Reconsidering the wisdom of home ownership

[jamesqf]

Originally Posted by Old Mechanic

It's Ebonics .

Well, no: Merkin - Wikipedia, the free encyclopedia

I was watching a tv show one night and they were talking about property taxes on $500 k homes. In one state it was 6 percent. That's $30k...

Depends on the state, though. I pay a couple of thousand, on a place that was valued at about $500K at the top of the market. (Not what I paid for it, though, nor what it'd sell for now.)

[solarguy]

I'm one of those evil self employed "rich" people. My wife works full time too.

We don't look rich.

I certainly don't feel rich.

We live on a budget.

We drive older cars.

I make my own biodiesel to run my car, truck, heat my house, heat my shop.

I use each razor blades for a month, and then resharpen and use for another two weeks.

We buy clothes at goodwill.

I cut my own hair.

By the time I pay all my taxes (big ones, little ones, hidden ones and secret ones), they take more than half of everything I make. That's using a good accountant and paying everything on time. If you mess up, or get behind, the interest and penalties add on pretty fast.

We are penalized because we paid our house off. I got penalized because my income was too high, so I couldn't claim my student loans as a deduction. I think currently we get penalized because I married my wife, not just live-in.

We are "making it" fine, and have a plan to retire with dignity, but, given my/our lifestyle, and how hard we work, we ought to be stinking rich.

And too bad my son will have a big chunk of it lost to taxes when I die. Many family farms and ranches are lost every generation now, because when dad dies, the kids can't pay the taxes and have to sell it.

Sort of the beginning of the federal income tax was to pay for WWI, and it was graduated from 1% up to $10K, up to 6% for rich folks. It was pitched as temporary, "just to pay for the war effort".

Funny, never went away, and went up fast. At one point FDR want to raise the marginal tax rate on rich folks to 100%. The stafff had to explain it to him why it wouldn't work, that they would just stop working, since they would receive no money.

This all comes from grotesque amounts of government spending, at historically unprecedented levels. Unsustainable levels really.

And after all the charade of the debt ceiling fiasco and multiple trillion dollar "cuts", somehow the federal budget still is going up every year for the forseeable future.

Neither party seems interested in spending less than they take in.

Private schools routinely educate kids at substantially less cost per student, with better teacher/kid ratios, and produce kids that routinely score better than pub-ed kids on any standardized test you care to mention:

http://www.goldwaterinstitute.org/article/1908

The whole public education thing is tragic and sad and wasteful, not just for the money either.

Whatever is happening in Greece now, that's what's going to happen here in the second half of 2013. Mark it on your calendars.

Good luck.

troy

[Clev]

Originally Posted by solarguy

Funny, never went away, and went up fast. At one point FDR want to raise the marginal tax rate on rich folks to 100%. The stafff had to explain it to him why it wouldn't work, that they would just stop working, since they would receive no money.

And now we've gone to the exact opposite corner. Trust fund rich kids who have no salary but millions in capital gains each year pay 15% tops, while I pay 25% and barely manage to pay my bills every month. That's fair.

[SentraSE-R]

Lots of false "facts" in this discussion. Old Mech's 7/12 and Thymeclock's 100% tax burdens jump out as gross exaggerations when the real tax burden is 28% per the Wiki Tax Freedom Day link.

I'm surprised no one has mentioned the elephants in the room. Something like 75% of our federal tax burden goes to pay for the past borrowing that past Presidents and Congresses have done - with the notable exceptions of Clinton, Carter, and Nixon in my lifetime, and to pay for the costs of the continual cost of the undeclared wars we foment and participate in.

[jamesqf]

Originally Posted by SentraSE-R

...and to pay for the costs of the continual cost of the undeclared wars we foment and participate in.

(Sigh) Politics again :-( Ought to be obvious to anyone who's bothered to learn a bit about world history (which unfortunately seems to rule out upwards of 90% of the American public) that the US didn't foment the current war, and couldn't have, since it was going on in one form or another for over a thousand years before the US was founded. Participation, in one form or another (and I'm not claiming the current participation is anywhere near optimal) was forced on the US by a long series of unprovoked attacks.

Nor has most of the money been spent on anything resembling actual war. It's gone for "democracy building", payoffs to local warlords &c, with a healthy slice diverted into the pockets of politically-connected contractors.

[Arragonis]

Originally Posted by jamesqf

Well, no: Merkin - Wikipedia, the free encyclopedia

Ahhh. I had not monitored this thread since I had removed it from my list.

