I Want Candidates Who Used To Be Bad With Money

Just as reliable as your local newscaster standing in a crowd on New Year’s Eve asking people about their New Year’s resolutions, there’s April 15th every year where a local newscaster stands on the steps of a local post office asking people in a long line why they waited until the last minute to postmark their tax return to the IRS. 

Some post offices even stay open until midnight and have a local celebrity moment with one of the counter employees giving a quote like, “It shouldn’t be like this, but we gotta help everyone out who waited until the last minute.  Maybe next year people will be a little more ahead of the game.” 

But they never are. 

This is how I learned what taxes were and that’s the extent of the tax training I had until I was in my early 20s and had to do them for myself.  It wasn’t until then that I learned that for many people “doing your taxes” was a euphemism for “finding the most creative ways to pay less in taxes.”

These creative ways mean different things to different income classes.  The more wealth you have, the more elaborate the creativity; employing businesses registered in tax havens like the Cayman Islands or creating foundations that do nothing other than enrich the people dumping money into them. (I'm looking at you, Mr. President.)  But for poor people it can mean conveniently forgetting types of income hoping the IRS doesn't find out, not fully declaring your income, or living a cash existence that’s untraceable by the government.  

There’s a book called Rich Dad Poor Dad by Robert T. Kiyosaki (more anecdotes than data) and it proposes a theory that you learn about how to handle money from your parents.  If you don’t recognize and deal with that fact you’re simply destined to have the same finances and relationship with money that your parents had.  

For anyone with responsible or thrifty parents that could be a good thing.  Maybe you pay your taxes on time and have a corporate job with 401K matching contributions since the day you got out of college because that’s the world you know; that path made sense to you.  

For anyone who has described their childhood as being “raised by wolves,” as I have, it might feel like a death sentence.  In my case, death by Chinese water torture where the water droplets on your forehead are calls from bill collectors.  Relentlessly.  Daily.  For years.

My 20s are a blur of overdrawn checking accounts, non-existent savings accounts, over-due credit cards, frozen accounts, blind-leading-the-blind tax filings and unsuccessful attempts at filing bankruptcy.  

The first year I needed to file taxes I remember feeling a new type of existential dread as I looked for W-2s in the stack of important-looking mail that I mentally called “scary stuff I don’t know how to deal with.” 

Looking through this pile made me think, “What does it mean to consolidate your school loans? I have school loans?  How am I supposed to pay school loans when I’m barely making rent in New York City?”

I had five jobs and only two W-2s:

1.  Folding sweaters at Banana Republic I couldn’t afford, even with my discount.  A totally corporate gig; given a W2 at the end of the year.  

2.  Freelance art handler paid in cash.

3. Cocktail “waitress” at a restaurant/bar/club/pool hall.  (Although I identify as male, my female coworkers were angry I’d been promoted from busboy to server and called me a "waitress" since I was the first guy to have the gig.  The vibe of the place was more similar to Hooters than Applebees, so in a way, I feel my position was quietly transgressive).  There I made 98% of my earnings in tips and the official pay of $2.85/hour (the minimum wage for tipped workers in 2003 dollars, not adjusted for inflation) went directly to the government 

4) Dancing off-off Broadway with a small dance company - unpaid

5) Interning in the office at a prestigious dance company where I took dance class - unpaid

I filed my taxes late that year.  When I called my mom asking for advice she told me, “Just go to the post office.  They’ll have the forms there.  You don’t have any investments.  It’ll be easy.”  

The post office I went to in the East Village had forms in only Chinese and Spanish. 

A more reliable friend with - you guessed it - a rich dad said, “I just give all that stuff to my dad and he files it with our accountant.”  I asked my mom if we had a family accountant.  We didn’t. 

I felt alone and adrift and was cultivating a kind of paranoia where I felt like even friends who didn’t come from money still had some familial mechanism so that every April 15th they would be guided somehow.    

Thankfully a close friend whose parents had TurboTax invited me over to their place and offered to cook me dinner while I did my filling.  I have a feeling the smells from the kitchen were intended to soothe me, but nothing could prevent the panic attack that began as soon as I saw “Please enter your social security number to begin.”

Separated from the cooking action I yelled out questions to the parents every once in a while.  “Can I write off moisturizer from Kiehl’s?”  No.  “Can I deduct my therapy bills?!”  No. "But those both seem like necessities.  Isn't that how this works?"

Then a real question from me:  “It says, ‘Please enter any cash earnings from the previous year,’ what do I do if I don’t know how much that was?”

My friend looked at me and shrugged.  A look conveying:  “Whatever you put in those boxes is on you, bro.” 

This rich dad family was so incredibly generous to provide a place to start, but the tax advice I needed was still somewhere else. 

Looking back, did I declare my cash tips that year?  I’m not sure.  I’ve lost those paper returns.  That computer I used is long gone.

I developed PostShame.org and #PostShame as a way to build better leaders.  I would rather vote for someone who was saddled with poor dad syndrome and figured out a way to cultivate their own wealth than someone who had their wealth handed to them and then told poor people they should “pull themselves up by their bootstraps.”

My intention in sharing my story of money troubles and financial workarounds is to inspire leaders to embrace radical transparency so that young people can learn about finances from someone other than their parents. 

Being #PostShame means looking for things in your past you worry would leak online.  I am embarrassed that I didn’t have a handle on my finances in my 20s.  If someone leaked my tax returns showing the years I was late filing and neglected to claim income that the IRS found out about anyway, I’d be mortified and feel it would reflect poorly on my character.  Am I product of my circumstances?  Sure.  But if I claim to want to be a leader in my community I need to share my journey pursuing financial freedom and be honest about my past. 

Currently, I’m working with my accountant and a tax attorney after having filed form 4506T-EZ with the IRS requesting my tax returns from 2000-2006 and am planning to file amended returns stating estimates of cash income and I will pay any new tax owed, penalties and interest. 

***

Over the years the TurboTax Dinner became a tradition with friends.  I had been wrong.  Rich Dad or Poor Dad, everyone had issues with money and benefits from connecting with their friends about struggles with money.  One year there were more than a dozen of us using the software, one at a time, asking each other questions, taking stock of the prior year.  Sharing stories of raises and how we asked for them; being laid-off and filing for unemployment (“You have to pay taxes on unemployment income?!”); plans of what we’d do with our tax return checks.

Some friends formed LLCs and S-corps and shared what they learned in the process; stories of starting to save for retirement.  Celebrating those accomplishments with friends felt meaningful and I realized I was finding a tribe of comrades working to help each other learn about money. 

By the time I was ready to form my own LLC for my lifestyle consulting business I knew it was time to get an accountant. 

Now I’m focused on my financial health and happy to share my story of struggle and growth with people.  Is my tax rate too high?  Absolutely.  Being #PostShame about being bad with money I’m standing up to bring the tax rate down for middle class families and shine a light on all that “creative” cash in the Cayman Islands.

Wouldn’t be great if a revised tax system was fair and easier to understand? 

I now love my annual trips to my account’s office and every year I say, “I used to do this with friends over dinner all huddled around TurboTax.”

“Oh, you don’t want to do that.  You need advice from a professional.”

“Well, you gotta start somewhere.” 

 

 

 

Adam MacLean