“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.
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?