Frugal Green Living: Looking Back At The Idiot Tax

This series is now called Frugal Green Living, but two years ago, before the worst of the recession hit, it was called "Get Recession Ready!" and we had quite a few suggestions then, avant le déluge. An example: Don't Pay the Idiot Tax.

It started with a discussion about Hummers, a quote from a now almost moribund website:

A writer at Max Gladwell biked by a big yellow hummer and thought "Wow, that guy is really paying an idiot tax." He (or she) is being penalized at a far greater rate than non-Hummer owners, and it stems directly from their own stupidity. And by stupidity, we mean shortsightedness, naivete, and a general sense of importance or invulnerability.

Of course, we know what happened to Hummer. We extrapolated the concept to other aspects of life:

The idiot tax is being paid by everyone who traded a little more green space for a longer commute, a few more cupholders and a little more convenience for much poorer gas mileage, all the choices that so many people have made when the price of fuel was not a consideration. For many, the trade-off made sense; nobody could imagine that things could change so quickly. It is not fair to call people stupid, the choices made some sense at the time.

Of course, the price of fuel ceased to be a consideration; it dropped by half. Instead we got a real estate meltdown, and whole communities covered in foreclosure signs. A lot of people are paying a lot more than the idiot tax, having lost everything. And you cannot call them idiots, because the system made it so easy, so attractive. And when did house prices ever go down?

And of course, we are all now paying the idiot tax, for the bank and Wall Street bailouts and TARP under the last government and some of the stimulus money spent under this government, and will be for years. We have less to spend, so we have to spend what we have more carefully. But the conclusion of our post still holds:

Whatever you are buying, figure the extra price you will pay over the next five years when buying a house, a car, a boat or a vacation, for choosing what you want instead of what you need. That is the idiot tax.

Read the whole Frugal Green Living series for more.