Are You Getting Your Money’s Worth For The Taxes You Pay?

potholeOne of the reasons why I dislike taxes is because I frequently don’t feel like I’m getting my money’s worth. Let me highlight a short story of absurdity to illustrate a point.

There’s been a loose manhole a half block away from my house which has persistently gotten noisier over the years. What once was a dull thud turned into a CLACK CLACK as each car passed over.

The journey to fix the noisy manhole began on June 3, 2011 when I first called in to report the problem.

Would you like to leave a name and number sir?” asked the operator.

Sure, please just have someone fix the manhole, thx!” I responded.

One month later, still CLACK CLACK.  “Howdy m’aam, I’m calling back regarding the noisy manhole.

Ah yes, we have a record that you called a month ago. The ticket is open and we’re getting someone to work on it.” said the operator.

Little did I know the process to fix the manhole would make my 100 day mortgage refinance seem like Usain Bolt winning a 100 meter dash!

WAITING AND WAITING FOR THE CITY TO DO SOMETHING

Two months after my second call, the manhole still clanked. I decided to put a weekly reminder in my calendar to call in. I also enlisted a friendly neighbor to call in when she could.

After calling in for 15 weeks in a row under my name to no avail, I decided to call in under various names to hopefully elevate the situation. Fred, Barry, Joe, Steve, Rick, Peter, Allen, Bobby, Mitch, John, Brad, Guy, Pearce, Nathaniel, Robby, Symba, Hulk, Skeletor, Dr. Spock, Thor, She-Ra, Zeus, and Obama all called in to tell the city the manhole was loud and annoying.

Calling the City was part of a weekly routine before lunch, when I got home, or whenever I heard the sound. Does the manhole have to cave in and cause a 10 car accident before the City finally decides to do something? It was absolutely ridiculous to have to call for so long.

After 48 phone calls over a course of 18 months, the city finally fixed the damn manhole! Hallelujah! What an awesome Christmas present! Am I crazy for being so persistent? Maybe. But crap, I pay tens of thousands of dollars in state income taxes and property taxes a year. At least fix a noisy manhole within a reasonable amount of time. Sure, if I paid no taxes or maybe less than $10,000 in State taxes a year, take 18 months. But if you plan to tax me $50,000+ (doesn’t include Federal) in State and property taxes a year, throw me a bone!

So what did they actually end up doing? They simply tarred over the thing one evening. The tar is already coming off after one month because they didn’t barricade the manhole long enough for the tar to dry.  Sweet. Guess we’ll have to go through another 1.5 year cycle soon.

NEVER GIVE UP

Don’t give up and let the City and State take advantage by taxing you and doing nothing in return. Make them work for our money! All levels of government are incredibly inefficient. There is no doubt that a private company would fix the manhole within a month if not a week. If you persevere until a point of ridiculousness, you will be victorious. The City is hoping most people quit calling, quit writing, quit protesting. Don’t ever quit.

My little manhole story is an example of how much inefficiency there is at all levels of government. The only way we can correct our budget deficit is to either starve the beast, or make sure everybody, not just a minority pays more taxes so we all feel the pain together. Once we all feel the pain, we can collectively work together to reduce government spending, government waste, and government inefficiency for a brighter future.

Let’s all hold hands and jump off the fiscal cliff together! Just don’t forget to make some savvy financial moves before you do.

Readers, do you feel you are getting your money’s worth from all the taxes you pay  Ever try to get the city to fix something? What are some of the things you’re doing to reduce your tax bill?

Happy Holidays!

Sam

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. says

    I get a small portion of my money’s worth by reporting graffitti. Anytime I spot a tag in my neighborhood or an area I care about, I call it in. Sometimes it takes several calls but the city has been pretty good about sending people out to remove them.

    The graffitti problem has gotten better in my neighborhood too. Thank goodness! Nice job getting that man hole fixed. That must have been so annoying!

  2. says

    I think the only people who get their money’s worth are the people who do not pay taxes! When you call the city as an individual, you don’t really matter. In a larger city like Los Angeles, I found that calling my councilman works a lot better. Years ago, my mother was mistakenly ticketed in another part of Los Angeles. The ticket described the wrong car, but her license plate. I took it to her councilman’s office and explained she was an 80 year person who never got on the freeway. His assistant made a call and had it removed. The councilman wants to be reelected, the clerk who answers the phone does not care.