The word quoted has been used online and in print in my experience in a shortened term for "American" however on glancing at this thread I wondered what the fuss was about. After seeing the link (above) I realise the word has different meanings.

My, what a sheltered life I have had these 40+ years.

What I meant was "American Biased" which this discussion on taxes has become (IMHO - not a conclusion), and not the other meaning.

My misunderstanding is entirely my fault.

So deepest apologies to all who may have followed the link or taken my use of the word as an insult about the subject matter, that was not my meaning - and apologies to Frank about what may have been understood by my use of that word.

Anyway, checking out now. Except of course I have just resubscribed so I may be back.

[Thymeclock]

Originally Posted by SentraSE-R

Lots of false "facts" in this discussion. Old Mech's 7/12 and Thymeclock's 100% tax burdens jump out as gross exaggerations when the real tax burden is 28% per the Wiki Tax Freedom Day link.

That's just the income tax portion. There are many other taxes, both hidden and overt that we are paying. Did you read some of our other posts that enumerated them?

How about my paying $13.06 in tax on phone bill of $18.68? The bill I cited is fact, not fiction. The taxes and surcharges total a rate of 70%!

Or is it that some folks are so accustomed to paying exorbitant taxes that they just don't want to face it, and consider it "the cost of doing business"?

[Clev]

Originally Posted by Thymeclock

That's just the income tax portion. There are many other taxes, both hidden and overt that we are paying. Did you read some of our other posts that enumerated them?

How about my paying $13.06 in tax on phone bill of $18.68? The bill I cited is fact, not fiction. The taxes and surcharges total a rate of 70%!

Or is it that some folks are so accustomed to paying exorbitant taxes that they just don't want to face it, and consider it "the cost of doing business"?

Not quite. According to the FCC:

Charge for Network Access (Subscriber Line Charge):

This charge covers the costs of the local phone network. This charge may appear as “FCC Charge for Network Access,” “Federal Line Cost Charge,” “Interstate Access Charge,” “Federal Access Charge,” “Interstate Single Line Charge,” “Customer Line Charge” or “FCC-Approved Customer Line Charge.” The FCC sets the maximum allowable Federal Subscriber Line Charge. This is not a government charge or tax, and it does not end up in the U.S. treasury.

So, basically, Verizon is passing along part of the cost of their network and making it look like a tax. The FCC mandates the maximum amount that they're allowed to hide this way, hence "FCC Line Charge."

If you put that $6.38 charge in the bill where it belongs, you're paying $6.68 in taxes on a bill of $25.06, or 27%.

[Clev]

Originally Posted by Arragonis

The word quoted has been used online and in print in my experience in a shortened term for "American" however on glancing at this thread I wondered what the fuss was about. After seeing the link (above) I realise the word has different meanings.

That meaning has nothing to do with it. The "Merkin" as you used it comes from our previous president, who couldn't pronounce "American" properly in his speeches. (See also: "nukular")

[darcane]

Originally Posted by SentraSE-R

Lots of false "facts" in this discussion. Old Mech's 7/12 and Thymeclock's 100% tax burdens jump out as gross exaggerations when the real tax burden is 28% per the Wiki Tax Freedom Day link.

I'm surprised no one has mentioned the elephants in the room. Something like 75% of our federal tax burden goes to pay for the past borrowing that past Presidents and Congresses have done - with the notable exceptions of Clinton, Carter, and Nixon in my lifetime, and to pay for the costs of the continual cost of the undeclared wars we foment and participate in.

Er, 75%?

We're making no effort to pay down our debt, just paying interest. For 2010 that was $164 billion, see graph of Obama's 2010 federal budget:


A whopping 4.63%...

However, our rates have been depressed for a while (ZIRP FTW!) and eventually the markets will force this upwards and that percentage is gonna skyrocket.

DoD is 18.74%

No, the elephant in the room is our mandatory social spending. If you cut EVERYTHING (totally eliminate DoD, close all the military bases, no wars, no dept. of Energy, no Dept. of Education, shut down the White House, no DoT, no HUD, etc.) and only funded Social Security, Medicare, Medicaid, and Welfare/UE plus pay interest of our debt, we will STILL be running a deficit.

These four programs plus interest make up 61.4% of our budget ($2.18 Trillion) and there were only $2.16 Trillion in revenues for 2010. The rest is borrowed.

BTW, there was some trickery with Clinton's "surplus" too. It was only a surplus if you ignore that he (like the presidents before him and after) was pulling from the Social Security fund. Most people believe there is some pool of money that we're going to start dipping into now that Social Security is starting to spend more than it brings in. This isn't true, it was already spent and is just a pile of I.O.U.s.