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Observations: Death and Taxes

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image “Everybody’s doing it, Doing what? Paying taxes, of course!” is the title of this 1920 photo of people filling out tax forms in an Internal Revenue Service office. Underwood & Underwood Photo courtesy of the Library of Congress

It turns out I’m worth more dead than alive.

By MITCH TRAPHAGEN

I need to start sleeping with one eye open. It turns out I’m worth more dead than alive.

According to the IRS website, the vast majority of Americans will receive a tax refund this year. Judging by the signs offering instant tax refunds and hearing from our friends, I believe that. Unfortunately, my wife and I aren’t among that vast and fortunate population. Last year, I put off having our taxes done until the last minute and we had a shock waiting for us. We owed a few thousand dollars. It was the first time in either of our lives that we owed what felt to be a substantial amount of money.

We have generally (but not always) made a bit more money each year, but certainly not outrageously more money. We most definitely fall into the “vast majority of Americans” making less than $250,000 who should see their taxes fall — our income is nowhere near that quarter of a million mark. Unfortunately, as our income has slowly increased over the past decade, our deductions haven’t kept pace. We have no children, no dependents (although the thought ran through my mind that perhaps our dogs could be dressed and made to appear as small, hairy children) and, like many Floridians with a less than great sense for real estate, we are still paying for a very expensive mistake made during the bubble years. But that mistake isn’t tax-deductible and our current house was so cheap that my tax software just laughed at me and said, “Really?” when I entered in the amount of interest and taxes we paid in 2010.

After the shock of writing a check last year for taxes owed, we vowed to keep better tabs on things. Naturally, by summer, the shock had worn off and all was forgotten. Until this past weekend that is. As I entered the numbers into the tax software, the amount owed was huge. I carried on thinking that once we got to the deductions part, it would all settle into something more palatable. It didn’t. It just sat there in the upper right corner of my screen under “Federal:  Amount Owed”, a figure that could easily pay for a really nice, used, late model Ford F150. And, oh yeah, they want it next week.

I looked up from the computer screen with new eyes. Paying taxes is part of the privilege of living in the United States. In our case, I don’t blame the government; I blame us. Looking around, all I could see was stuff and more stuff. I stumbled into the living room where there was yet more stuff upon which money had been wasted. Crying out in terror, I ran out into the garage and was confronted with more stuff — so much stuff that I had to pick my way through it. Yes, that’s right, I couldn’t even run screaming because of all the stuff. Stuff that cost money; stuff that certainly wasn’t essential to our lives. Suddenly, our house wasn’t just messier than it should be, it was filled with stuff that we don’t need. We are literally drowning in stuff.

From 1994 to 2002, we had no real deductions at all — we lived on a boat that we owned outright. Somehow after moving into a house in 2002, and then into another house, and then yet another house, we had amassed a disgusting and obnoxious quantity of material goods. Living on a small boat, we couldn’t have a big screen TV and somehow we managed to survive. Why on earth did we need one in our house?  The same held true for too much (but admittedly relatively cheap) furniture and enough computer equipment to launch a satellite. It dawned on me that Michelle and I aren’t the masters of our own domain, our stuff is our master and it lords its power over us with an evil chuckle born from the secure knowledge of demographic research and targeted advertising. We have succumbed to business marketing principles and now it is time to pay the piper. Or rather, to pay Uncle Sam.

Except for the bubble house that remains on the expense side of our books as an invisible and non-productive asset, we managed to squeak through the Great Recession relatively unscathed. But that was the Great Recession, which, according to economists, has miraculously ended. The Traphagen Recession, however, began in April of 2011. Beginning in that month, strict austerity measures were put into place. Infrastructure projects (air conditioning for the boat) have been shelved indefinitely and many of the community assets are on the chopping block (also known as Craigslist). We are going to tighten the belt — which, unfortunately, is closer to being around our necks than our waists. Michelle and I are now at war with our stuff. It is choking us to death, and it is time to cough some of it back up (nice visual, I know). Immediately after writing what to us is a ginormous check to the government which, no doubt, will be used as tax refund money to the “vast majority of Americans” receiving a refund, we are going to work to reclaim mastership of our domain.

Better yet, perhaps I should call up General Electric. They made $14 billion last year and paid zero in taxes. Better yet, Uncle Sam gave them a $3 billion refund. The CEO of the company said he felt kind of bad about that. Michelle and I made less than 0.0001 percent of that and we owe big. We’d be happy to help with any pangs of conscience and all GE would have to do is write us a check for the equivalent of a good, late model Ford F150 and they could hold a press conference to say, “Hey, the news reports were wrong! We DID pay taxes. We paid Mitch and Michelle’s taxes!”

In the meantime, however, I will be sleeping with one eye open. Michelle knows the value of my life insurance policy. As the saying goes, the only things certain in life are death and taxes. I hope that in my case the two aren’t related.

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