  3. JayCeezy says

    My thought is the city was actually hoping the manhole would be stolen for $6 scrap metal, and replaced with a brand-new one that costs $350. Instead, they had to send out a 2-(wo)man (at least) crew with a supervisor, as well as a tar-trailer w/equipment. $3,000 for time and materials, roughly.

    Deferred O&M costs is one way the City saves money and shows that management is riding that budget closely.

    If I may suggest a solution, which it seems you will soon need, buy a $15 pry bar at Lowe’s and one last Friday-of-the-month at dusk remove the manhole cover. Send a Twitter-blast announcing a ‘Critical Mass’ bicycle flash mob, and be sure to retweet to several well-known personal injury attorneys. Problem solved.

    • says

      Haha, awesome JayCeezy! I was totally thinking of getting a $15 pry bar during the 18 month wait period. However, the manhole is in the middle of a busy street, and I don’t think I could have pried it open quick enough before getting hit.

      Furthermore, the whole in the middle of the street might cause death and disaster, which is what I feared would happen if the city didn’t fix it.

  4. Larry says

    You are complaining about a nuisance, pure and simple. There are other perhaps less obvious services for which your taxes are being used, such as funding police, firefighters, public libraries, parks, and schools, not all of which may affect you personally at any given moment, but all of which may affect you at some time and are more important to the well-being of the city. You’re accusing the city of inefficiency, which may or may not be true, but you also speak of wanting to reduce your taxes, which will only result in fewer services. Perhaps the operator from the city came to recognize the sound of your voice week after week under different aliases, and you became an object of mirth to whoever answered the phone. Perhaps there is a long waiting list of similar complaints in many other areas of the city for which only limited resources are available. It might have been more productive as well to canvas your neighbors to get 50-100 signatures on a petition; something that bothers a larger group of people may result in faster action than something of apparent concern to only a single individual.

    • says

      I think it is great you think that 18 months to fix a manhole makes noise, and that could collapse and cause a car accident is fine. This is why I believe the government will get bigger and bigger to take care of all of us.

      I just looked back at your previous comments where you say you are 64 years old and no longer pay income taxes. I understand your position completely. If I didn’t pay taxes or as much income taxes, I’d be fine with the City taking forever to fix something as well. As a fellow retiree, it’s normal for us to want to get other people to pay as much taxes and poke fun at them for complaining while we don’t have to pay much ourselves. It’s the American way!

      • Larry says

        a) I do not think it is “great” that the manhole cover was not fixed timely. Other than one brief comment about a potential dangerous situation, which may or may not have been the case, almost all your complaints were that the manhole cover was noisy.
        b) I still pay income taxes, both federal and New York, and have never said otherwise.
        c) I am not retired and do not plan retirement for about two more years.
        d) I would still pay taxes when retired, both on the withdrawals from my tax-deferred retirement accounts and (to some degree, since it’s a complicated tax computation) on social security, which I do not plan to take until at least 67-68.
        e) How much I personally pay in taxes is besides the point. And if Sam paid $2000 or $20,000 in state and property taxes, would he have less right to have the manhole cover fixed? Would the cover be less noisy? Would the city’s responsibility change? Would it be less likely to cave in? Are only high taxpayers deserving of city services?
        f) I am not “poking fun” at anyone. I am simply pointing out that in cases of limited resources, government has to prioritize, and essential services like police and fire must come first. If taxpayers do want more services, they have to be willing to pay for them. You can’t both want to reduce the taxes you pay and to have more services.

        • says

          How much you personally pay is a huge point. Let’s say you pay only $10,000 a year in State taxes, I can totally understand your lax attitude. If you pay way less than that, then who cares? But, if you pay more in State taxes than the median per capita household income, you will be much more annoyed if the City stonewalls you for 18 months on a simple fix.

          Back to the question, do you think you’re getting your money’s worth in taxes? I don’t mind paying more in taxes, but if I’m going to pay $40,000 more than my money’s worth, at least I’d like to have some follow through.

    • Brett says

      I don’t know Larry. If I paid more than $50,000 in state and property taxes a year like Sam, I’d be pissed too. How much in State taxes do you pay a year?

      • Larry says

        @Sam, 12/24, 4:50 pm: I wrote a reply last evening but somehow it disappeared. Here it is again as best as I can reconstruct.

