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Ok. So what you're saying is that you have a profession which has long dry periods in between lucrative jobs. Also, that you don't have the planning skills to

Ok. So what you're saying is that you have a profession which has long dry periods in between lucrative jobs. Also, that you don't have the planning skills to have enough in the bank to feed your family if things don't work out, and you have a longer period between jobs. So, you skip out on legal obligations (you know, paying taxes...) in order to make ends meet. I'm saying that instead you take a pragmatic view of things, you pay your taxes, avoid jail time, and further ruin later (fines, interest, etc). Build up more of a cushion of savings, since obviously you can't count on your income. And consider the idea that maybe you should get temporary jobs to NOT STARVE if it comes to that. Basically, our disagreement here is that you think that the money is yours the whole time, and that taxes are a separate bill, which you then don't plan ahead for. I propose that the money you set aside for taxes is no longer yours, it's in your keeping, but you are legally obligated to pay it (probably quarterly) to the government, in order to pay for all the societal benefits taxes provide (whole other argument). I get annoyed that you make a ton of money (on the order of $100k), have the foresight to put aside the money for taxes, and then ... "whoops, I spent it all", and complain that you don't have enough to pay your taxes. You have a family sure, and a hard to predict job, but come on, you make way more than enough to feed them, and clothe them, and even pay for piano lessons. All while paying taxes.

DanielBMarkham 18y ago
Basically, our disagreement here is that you think that the money is yours the whole time, and that taxes are a separate bill Yes. As a free and individual sovereign person I feel as if I own the money that I earn and I own the political power that I was born with. I choose to apply both of those assets to the best of my ability. I expect others to do the same. Our government was founded on a tax revolt. Remember "no taxation without representation"? We, the people, are the original holders of money and power. Nobody else. If we reach a state where, god forbid, we are being taxed for more things we do not allocate our political power for, then -- something will happen. People will leave, new leaders will be elected, there will be a balanced budget amendment -- something. And if everybody had to write out those multi-thousand-dollar checks every quarter, there would be a lot more scrutiny than there is today. And the day I let the government decide whether/where I should be working, in absence of a war, is the day that I stop being a voluntary citizen. I find it interesting that your argument basically consists of impeaching your opposition (me). I'd argue that no amount of planning can eliminate the problem I've outlined. If planning could account for all economic conditions, how did the banks get where they are today? How come economists can't predict the economy four years out? I've had gigs that ran week-to-week for over a year and ended suddenly. If you've got some magic pixie dust that lets you plan a year out, I'd love to have some. So yes, continue slamming me for the failure of your model to include reality. I'm a poor planner, I'm selfish, I have a bad attitude. One imagines the list is endless. Perhaps I am not a patriot as well? Who needs logic when simple ad hominem attacks work so well. (And it is ad hominem for instead of acknowledging that I am simply presenting a case for your consideration, you've focused this conversation on your personal opinion of my finances, morality, and planning -- none of which changes the nature of the debate and the only goal of which is to insulate yourself from thinking through this) Even if you are right, if people are naturally poor planners and selfish, etc, you still have to account for the fact that the system doesn't work. But you don't want to go there. You'd rather talk about how bad the people are. Since this is where you've taken us, I think it's a good time to bow out.
- slpsys 18y ago
  Uh, I'm 100% not going to resort to ad-hominem attacks, but I don't think that, knowing that you are aware of the current state of taxes and fail to plan for them, I don't think you'll find a person on this board who thinks you're anything but a poor planner.
  - DanielBMarkham 18y ago
    You're a new commenter to this thread, so I will try this again. Perhaps I've been poor at explaining it. You're self employed. Let's say you sell services. It's the first week of the year. The first week you did great. Let's say you made $5,000. Woo hoo! But wait, you say, part of that money isn't really yours. So what do you pay? Do you multiply 5K by 52 weeks in the year to assume an income? That's how most people's payroll taxes are done. So let's say you do that and immediately write a check for 1800 bucks for taxes. Then you make nothing else the rest of the year. You've lost use of that money and you really needed it. Wrong answer. Let's try again. Let's say you put it in the bank. Now you make another 5K. And another and another. After a month you've made 20K. 6K of that is in the bank. Then there's no work for a month or two. At the end of the quarter, you've got 6K in the bank for taxes. Do you write the check? Well -- what's your income going to be? You haven't made anything in two months. So you don't write the check. Then the next quarter you work every week. Wrong answer. Or you write the check, and there's no more work for two months. Wrong answer. Or you write the check and need a new server. Or you don't write the check and need the money. Or you get hit with another large business expense. Or somebody goes to the hospital. The randomness goes on and on, and without knowledge of just how your income is going to work for each week for the next year you're guessing at optimization strategies. Note that some of these unplanned expenses are tax-deductible events -- these are items you would take off from your income before taxes anyway. Some, of course, are not. Allocating the money immediately doesn't work because there's no set amount to allocate without a predictable tax bill to prorate. Saving the money results in various scenarios where the savings conflict with other business realities and you've still got the prediction problem. The most reasonable strategy that I can create is to pay some kind of guess and then catch up the following year -- after all, you always know what your taxes are for the previous year. But the fact remains that the tax system is made for people with predictable income where the employer takes the money out of their checks. And as the economy gets more diversified and more and more people run their own businesses, this assumption causes more and more problems. I think calling all of that "poor planning" is a bit oversimplified.

