“The hardest thing in the world to understand is the income tax.”
― Albert Einstein
For obvious reasons, politics is on my mind this week.
Something I’ve probably not spent enough time thinking through is how politics affects my money choices. A lot of the “big” purchases normally associated with American politics are simply not part of our lives at the moment. We have only ever bought one car and that was from a family member, we have never bought a house, and the biggest choice we’ve made is to live and work abroad which obviously makes an impact in our taxes and expenses. I know that political policy informs my life day to day, but I’d never really really done an examination as to how or how intimately.
That started to change last year after the Brexit vote. It was a political decision that had and will have enormous consequences for the industry I work in, to the tune of millions and perhaps billions of pounds. Of course I know that every budget the US Congress has passed in my lifetime has affected me, but this was the first time that I felt the financial implications of politics hit my work and wallet directly since the Great Recession. It was sobering and it changed several of our potential futures.
image via Death to the Stock Photo
We love living in London, the idea of ever leaving cracks my heart…but we do occasionally take a look at career opportunities back in the States where we’d be likely to make larger paychecks (Jeff in particular). Meanwhile the exchange rate is now much less favorable to us than it once was, with more uncertainty in the forecast. Given these financial realities, influenced by international and local politics, it’s not inconceivable that we may move back to the States or to another country at some point. If we do our taxation will change, so will other political realities.
As the future of the Affordable Care Act is currently in a state of limbo in the States, I just had the cervical exam I’m entitled to as a person who pays UK taxes that funds the NHS–I won’t call it “free.” I’m also provided access to regular birth control at no additional cost to me and regular dentistry (joke about UK teeth care all you want, I still get mine checked out every six month and it costs a fraction of what it would in the States). On the flip side, there are legitimate critiques for a system that many find bureaucratic and overstretched, and that some people dislike.
Money and politics are a constant trade off for what we have, what we want, what we are able to provide for ourselves, and what we deem that government/society/employers should provide for us. The financial choices I/we have made are personal ones, but they are political as well. As the saying goes, “The personal is political.”
But we’ve not yet really parsed out how politics will affect our desire to invest, to save, to retire. These still feel like “far away” problems, even though I know they aren’t.
So, wiser, older, and more experienced friends, talk to me about how politics has affected your money choices. What decisions did you have to make under the past administration (if you’re American), and what decisions do you think you will need to under the new one? Brit friends, ditto your experiences under recent governments?
7 thoughts on “Politics and Money”
You are aware (?) that living abroad means you’re not paying into Social Security. So that means you need to save considerably more for retirement.
As for American policy, it now means we’re considering whether or not to stay in the U.S. under Trump. We’re lucky enough to be able to move to Canada (or possibly Europe if I get an Irish passport) — but work is work and income is income…and I chose the U.S. because work opp’s are still always better here than in Canada and costs similar EXCEPT for our brutal ($20K a yr right now pre-tax) cost of healthcare.
One of the political facts of American taxation is that its rates for regular people are relatively high — in return for…?????? A huge military and pennies devoted to healthcare and education. I know you’re from a military family, but this skewing of federal funds drives me mad.
I am from a military family but I also believe our military spending is wildly out of proportion–yet I’m also aware that I have parents who will rely on the existing retirement benefits and an active duty brother who relies on the most up to day research and funding to do his job. It’s complicated. But I agree that for what Americans pay in taxes, what they get in exchange isn’t always apparent in the to day to day lives of much of the citizenry, except for programs, the users of which are often spoken of disparagingly by politicians. I think this disconnect may be why taxation is such a consistently contentious point.
I have precisely zero interest to live in the US under the incoming administration, although I’m also aware that they are hilariously unlikely to be able to do a tenth of their talking points. At the moment, I’m happy to live and work abroad and am taking a wait-and-see policy as to what actually changes under this new leadership. Not optimistically. More on that tomorrow.
I do get it, which is why I hesitate to criticize military spending — but it would be VERY useful to know what % is spent maintaining current forces; what % goes to the VA (separate?); what % is being spent to acquire new weapons or upgrade current ones, etc. I hate just watching my very hard earned $$$$ disappear into a black hole. In Canada, taxes are annoying but we get very clear payback in very affordable, high-quality college tuitions and healthcare. It’s much easier to swallow tax when you see a very clear personal benefit.
I bought a house under the soon to be previous administration, we used the $8000 tax refund for buying a house during the housing crash. That was a huge benefit, and directly influenced our buying options. We also bought a fuel efficient car and got a tax break on that.
So many fun things about living over seas, but it has given me an appreciation for US options in health care are. Yes, I think healthcare should be more accessible for all, including birth control etc. Shock, I’m not anti Planned Parent Hood, just anti, poorly run government programs. That being said healthcare is going to be a huge factor when it comes to where we choose to retire.
So many decisions!
I’m concerned about Brexit’s impact on my pocket, especially given the likelihood that we will not be staying in the single market. I’m also worried about an NHS that is becoming dangerously overstretched and understaffed.
Brexit’s already having an impact on the price of living — food and fuel prices are set to rise. So I guess politics is affecting my money choices in that my impetus to save and cut back unnecessary expenses is stronger than ever!