        My attitude is not “lax,” but realistic. You are apparently assuming because you pay X amount in taxes, you are entitled to X amount in services. But governments don’t allocate services that way. We each pay the required amount according to our income; that amount goes into the funds the state and city use to budget their expenses, and those dollars lose their identity as having originated from any individual. As citizens we generally have little say in exactly how our tax dollars are allocated. We elect governments, they tax, and they use that revenue according to their priorities. Speaking on the federal level, I certainly did not want my tax dollars used to fund Bush’s wars or to bail out the big banks, but that’s how they were used. Our recourses as taxpayers are to exercise our rights to protest, and if that fails, to throw the bums out.

        I am not defending the city either, mind you. I hate noises like this myself, and it certainly appears the city took longer than necessary to fix the problem (and not well at that). On the other hand, neither of us knows what kind of backlog the city has for fixing problems of this kind. But to say you’re not getting your money’s worth implies that the neighbor down the street who pays ¼ of your taxes is entitled to ¼ of your services. Yet this neighbor hears the same clackety-clack and is every bit as annoyed as you. Is the city’s obligation to repair the manhole cover diminished for lower-paying taxpayers?

        In addition, it appears that you kept calling the same city office time and again, rather than going over the original agency’s head and petitioning your councilman or the mayor. Escalating the complaint to a higher office might have resulted in faster action.

        • says

          Calling them became routine and easy. They were on speed dial and it only took 30 seconds. It became a game where I wanted to get the number count up so that when the SF Chronicle got a hold of it, they could expose the City for more waste. Fight the power!

          I actually realize that no matter how much one pays in taxes, the treatment from the government will always be the same: bad. Hence, we might as well pay the least taxes possible. Something I’m working on for 2013!

  5. says

    The $1,000 per child tax credit for families making under ~$85,000 is an interesting one to debate. Given it costs $250,000-$500,000 per child over 18 years, I fear the government is incentivizing couples to have children they might not be able to afford AT THE MARGIN, and saddling couples with a lifetime of financial burden.

    The gov’t should not be meddling in people’s family lives. The law of unintended consequences, like the Cash For Clunkers Program which allowed hundreds of thousands of people to trade in operating $4,000 vehicles for $25,000 vehicles with incomes of less than $50,000 a year was a DISASTER.

  6. says

    Dude, come live in Florida. While I don’t *love* paying taxes, it’s definitely way nicer to do so here than anywhere else I’ve ever lived.

    1 – Our taxes are consumption based, not income based. Want lower taxes? Buy less stuff. Easy.
    1a – Because of this we have NO STATE OR LOCAL income tax. none. $0. =)

    2 – Our local property taxes (which because of #1 is the bulk of the tax we pay) are basically an itemized bill that we pay once per year. Check it out.
    http://www.plantingourpennies.com/2012/11/16/local-tax-time-property-taxes/
    We know how much we’re contributing to a LOT of the different services we use. Since we use the services, we feel like we’re getting a spectacular bill.

    3 – Our services are actually pretty awesome. Potholes would never go 18 months waiting to be fixed, and a lot of the local govt has embraced technology so we generally get better services at a lower cost. I think NPR recently said that FL has the fewest state/local employees per capita of any other state in the nation. And I embrace that.

    So… when are you moving? =)

    • says

      Coming right over! I hope to set up residence in Florida, Washington, Wyoming or Nevada soon. Everybody who is retired and has the financially freedom to do so should move. California wastes a tremendous amount of money.

  7. says

    I pay taxes in three countries so definitely not getting my money worth in two. Because I don’t use the library, the swimming pools, the roads, etc. But it is safe and well connected by public transportation, so it brings value to my properties. Here in Guatemala, paying taxes is just like setting money on fire, my road is unpaved because the mayor stole the asphalt money, they denied me public water access because I am rich by their standards, and I pay for public lightening when there is no public light in a one mile radius. Better consider this a fee to get in everyone’s good graces.

  8. Jason says

    Seems like this blog has been hacked. This is two posts in a row that are totally in conflict with your previous socialist postings! By the way, did you ever collect any $ from your election bets?

