By Myracle Stevenson
Introduction:
It has been a virtue since forever that saving money is more like investing it for the future. People always prefer saving some amount in their savings account so that have a sufficient amount for the big journeys ahead. But no one thinks deeply enough to ask, is it beneficial? Is it profitable enough considering the future value of money? Will that money appreciate or depreciate in the long run? All these questions are never bothered to be considered to think before saving money. No doubt savings are necessary and we all should encourage this virtue, but it doesn't mean that it will always be beneficial for us in the long run.
Why Are Savings Not Beneficial In The Long Run?
If you think that savings are beneficial for us then get ready for an ugly surprise. You are living in a delusion because you are not clear about the rules of money. You are unable to properly understand what the effects are if the money depreciates or after what period dies it starts depreciating. The rules of money changed in 1971 and we no longer accepted or realized that after this the dollar is no longer money.
The Value Of Money:
If you think over it you might realize that the value of money is just a piece of paper. This means its value is no greater than a paper. We also don't know how to value money. We just know that it can be used in the exchange of goods and services. But this is the intrinsic value of money. What else is there instead of this common exchange system? The value of money is, therefore, not only intrinsic. It can be exchanged in return too. That is why money has no value but is only valued for the exchange of goods and services. The value of the currency has only one common purpose. So the more goods and services are purchased, the more value of money increases and vice versa.
The Illusion Of Money In Tax:
The other major facet of money illusion is in tax. This is the tax that is deducted from our gross income and applied to every product and service we consume. We all hate to pay tax but we are directly or indirectly paying it almost daily. Due to this, we do not realize how to legally reduce tax liability. This is because the government has made discriminative tax rules. The rich are aware and take advantage of it whereas the poor or the mediocre are the victims of the taxes.
The Regressive Tax System:
The tax system is pretty regressive. It imposes too much tax on the gross income of the hard earners of the house who strive for a better living and fulfill their necessities. On the other hand, there is little tax or the same percent of the tax imposed on the rich which does not create any difference for them. The salaried employees have to face all kinds of deductions from their earned salary but the rich businessmen take is as their expense and later on, they can recover it.
If you think over it you might realize that the value of money is just a piece of paper. This means its value is no greater than a paper. We also don't know how to value money. We just know that it can be used in the exchange of goods and services. But this is the intrinsic value of money. What else is there instead of this common exchange system? The value of money is, therefore, not only intrinsic. It can be exchanged in return too. That is why money has no value but is only valued for the exchange of goods and services. The value of the currency has only one common purpose. So the more goods and services are purchased, the more value of money increases and vice versa.
The Illusion Of Money In Tax:
The other major facet of money illusion is in tax. This is the tax which is deducted from our gross income and applied to every product and service we consume. We all hate to pay tax but we are directly or indirectly paying it almost daily. Due to this, we do not realize how to legally reduce tax liability. This is because the government has made discriminative tax rules. The rich are aware and take advantage of it whereas the poor or the mediocre are the victims of the taxes.
The Regressive Tax System:
The tax system is pretty regressive. It imposes too much tax on the gross income of the hard earners of the house who strive for a better living and fulfill their necessities. On the other hand, there is little tax or the same percent of the tax imposed on the rich which does not create any difference for them. The salaried employees have to face all kinds of deductions from their earned salary but the rich businessmen take is as their expense and later on, they can recover it.