Monday, January 23, 2012

What Does Free Cost? (pt.1)

I used to work for a major tax preparation company. Around this time, my viewpoint began to shift rapidly. Why? I saw more than I had before. I saw the basics of the money hierarchy and I heard (far too often) how people felt about it.

For two of those tax seasons, I worked 6 days a week to average 70 hours (some days my shift was 8 am to 11pm), after I woke my young children and got them off to school and drove 30 miles to the office on a narrow boonies road that was rather scary (this was when I got my first cell phone, for safety). When I got home, I ate whatever the family had earlier, cleaned my dish up, checked the laundry to move from washer to dryer or so on, kissed the kids on their foreheads and crashed. On Sunday, I folded all of the clothes from the week and spent time with my family. My husband was full time active Army and on one of the few times he had a normal schedule enough to pick them up at 5 or so when he got off. Thank goodness for after school care right there at the school!

While I was working this schedule, I was dealing with many clients who came in and told me they’d worked for 3 months and then quit. As I’m trying to pick my chin up off the desk, they proceeded to say they had to make so much to get their earned income credit.

At this point, I swear I would have strangled them if my ethics and lack of interest in being in jail didn’t prevent it. Did they know WHERE that “free” money came from? I do. It came from me. From my husband. From all of us working so hard every day just to keep a decent roof over our heads and enough clothes and food. I constantly saw Help Wanted signs at the same time I helped give these people money they didn’t deserve. Yes, my viewpoint switched fast.

I also saw a young family of two doctors with two young children who together made just over $100,000 for the year denied being able to claim the interest they paid on their huge school loans in order to get through med school to become doctors. Even with their income, it was going to take quite some time to pay off those loans, to include the interest. They also couldn’t claim many other deductions to reduce their roughly 30% tax rate. And then I heard plenty about the “rich” (referring to couples such as these) having it so good and that they should pay more. The biggest complainers generally were paying about 4% in taxes, if that, after their “free” money from the government, meaning from other taxpayers.

At what cost are they getting that free money? At other people’s cost: people who sacrificed and risked their own funds in the form of loans with interest, or in risking it to start a business where they could then hire other people who needed the work. It’s risky to own a business. It’s a lot of hard work to own a business. And then the people they employ after taking that risk and doing the hours it takes to make a business thrive enough to hire others bite the hand that’s feeding them.

Everything that comes to someone for free is being paid for by someone else.

We need to stop and remember that. We need to realize that if we want to risk our own funds and our hour upon hour of work (more like 70-80 a week when you own a business as opposed to when you work for one) to start our own business, we deserve the payoff from it if and when it comes. Without payoff or a chance of payoff, there’s no point in the risk and then who will bother?

Wait, you say.. I was working those hours when I didn’t own that company, right? Yes. But I was working on commission, so more hours meant more profit, as it does for a business owners. No way would I have done it for the regular weekly salary alone. There would have been nothing in it for me to go to the extra time and effort if I wasn’t getting something for those hours. That’s how it works. People don’t care about a job that they don’t get rewarded for doing. And people won’t own businesses and hire others if they have no reward for doing so.

Human nature. We work on a reward system. It’s innate. Take that away and you take away drive. Want achievement? Reward it. Want innovation and creativity and independent spirit? Reward it. Don’t bite the hand trying to offer it.

(part two of What Does Free Cost will deal with artists)

~~

2 comments:

Dorothy said...

I believe there have been no comments yet, because you have said it all, clearly and correctly.
What is there to add?

Well, perhaps the suggestion that it would wonderful if the policy makers in Washington understood as much. But they don't understand economics or people well enough to know the truth of this. It's a pity. Their lack of knowledge and understanding of both creates problems such as we are experiencing in our country now.

LK Hunsaker said...

It was Reagan who said you won't find the best and brightest in government because all of those people were businessmen. ;-)