DanielBMarkham 18y ago

Basically, our disagreement here is that you think that the money is yours the whole time, and that taxes are a separate bill Yes. As a free and individual sovereign person I feel as if I own the money that I earn and I own the political power that I was born with. I choose to apply both of those assets to the best of my ability. I expect others to do the same. Our government was founded on a tax revolt. Remember "no taxation without representation"? We, the people, are the original holders of money and power. Nobody else. If we reach a state where, god forbid, we are being taxed for more things we do not allocate our political power for, then -- something will happen. People will leave, new leaders will be elected, there will be a balanced budget amendment -- something. And if everybody had to write out those multi-thousand-dollar checks every quarter, there would be a lot more scrutiny than there is today. And the day I let the government decide whether/where I should be working, in absence of a war, is the day that I stop being a voluntary citizen. I find it interesting that your argument basically consists of impeaching your opposition (me). I'd argue that no amount of planning can eliminate the problem I've outlined. If planning could account for all economic conditions, how did the banks get where they are today? How come economists can't predict the economy four years out? I've had gigs that ran week-to-week for over a year and ended suddenly. If you've got some magic pixie dust that lets you plan a year out, I'd love to have some. So yes, continue slamming me for the failure of your model to include reality. I'm a poor planner, I'm selfish, I have a bad attitude. One imagines the list is endless. Perhaps I am not a patriot as well? Who needs logic when simple ad hominem attacks work so well. (And it is ad hominem for instead of acknowledging that I am simply presenting a case for your consideration, you've focused this conversation on your personal opinion of my finances, morality, and planning -- none of which changes the nature of the debate and the only goal of which is to insulate yourself from thinking through this) Even if you are right, if people are naturally poor planners and selfish, etc, you still have to account for the fact that the system doesn't work. But you don't want to go there. You'd rather talk about how bad the people are. Since this is where you've taken us, I think it's a good time to bow out.

slpsys 18y ago
Uh, I'm 100% not going to resort to ad-hominem attacks, but I don't think that, knowing that you are aware of the current state of taxes and fail to plan for them, I don't think you'll find a person on this board who thinks you're anything but a poor planner.
- DanielBMarkham 18y ago
  You're a new commenter to this thread, so I will try this again. Perhaps I've been poor at explaining it. You're self employed. Let's say you sell services. It's the first week of the year. The first week you did great. Let's say you made $5,000. Woo hoo! But wait, you say, part of that money isn't really yours. So what do you pay? Do you multiply 5K by 52 weeks in the year to assume an income? That's how most people's payroll taxes are done. So let's say you do that and immediately write a check for 1800 bucks for taxes. Then you make nothing else the rest of the year. You've lost use of that money and you really needed it. Wrong answer. Let's try again. Let's say you put it in the bank. Now you make another 5K. And another and another. After a month you've made 20K. 6K of that is in the bank. Then there's no work for a month or two. At the end of the quarter, you've got 6K in the bank for taxes. Do you write the check? Well -- what's your income going to be? You haven't made anything in two months. So you don't write the check. Then the next quarter you work every week. Wrong answer. Or you write the check, and there's no more work for two months. Wrong answer. Or you write the check and need a new server. Or you don't write the check and need the money. Or you get hit with another large business expense. Or somebody goes to the hospital. The randomness goes on and on, and without knowledge of just how your income is going to work for each week for the next year you're guessing at optimization strategies. Note that some of these unplanned expenses are tax-deductible events -- these are items you would take off from your income before taxes anyway. Some, of course, are not. Allocating the money immediately doesn't work because there's no set amount to allocate without a predictable tax bill to prorate. Saving the money results in various scenarios where the savings conflict with other business realities and you've still got the prediction problem. The most reasonable strategy that I can create is to pay some kind of guess and then catch up the following year -- after all, you always know what your taxes are for the previous year. But the fact remains that the tax system is made for people with predictable income where the employer takes the money out of their checks. And as the economy gets more diversified and more and more people run their own businesses, this assumption causes more and more problems. I think calling all of that "poor planning" is a bit oversimplified.