We’ve been slowly trying to build up a cash savings sufficient to cover six months’ worth of expenses. Just the other day, I was remarking to Philip that we were doing so well, almost there. Just when you’ve gotten prepared for a rainy day, doesn’t it seem like the rain always comes?
First there was just a light sprinkle, nothing too major, in the form of an unreparable dryer. My husband is very handy, but this was unfixable.
OK, no problem. I have drying racks for just such an emergency, and within a week we’d bought a new dryer.
A minor setback of $400-500 is fairly easily made up for.
Oh, but then the deluge came.
We just finished our tax returns a few days ago and for the first time ever, we owe the federal government more – almost $4000 more. It’s one thing to have it taken out of your pay before you ever see it, but oh to have to write a check for thousands of dollars to a government whose policies we often find so morally repugnant! Luckily we had prepared by saving, a savings which has now been reduced by four grand, a bitter pill to swallow. Our tax rate bracket increased due to my having gone back to work full-time in November of 2014 – this is really something to think about when you are trying to decide whether/how much to have the woman in the marriage working outside the home. Will the increased tax burden be worth it?
But how to make up this money so we can reach our goal of having six months of savings?
I told my husband, “I’m going to work part-time over the sum—”
“But we can save—”
“No. Absolutely not.”
So scratch that idea. My summers are not spent lazing by a swimming pool but rather in the garden planting, weeding, harvesting, canning…or at a U-Pick farm for things I don’t grow. And this summer I will be raising 12 chickens, four turkeys, 12 ducks, and two geese on top of it. It’s my way of saving us some money while producing better quality food, and my husband values this more than having me traipsing off to work all summer. It annoys him enough to have me “off farm” during the school year as it is.
And he’s right for another reason too – I just did a little research and found that not only did we jump a tax bracket, but we jumped to the top of that bracket. Had our income been even a few hundred dollars more, we would have been bumped up another bracket. If I worked over the summer, I would have to earn enough to cover another 3% of our total income being sent off to be wasted by the federal government. It’s really not worth it.
Well, I grew up poor, I said to myself. I know how to tighten up a budget. While I was pondering this, I complained in a comment on another blog about our tax bill, and Fuzzie told me that under FDR, the tax rate was 77%! I looked it up and this is what Wikipedia had to say about the history of the federal income tax:
Congress enacted an income tax in October 1913 as part of the Revenue Act of 1913, levying a 1% tax on net personal incomes above $3,000, with a 6% surtax on incomes above $500,000. By 1918, the top rate of the income tax was increased to 77% (on income over $1,000,000, equivalent of 15,300,000 in 2012 dollars) to finance World War I. The average rate for the rich however, was only 15%. The top marginal tax rate was reduced to 58% in 1922, to 25% in 1925 and finally to 24% in 1929. In 1932 the top marginal tax rate was increased to 63% during the Great Depression and steadily increased, reaching 94% (on all income over $200,000, equivalent of 2,500,000 in 2012 dollars) in 1945. During World War II, Congress introduced payroll withholding and quarterly tax payments.
So it seems that the federal government just sort of declared that they suddenly had the right to tax each state’s citizens’ incomes. And notice how quickly the income tax increased, especially on the rich. And perhaps one may feel that it is completely just that the rich should have to pay all those taxes, but the point I want to make is that the federal government will decide how much of your income it wants at any given time and will simply declare it to be so. The government could decide to tax you at a rate of 99% tomorrow and there would be nothing you could do about it.
Oh, did I say nothing? Actually, there is one thing you could do. You could earn no income for them to tax.
I’m not planning to quit my job, but I’m also not planning to earn any additional income to line the federal government’s pockets with, either. My way of making up for the lost $4000 is to reduce our expenditures by that amount, and I encourage you to do the same. The less you spend, the less you have to earn, and the less money you earn, the less you have to chuck into the maw of an insatiable loveless Union.
So I started to look around. Where can we save money?
First, the thermostat went down from 68º to 65º (and a chilly 60º at night). We’re having a very cold spring here in Michigan, so we still have the heat on. As we have an endless supply of dead trees on our land, a wood-burning stove is something we are saving for and will reduce our propane bill even further.
Second, I set up all my drying racks in a spare bedroom and will air dry as much laundry as possible to save on propane and electricity. Speaking of which, this is my preferred style of drying rack because the clothes hang free instead of being draped over the wet clothes on the next rung down:
We canceled our home internet last month (Hughes Net’s service was horrible anyway) and are just waiting for them to send the box that we are supposed to mail their modem back in. We don’t have pay TV, but if we did, I would cancel it. I cancelled our land line phone a few months ago because no one but my mother-in-law ever called us on it. I’m basically looking for as many ways to save as I can find.
At present, we can actually afford to pay for propane, electricity, and internet, but doing these things before they are really necessary feels much nicer than doing them out of dire need. Curtailing one’s lifestyle is so much less onerous when it’s voluntary rather than under compulsion. And when necessity strikes, why you’re already in the habit of thriftiness.
Part of the saved money will go into savings, but some of it will go into small-hold infrastructure. The government can tax your income, they could even confiscate your savings I suppose, but it’s pretty unlikely that they would take away one’s hen coop or demand that duck eggs be turned over to the state. At this point, I put more faith in my gardening tools, my canning jars, and my food-producing critters than I do in the long-term stability of either income or savings.
Hey, did you ever wonder why the federal government doesn’t encourage thriftiness and frugality like they used to? Remember those old 1918 USDA propaganda posters about keeping hens that I shared a few weeks ago, encouraging thriftiness and self-reliance? Here are a few more from the same time frame:
Why don’t we see stuff like this encouraging thriftiness now, even during times of economic recession or war? Why is the thrust of our government’s poverty interventions dependency entitlements such as SNAP or welfare-to-work programs?
Well, what occurred to me is that, other than extolling “victory gardening” during WWII, you stopped seeing the federal government encouraging home thriftiness right around the same time that the federal government discovered its right to levy income tax.
And then right after World War II, feminism came marching through, encouraging women to come out of the homes where they could labor for their families in a way the federal government could not tax and into the paid labor force, where the government could tax them.
Interesting, isn’t it.
Thriftiness and working toward supplying some of one’s own needs reduces the government’s income stream. I can’t think of a better method of peaceful protest, can you?