As we talk about heading into recession, and as we hear more and more wind about socialized healthcare, I feel compelled to lay out my perspective on some things.
First, let's look at the track record of services when we hand over the power and control to a government run program.
Anytime someone mentions nationalized healthcare I ask them when was the last time they went to the DMV. It's always an ordeal when we go to the DMV. Why is that? Because there's no motivation to compete. When I cater to tax clients, I do everything I can to make the experience great. We have only one chance a year to leave a great impression so they return the following year.
WE offer free drinks, free pizza, pull out their chairs for them, greet them warmly...and do as much as we can. I get so anxious when someone has to wait more than a few minutes. I know that at any moment, they can get up and leave and go down the street and get their tax return done elsewhere.
Now compare that to the DMV. If a DMV worker is scheduled for a break, GUESS WHAT, there's nothing that's going to stop them, regardless of the status of the wait in the lobby.
The DMV is really nothing. Let's talk some real big money issues like social security. Social Security is something that burns me up. Between Social Security and Medicare, for a self-employed person, we're talking 15% of your income. Regardless of employee/self-employed status, it costs us 15%. If you're an employee, those are expenses are paid for and on behalf of the employees employment...in other words, an expense that could have been paid directly to the employee. They're also known as foregone wages.
Imagine, if you could take 15% of your income and save and invest it. If you've ever studied the time value of money you'd know how great that 15% could be. If you were to max out a ROTH IRA, which is $4,000 a year, and added to it for 30 years, you'd end up with about 3/4 of a million dollars at retirement. That's assuming a 10% return on the money. Which is a pretty safe number considering the stock market averages 12%. We're talking low risk investments.
Fifteen percent of how much income equals $4,000? Do the math and you get $26,667. Not a huge amount. We're forced to invest 15% into this system. And how is that system doing these days?
Not so good. High Risk, with low returns.
So, when you hear your friends say: "That would be nice to have healthcare for everyone."
Just ask them: "When was the last time you were at the DMV?"
Remind them that it's a long wait for very poor service. Exactly what we'd get with gov't run healthcare. AND Look at what they've done with our retirement planning, Social Security.
It's not all that secure, and the burden will continue to be pressed on the working generation, along with my children, and their children.
Who can blame the baby boomers? They've paid in all of their lives, so it's time they get what they're due. Problem is we've given the power and control to the gov't and politicians in Washington to control 15% of our earnings and all they've done was squander it rather than invest it wisely.
AS those boomers call in what's due to them, guess who will have to pay for it? Yup, my generation, and my children and my grand-children.
I hate to sound bleak, but it ain't looking so pretty. And if healthcare for everyone is going to solve anything, I hate to disagree, it's just going to send us further down that road to oppression. As they take control of more and more of our money, all I think that will happen is more squander. So, it all started with a very small percentage of tax on income before the civil war, and on only those that were considered the wealthiest of the wealthy. Now it's 15% for social security, 25% to income tax, 5% to state income tax, plus all of the sales taxes and use taxes we pay for everything else we buy.
The horizon only looks more bleak. So, my advice is, do what you've got to do, but do it legally.
So why do you think I've taken such a keen interest in taxes?