Missing Half: Giving and Taxes Through a Different Lens
By Brian Page
April 25, 2017
Part of financial literacy is knowing how money works, which is common instruction in schools that offer a personal finance class. But to be truly capable, and enjoy better outcomes, adults must also understand the social and emotional aspects of money. That constitutes The Missing Half of financial education. In this series, Right About Money contributor and award-winning financial literacy teacher Brian Page examines how to nurture behavioral skills that lead kids to better financial outcomes in adulthood.
A philanthropic spirit arises from looking at life through the lens of the less fortunate. As parents, we strive to model selflessness and instill core values by donating to causes and volunteering in our communities. This past summer my young son raised $10,000 to fight Multiple Sclerosis riding his bike across America with his grandfather. I could not be more proud. But conversations about giving are not just for the dinner table. They are for school too.
Social awareness is a big part of emotional development; it is a core competency described by the Collaborative for Academic, Social and Emotional Learning, which is spearheading a movement toward social and emotional education in our schools. The collaborative describes social awareness as “The ability to take the perspective of and empathize with others, including those from diverse backgrounds and cultures…and to recognize family, school, and community resources and supports.”
Philanthropy fits in there nicely–and as it happens, giving is part of most states’ financial literacy standards. A not so neat fit is the subject of taxes, which are an important part of personal finance but one where society’s message is to pay as little as possible. In talking about taxes with students, the social aspect—not just minimizing the bill—is critical.
Talk about mixed messages. Our president refuses to release his tax returns and has boasted that he did not pay any federal income tax over many years. That makes him smart, he says. Others have pointed out that legally avoiding as much tax as possible is the American Way.
No one should pay more than they owe. But neither should they engage in financial gymnastics to avoid the taxes that are due. This is where integrating social awareness in a tax the lesson can pay big dividends. Taxes don’t go down a sinkhole, though it sometimes feels that way. Taxes are a form of philanthropy. They support the common good by paying for roads, schools, parks and so much more. I asked the financial writer Helaine Olen, author of Pound Foolish, how she approaches the subject of taxes. Her take:
“The assumption underlying this question it is that taxation is a bad thing. It’s not. Teachers should explain to their students the things they use on a daily basis that our taxes pay for. One shouldn’t teach the value of minimizing taxes. Instead, one should discuss how to ensure taxes pay for things we need.”
As a teacher, I believe it is my responsibility to ensure that students are exposed to the resources they need to keep as much of their own money as possible. In March, United Way volunteers spent a day in my classroom using the program My Free Taxes to help my working students file their own tax return.
The emphasis was on paying what they owe, and not a dime more. Students must be exposed to every resource and opportunity to keep what they make. But such lessons should be part of a broader discussion on how tax dollars benefit them along with the rest of the nation. That’s profitable social awareness.