Chores & Taxes

As kids are going back to school, many of us are looking for systems to help the hustle feel a little bit easier. Over the years, I’ve experimented with lots of reward systems to motivate chores, good habits, and schoolwork effort, typically in the form of points, stickers, or popsicle sticks that can be used to ‘buy’ special treats.

But once kids can save up points endlessly for special indulgences, the motivation inevitably fades.

Because for kids who already have their needs met, there’s no real demand to keep earning more.

On the flip side, there’s a huge demand for us to motivate our kids to take on more chores and learn to be industrious contributors to the family, and eventually to their world, as they grow.

I recently learned what we may be missing…

Tax.

When kids need to pay a monthly fee – their contribution to getting to enjoy the material benefits of the household – you instantly create a demand for your chosen currency. When they don’t pay, they lose privileges.

This is exactly parallel to our own financial lives in the real world.

We pay taxes to enjoy the material comforts provided by the government: roads, bridges, parks, schools, and so on. When we don’t pay, we get in trouble.

At first brush, it can seem ridiculous to charge your kids a ‘tax’ to live in your house. But we already want and expect kids to do the work of contributing to the household. And again, we’re talking points, stickers, and popsicle sticks, not cold hard cash.

Now, I’m not sharing this today only as a means of giving you a back-to-school parenting tip, though there may be some genius to a system like this (and I’ll definitely be experimenting with it).

I’m sharing it because, according to modern monetary theory, this is exactly how our own government-backed currency works.

The almighty dollar would be no different than cryptocurrency (or popsicle sticks) if the government didn’t 1) act as the sole creator and supplier of dollars and 2) charge us a portion of those dollars back through taxes. If the IRS started collecting special popsicle sticks, we’d be looking for jobs that paid in those popsicle sticks, and government contracts would pay in popsicle sticks, and so on.

The tax creates the value of (i.e., the demand for) the currency.

I’ve only just started reading on this topic, but wanted to share this first nugget that I thought was kind of a mind-bender with you all… because think of this:

If you want your kids to be productive, you’d keep plenty of popsicle sticks in circulation—more chores, more earning—because it creates increasing value for the household. Think about that with government spending: does shrinking spending (to reduce the deficit) by reducing federal employment, federal programs, and federal contracts (all ways of spending dollars into the private sector) actually shrink the overall economy? I’m still early in learning how inflation fits into this monetary perspective (it’s central, but I’m still reading), but thought I’d share this mind-bender with you today. Hit reply and let me know how this strikes you.