Taxes are paid all day long every time you spend: sales taxes, use taxes, value-added taxes, shipping taxes, resale taxes, payroll taxes, social security taxes, Medicare taxes, state and federal unemployment taxes, income taxes, intangible taxes, property taxes, utility taxes, telephone taxes, registration fees, license fees and on and on.
Most taxes are discretionary. No, you don’t get a choice to pay them or not; well there is the jail thing, but I’ll still consider that a bad alternative to simply paying your taxes. The discretion comes when you decide to spend or not.
If you do not consume, you do not pay the tax. When you spend, you pay an additional amount on most transactions for taxes many of which are cleverly hidden within the price of the good or service you are buying. Take a look at a telephone or electric bill and try to understand the litany of fees listed there. Don’t bother; they are all taxes in disguise. When you spend less you pay less tax. Those taxes are discretionary.
A note about big taxes, like property taxes; these taxes usually are payable on a schedule with a due date some months later. If you pay the tax on time it is the actual rate. If you pay it late there is usually a late penalty that will cause you to spend additional money on tax that was unnecessary.
Conversely if you pay in advance, as usually scheduled on your property tax bill you can often reduce the amount you pay in tax sometimes up to 10%. This is almost always a good bargain for the tax payer. Use it and keep the balance of the tax bill in your own pocket. Many states offer exemptions from all or portions of property taxes and limitations on the rate of increase of your property taxes.
Did you know that in many areas the property tax rate on new homes is set based on the closing price? That’s right. All those exorbitant amounts that developers charge for wider driveways, screen porches, upgraded kitchens, tile floors, sound systems, crown molding and so on set you up for a life time of higher property tax rates.
Telephone companies are notorious for myriad of taxes and unintelligible fees that take half a page to list. These taxes and fees are all associated with services you ordered. Do you still use them? Did you ever use them? Go down that bill and question each line. As you do this analysis remember that technology is rapidly changing and services that used to come from only one supplier may now be available through other or multiple suppliers that you might find to be in competition for your spending. When you reduce your overall purchases you also reduce you tax and fee expense proportionally.
Utilities operate in much the same way as telephone companies. What is a network transfer static recovery fee anyhow? It may have to be paid, but if it is a percent of some usage volume you can pay less when you use less. And using less fits into the overall effort to reduce spending through changing habits.
It is known that any given household can easily reduce its energy consumption by 20% without noticeable changes in energy usage habits. Think about what is in the refrigerator before opening the door; get what you want and immediately close it. Turn the water heater down a few degrees. Turn off electrical products when not in use. Along with paying for less power, you also pay for less taxes and fees.
Do you want to spend less on gas tax? Buy less gas. It’s easy, grab the sneakers and take a stroll to the store for those one or two things you decided you can’t live without. Not only do you save the gas tax, you save the cost of gas and you get some exercise. And, might even run into a neighbor you had never met.