Tax time can be a great time to assess state of your household finances

Tax policy has moved toward the top of the political agenda in Washington, D.C. To help pay for its ambitious domestic agenda, the Biden administration wants to, among other things, raise the top income tax rate to 39.6% from its current 37%.

In “A History of Taxation and Expenditure in the Western World,” authors Carolyn Webber and Aaron Wildavsky contend that the income tax is “a paradigm of responsive democracy at work.” I like that idea.

In a somewhat similar vein, preparing your taxes is a paradigm of the household budget at work. It’s an opportune moment to take stock of household finances, to think about your household budget and to look closely at longer-term goals. After all, you have gathered much of the financial information you will need for a detailed household income-and-spending review. There is a wealth of household information to tap within a tax return, including your income, investments, many expenses and…