Why not to give in to bad financial behavior

Corruption and fraud seemed to be more accepted in U.S. society now, but that doesn’t mean you should join in to the bad financial behavior.

I still remember the 2016 debate between Hillary Clinton and Donald Trump where he said he was “smart” for not paying any federal income taxes.

Boy, those were simpler times.

Corruption isn’t just acceptable at this point, it’s practically de rigueur. From targeted investigations to paid-for pardons, justice is going to the highest bidder.

Financial fraud is barely even shunned at this point. Republicans have gutted the IRS—the agency that helps fund the government—by reducing tax compliance personnel, thus making it easier to cheat on your taxes and not get caught.

Just like a company, a nation is modeled after its leader. That’s why Apple employees for the longest time denied paternity to their children and took credit for other’s work. I’m joking! Right?

Because of all this, it stands to reason that many of us would naturally gravitate towards more fraud and con artist behavior. After all, it’s what we see our leaders doing.

But while there is definitely money to be made in fraud and other financial cheating, I urge just a little bit of caution, and the reminder of the famous wisdom, that people can be “so preoccupied with whether or not they could, that they didn’t stop to think if they should.”

A thought experiment

Let’s start with something not financial.

I was in line for gas at Costco the other day. The gas station was shoehorned in the parking lot, requiring a one-lane approach before separating into multiple gas pumps.

We were all diligently waiting in line, when an impatient driver decided to pull out of line, drive almost up on the curb, pulling in front of everyone and getting into a free space in a gas line.

Now, if you were in line, what would you think?

A. I should do that too
B. I hope you’re not selfish in the rest of your life too

Why not cut in line too?

Morality aside, why not just cut in line? There was clearly a space for a car to fit past the other cars and into a gas lane. No one appeared to be hurt. What’s the problem?

Well, the main problem is that the benefit to the line-jumper relies on the rest of the rest of the line not jumping. If all cars decided to jump the line, the space would have filled up, and the line would have started to look like rickshaws on a street in India or something.

When few people do something socially deleterious, those few prosper to the detriment of everyone else. When everyone does something socially deleterious, everyone is worse off.

And this is the challenge when it comes to these types of games. You want to get a benefit, but it only works when no one else gets that same benefit.

Taxes

Tax season just ended for most of us. Now, no one loves paying taxes. It’s not fun to have what feels like half your paycheck going out the door.

And while there’s nothing wrong with tax optimization (that is, after all, what the system is designed for), it is tempting to go full on into tax avoidance, like our dear president. Do they really need to know about all this income?

If you shirk your tax responsibility, you get a pile more money, and the country is more or less none the wiser. But if everyone starts to do the same avoidance of responsibility, the government ceases to have the money it needs to fund its obligations. Since most of those obligations are entitlements like Social Security and Medicare, everyone ends up screwing over everyone else.

Swimming upstream

I recognize I may be coming across as priggish, a Boy Scout, and—worse—out of step with the times. When we have a convicted felon as president who actively solicits private donations in order to curry favors, who are we to do anything other than likewise?

Well, I’d argue that, for one, do we really want to emulate this administration in our own lives? Sure, they have more money than you or I will likely ever have, but no amount of money we have is a high enough price to pay for our souls.

The vast majority of people out there are good people who want to do the right thing. Let’s celebrate—and emulate—them instead. Keep your place in line.