“Taxes? How could I possibly be thankful for taxes?” you’re probably wondering after reading the title of this article.
Personally, I don’t have a strong viewpoint on taxes yet. As a young Economics major, I’ve studied how taxes are a balancing act between efficiency and equality. Taxes reduce the efficiency of the economy by creating deadweight loss; but at the same time, taxes pay for things that help maintain socioeconomic equality throughout the nation. We want both of these things, but efficiency requires fewer taxes and equality requires more taxes. So the real question is, which takes precedence?
While I may not have the answer to that question, it’s easy to forget why so much money goes to taxation -- we cringe at how much of our paycheck is deducted and wonder why the government is taking “all” of our money. And yes, the government does sometimes misallocate its revenue that it receives from us, leading many Americans discouraged and untrusting of the government. However, taxes provide so many societal benefits that we should remind ourselves to be thankful for. Here are the 5 major areas that taxes goes towards in American society:
1. Social Security
Essentially, social security prevents poverty in older generations. It helps the older generations after they retire, helps people who become disabled, and helps families when a spouse/parent dies. While a person is employed, part of his/her paycheck is withheld in the form of FICA taxes. Then, once that person retires or becomes disabled, he/she receives funds from the Social Security program. The funds beneficiaries receive are not intended to replace other savings, but they lessen the burden of not receiving regular income.
Fun fact: The Social Security Administration is one of the most efficient sectors of the federal government; for each Social Security tax dollar you spend, the administration spends less than one penny to manage the program.
2. Medicare and Health
Medicare provides insurance to people to prevent overwhelming hospital and medical expenses. For those of you who have never had medical expenses, receiving medical care is incredibly expensive, especially for older generations who have more regular health issues. Without Medicare, insurance premiums would be 3x as expensive as they are now, and seniors would have no guarantee of coverage. So not only does paying taxes for Medicare assist people in paying for expenses that save their lives, but it also puts the recipients’ minds at ease when going through medical trauma.
3. Military
Military spending is a bit of a controversial subject in regards to how much we should be spending. Regardless, money going towards the military is necessary and beneficial. The military protects us from both domestic conflicts as well as international conflicts, and if we didn’t use our taxes to help pay for that, then our military wouldn’t be as advanced and effective as it is today. Essentially, taxes that go towards the military are our way of paying for our protection.
4. Education
Education is essential for a successful country. Tax dollars that go towards education make sure that you and your children are able to become educated and get a well-paying job in the future. Without education, many of us wouldn’t be where we are today; instead, we’d be living in poverty and would have no way of breaking out of it. Education provides important opportunities that increase people’s welfare.
5. Housing and Community
Do you think the fire department is a necessary? Do you like well-maintained roads? Well, say thank you to taxes, because they provide us with these kinds of things. Paying taxes is basically like paying to live in a liveable community; and without those taxes, we would have little to no maintenance of our societies. If someone’s house catches on fire, the neighbors would have to run to get buckets of water to help save the property, but it would unlikely be a big enough effort to contain that fire.
Of course, there are many other categories that our taxes go towards, such as international affairs, transportation, and energy. In order to live the way that we do, we’re going to have to pay taxes to ensure protections against retirement/unemployment, health expenses, dangerous threats, etc. We are a part of a community, therefore, it is our duty to contribute to its success and stability. I understand that taxes are not fun to pay, and there is some inefficiencies and corruption within the system, but they do a lot of good things for us too that sometimes we just need to be reminded about.