  9. says

    I hate paying taxes for a number of reasons and my federal ones are a waste for sure. Living in a small town, I do think the local and state government does OK for the amount it takes in. We have great libraries, and some of the best parks and trails anywhere on earth. My daughter attends a great public school that is rated on the same level as the schools in Aspen or Telluride. We also have a fleet of snow plows that keep us moving after 2 ft snow storms. I know all the town council members and most of the county commissioners and am not afraid to let them know if something needs attention. Not that they always fix it, but if you run into them often enough, it’s hard to ignore. I guess you could say I love my small town, warts and all.

    • says

      I can definitely see one get more bang for their buck in a small town. When you live in a big city, getting anything done is chaos! It’s great you know your councilman’s names. Everybody pitching in and caring for the community!

  10. says

    This incident clearly proves that when you have an enterprise that can make money out of thin air or by forcing people to pay to manage its affairs, you are subsidizing a highly inefficient, out of touch enterprise. You don’t have to think much to understand why your taxes are not being used wisely — look at our public school system!!

  11. says

    Well, you know that I pay very little Federal taxes, and therefore someone has to subsidize my lack of paying those taxes. :-)

    With that said, I’m really working on minimizing my taxes paid even more, since we’re going to take advantage of the HSA (health savings account) at work.

    Now, if I find out we can tighten the budget down enough to max the HSA completely AND still keep our 401K at it’s current withdrawal of 10% of my pay. That will most likely still lower my paycheck, but we shall see in the first paycheck of the new year I guess. :-)

  12. says

    Love your persistence. As for year end tax planning, tomorrow on the last day of the year many taxpayers with large capital gains should consider selling for two reasons. One, capital gain rates will rise next year and the medicare 3.8% surtax will also kick in. Second, dividends on these positions will be taxed at much higher rates next year. For more strategies on year end planning readers may want to go to my blog to read 2012 Year End Tax Planning Strategies.

  13. Henry says

    I live in the Midwest and work with lots of small communities. Government is incredibly efficient at this level. You wouldn’t call and leave a message with the Village office, you’d call your neighbor who’s on the village board or you talk to the mayor after church for a few minutes. Or, best case, just flag down Joe, the Village employee when he’s mowing grass. And anyone of them will get it fixed, if the funding is available.

    Government doesn’t benefit from Economies of Scale, it gets more inefficient as it grows. My advice, leave California and don’t look back!

  14. Geek says

    There are a couple of arguments to justify higher taxes for those with more income –

    It is ‘easier’ to save money and accumulate wealth once your basics are covered. This is not a “fair and just” argument, but more of a socialist “you can afford it” argument. As covered in your post(1), the 50k earner has ‘only’ 24k for non-tax/savings purposes, the 100k earner ~40k, and the 500k earner 122k. If the 500k earner (7k mo left) decides to live at a 300k earner level (5k mo left), that person can build up extra wealth very quickly.
    Another argument, and one that may appeal a bit more than “Because it’s easier for you”, is that high earners benefit more from taxes, proportionally. A rich guy having steak delivered to his house benefits from the roads while the steak is being delivered, benefits from food standards, benefits from the lack of bandits on the road (and the police force that decreases crime somewhat, keeping his expensive electronics safe), benefits from fire safety standards for a mansion vs. a hovel, and benefits from other people’s kids being in school instead of running around.

    So, at least for local taxes, the rich get a proportional benefit as to the assets that they have. More abstractly, the opportunities that they have are better and can be improved proportionally per dollar earned. For example, businesses are attracted to certain things in a city that can be made more enticing by strategic spending in the local government. Or, in upstate NY, they’re fixing potholes and the potholes are so bad that they can only fix the worst ones.

    As for federal taxes, that’s where things die a little bit. We can all agree that national defense is important, although we can’t all agree that what the US does is a little bit beyond defense I might suggest that perhaps it is.
    At link (2), you can see where your tax dollars go. Unfortunately, things like education and roads (easier to justify paying taxes for!) are tiny. Luckily many of us have either kids or grandparents, so we’re getting some indirect value out of the other things.

    Samurai, you should move to WA. I pay 250/mo in property taxes but I go to parks and the library all the time (>10 books/mo, 4 days at the Green Lake park/week in the summer) and the city fixes potholes within a week or two of your calling in. :)

    (1)http://www.financialsamurai.com/2012/01/27/how-much-income-do-you-consider-to-be-rich/
    (2) http://www.wheredidmytaxdollarsgo.com/tax_payers

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