both of them are financially smart as are their spouses. Thank you Lord for that blessing. When I owned my own engineering firm I did my own taxes and learned the rules so that I could claim every deduction possible for my business as well as my wife’s piano teaching business. With our investments I no longer file our returns ourselves but use an accountant; BUT we make sure he has all of the information needed to minimize the dollars extracted from our income. Know all of the rules and then play by the rules.
I shall refrain from commenting on teacher unions, just know that I completely agree with you.
As far as teachers, one of the best professors I had in engineering college was Dr. Tommy Thompson, my Engineering Econ professor. During the semester, he broke from the syllabus and took one whole class session to teach us about buying real estate even down to explaining the legal property description. He said it was an important part of our education and that we probably wouldn’t learn the knowledge in any other college class. Dr. Tommy was a real gem of a teacher. Hard of hearing from his WWII submarine service but a great teacher and listener. Sadly, there are no longer professors like him.
Many thanks for sharing, Philip, especially the paragraph about Tommy Thompson. A difference exists between tax avoidance, which is legal, and tax evasion, which is not.
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