What is it about earning more that makes people want to pay less taxes ?


What is it about earning more that makes people want to pay less taxes ? I happen to be paying a pretty steep percentage of my annual income as taxes too & I realize how I talk more about the double digit percentages of my monthly income that get happily plonked into the lap of the thing called ‘The Government’.. I never thought so much about taxes when I earned half or less of what I earn today. I’d be very interested to understand the behavioral economics of tax payments..pass them on to me… Maybe indirect taxes on richer luxuries like big cars,fancy restaurants, fancier wines, perfumes, jewellery are a good way to mint some moolah for Government.. But then again, our intelligent friends with good pay will find a way to never cough up those indirect taxes.. After all , the intellect that earns you so much, can also be used to prevent the Government from earning anything ;-)… I find it funny when people who earn multiples of what is essential for a good life( in Indian Rupees or US Dollars or whatever currency there is), complain about taxes that still let them live a good life and save enough… I find it even funnier when people happily show inclination towards buying diamonds, enjoying parties every month at fancy restaurants and fancy clothes but make a real sad face when taxed 10% more on their pay…It tells me ‘ I dont mind shoving money down a drain but I wont spare some cash for the possibility( however remote) that the tax will benefit the society around me‘ . What’s even more disgusting is that ‘ I work hard so I deserve it’ logic that such individuals plaster over their faces…I used to think that way too..but now I find that hard to accept.. Our successes are quite a factor of our environment, the advantages our associations and relations bring to us and many other happy coincidences that we have very little control over either in terms of our capability or in terms of our ‘hard work’.. I wont take away from hardwork and intelligence.. they are important but they dont explain all of our success ( For those of you, who want to get more in-depth analysis of this.. try reading ‘ Creativity’ by Mihaly Csikszentmihalyi & ‘Outliers ‘ by Malcom Gladwell. ).. It is easy for that ‘ I am superior hence I deserve to earn more’ logic to rapidly degenerate into the kind of scams that we see so often in the world today… Behind every scamster is a mindset of ‘ how can I prove smarter than all the others’..

The pay we get is NOT an indication of our intellect or hardwork – It is an indication of the scarcity( real or artificially created) that exists for our skills…And that scarcity is thanks to the society that we live in.. The very same society that our taxes are fed into.. Ofcourse, the usage of funds generated through taxation is not very optimal.. But then, the usage is often decided by how active or inactive we are in influencing the societies we live in….Quite often, those who earn more, like a life behind their walled communities and fancy cars .. so much that they dont want to invest in time or effort to influence the systems that lead to sub-optimal use of money.. So why the anguish over paying more taxes when you are already earning more than you need and couldnt care less about what happens to the world beyond your professional and personal circles ? Or is it the thing that people like to tell themselves – ‘ I am smart and hardworking..so I earn more.. Hence I know better how money should be spent.. Why the hell should I share from what I earn so that someone else could spend it ?

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~ by exploreamaze on November 8, 2009.

3 Responses to “What is it about earning more that makes people want to pay less taxes ?”

  1. Nice theory — while I agree with most of what uve posted… I disagree strongly with the point that most people plaster their faces with the fact, I work hard so I deserve it statement — well YES when one works hard and have to pay from their A** in taxes — one expects some “Basic” stuff in return — like electricity/good roads/basic medical aid et al… Which my friend is “Non Existent” ! A telephone connection takes 3 months, a gas connection takes 6 months a damn Murder or Rape case takes Ages to reach a judgement !! What are we talking about ?? Its easy to be a “Diaspora” and make strong statements, not so when reality comes back and bites on ur a** πŸ™‚ πŸ™‚ — so here we are !! Why does anyone go thru the rigor to academically excel ? Work/slof hard ? Is it NOT for these basics ? Well if the answer is a YES — then we better live with the thought that what can’t be touched and felt ! Aint WORTH paying through the nose !! Well ur blog makes it sound like, being smart and intelligent or hardworking a crime πŸ™‚ :-).Nobody trust me nobody would want not to pay if the money that’s shelled out is put to good use. I leave now With that thought– Adios – Jai Hind !

  2. Well, at the risk of oversimplifying the situation I think we complain more when we pay more taxes because …uhm well (looking for the right words here), we PAY more taxes. It simple psychology that it hurts more when we lose more (disregarding the fact that we ended up paying more taxes because we earn more money)

  3. I have an acquaintance that is quite wealthy. He complains about the taxes that he pays. I have worked in a foreign country for many years that does not have the infrastructure that he has here in the USA. Much of that infrastructure is the direct result of government initiated and implemented projects. I suggested that he try to attain the same wealth in the other country that I know well; it wouldn’t happen.

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