Occasionally, life ushers in unanticipated insights from unexpected sources. This is exactly what happened recently at my office with my youngest son. When I am not travelling, he sometimes joins me in daily business life so he can glean unique lessons and I can augment my productivity in unique ways. I talk about this in detail in this blog post. On this particular day, I was running behind on a few remaining tasks and asked that he sit quietly while I focused. He was relatively compliant until he saw me signing a large stack of papers complete with a number of colorful “sign here” tabs.
Unimpressed by the seeming ease of my current task, he asked, “What is that big stack of stuff you just keep writing on, Papa?” What he didn’t know was that what I was doing didn’t feel very easy.
“I’m signing my name on tax returns”, I said.
He then asked very directly, “Tax? What is a tax and why do you have so many?”
He is seven, but his question was one not easily answered and rarely understood by the average American citizen. Our founding fathers fought for a release from tyranny. One manifestation of such tyranny was a tax rate in the low single digits. They would be unable to comprehend the current rate of compulsory contribution to state revenue. Frankly, the Pharaoh with his flat twenty percent tax in Egypt would have been a bit envious. The top Income, top Payroll, Capital Gains and Dividends Taxes have recently gone to 39.6%, 52.2%, 28% and 39.6% respectively.[i] Yes, this is tyranny at a whole new level. Anyway, back to my story…
There I was, confronted with a question that deserved an adequate answer. An answer that could be absorbed enough to satisfy this little guy’s inquisitive countenance. I thought for a moment that I might give in to the universal and effective adult refrain, “oh, you will learn all about it when you get older”, but I determined that he was tagging along on days like this so we could explore questions such as these. I signed the last state tax return, packed up my laptop and announced that the last lesson of the day would be discussed in the truck on our way home.
Son: So, do we have to pay taxes?
Me: Yes, and the Bible says the community rulers can collect a small tax for protecting everybody and for punishing crime.
Son: But you said we have to pay lots and lots and lots of taxes. Why?
Struggling for an analogy, I settled on something I thought could clear up this question of why we paid so many taxes.
Me: When mommy and daddy have to go out and leave you at the house, what do we do?
Son: You get a babysitter.
Son: Because we can’t take care of ourselves.
Me: Right, and we have to pay the babysitter. So, if you kids could take care of yourselves, would we save a lot of money?
Son: I guess so…
Son: Well, we could do things for ourselves and you wouldn’t have to pay for help.
Me: Exactly. When you learn to take full responsibility for yourselves we can stop paying babysitters.
Son: Ok, wait. I think I get it. If you need more babysitters you need more taxes.
Me: You got it. So does that answer your question about what taxes are and why we pay so many?
Son: Pretty much, but I have one more question. Why don’t we just all take care of ourselves and then we would not have to send the government so much money?
Classic. There it was – the answer to his question and a plea for self-government all at the same time. Babysitters. Taxes. Make the connection.