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Frank Lee 09-13-2011 09:10 PM

Reconsidering the wisdom of home ownership
 
It seems to me there are many people out there who's sole function in life is to dream up new ways to extract money from property owners. :mad:

I pay for schools I have no kids in; not only that but the schools are back at the trough continually for more money.

Soon I will be paying for an airport I never use. The biggest local bidness also had a crosswind runway added which results in a flight path over my house that wasn't there before. This airport has been in operation since the '30s and a few years ago they feel the need for a crosswind runway? I wonder how many flights had to divert due to the lack of said runway over the years... I'd wager .000001%. Actually I've already been paying for airline service to this airport I never use thanks to a federal program called Essential Air Service. They subsidize every seat to the tune of hundreds of dollars, every flight, every day. And the vast majority of flying customers out of this airport are for local bidness- most who are on non-bidness flights go to other airports because in spite of the huge subsidy the flights here cost more.

Soon I will be paying for a drainage ditch project that will have no effect on the water table on my property. However, the farmland way upstream will see a nice benefit.

A local activist group of sorts wants to build a community pool. No doubt I will have to pay for that too.

The street just got resurfaced- not that it needed it. But who cares when free money pays for it all. :rolleyes:

In our State there has been a shift away from state aid for this and that which means the funding for local stuff isn't as subsidized which means no, the locals aren't gonna cut anything; they're gonna jack up the property taxes and that happens whether the value of one's real estate is in the crapper or not.

Many other taxes are relatively easy to opt out of: don't like restaurant taxes- don't eat out. Don't like fuel taxes- don't buy fuel, and so on. When one has decided to not be a renter anymore you become a big fat sitting duck for all manner of scoundrels who seek to get a chunk of your change.

One doesn't have a whole lot of say in these things. Oh yes, I go to the meetings, in fact there is another one tonight, but this saying has been proven true time and time again: Meetings are not where decisions are made; meetings are where decisions are announced.

Cd 09-13-2011 10:09 PM

Thanks for the useful post Franks.
From time to time I look at houses without thinking of things like this.

gone-ot 09-13-2011 10:42 PM

...find an Island somewhere in the middle of the ocean and declare yourself "King" and pay everything to yourself.

...of course, eventually, all those subsidized trans-oceanic flights and sea voyages might seem worthwhile (or not), depending upon how much of a Howard Hughes "hermit" you want to be.

Frank Lee 09-13-2011 10:46 PM

I heard some billionaire put his island up for sale. Probably out of my price range.

jamesqf 09-13-2011 11:50 PM

Quote:

Originally Posted by Frank Lee (Post 260904)
IWhen one has decided to not be a renter anymore you become a big fat sitting duck for all manner of scoundrels who seek to get a chunk of your change.

But you'd still be paying for all those things if you rented: they'd just be part of the rent instead of a separate bill.

Frank Lee 09-13-2011 11:54 PM

I should have said, everyone who wants to live in housing that isn't under a bridge.

I've been a former tenant and a former landlord as well. I really, really did not appreciate paying property taxes at 3x the non-homestead rate on the rentals. That meant I was paying about 15x more for Mr. Cottontail's 7 kids' education than he was. :mad:

dcb 09-14-2011 12:15 AM

I don't begrudge contributing to education in the US. Yah it could be more efficient, but without getting too political, I don't want a country full of idjits neither. I don't want a country where quantity of life supersedes quality either, but would might need some chinese-style number of kids law.
The rest of it sounds like a racket though.

Frank Lee 09-14-2011 12:30 AM

I would be less inclined to complain about education funding if they weren't back at the trough every other year with another levy increase request.

Ehhhh.... I take that back. Back when I did a lot of bidness flying, I could absolutely count on the local superintendent being on the flight too! I guess he had to run down to the state capitol every week to beg for more money. Speaking of superintendent pay... :mad:

Thymeclock 09-14-2011 01:54 AM

I've always thought of property taxes as the equivalent of paying rent to the government. Sure, it is said that technically you 'own' the property, but we all know what will happen if you don't pay the annual tax levied.

I live in a citified area and the only benefit I get for my whopping tax bill is street lighting and garbage collection. Supposedly it also covers the cost of police services, but since it's a decent neighborhood there isn't much need for protection.

The only small consolation is that the RE tax paid is deductible on your income tax return. And what do I get for THAT? :rolleyes:

NachtRitter 09-14-2011 02:25 AM

You could always take advantage of the taxes others are paying (property, income, sales, etc)... collect unemployment, live in homeless shelters, collect food stamps, take advantage of all the low income subsidies, and so on... heck, you've probably been paying out most of your life; might as well try to get some of that back!

;)

Frank Lee 09-14-2011 03:16 AM

They have stuff for people with no dependents? :eek:

FastPlastic 09-14-2011 04:40 AM

I hear ya on this one. I just voted no today on a plan to spend $65million to demolish a couple schools and build new. They didn't even bother to finish the plans before they added it to the ballot. I loved the way they claimed it would only add about $6 a month on to most home owners, but that's because the $53million dollar taj mahal middle school is almost paid off and would be reducing our taxes next year. Did I mention the population is only 50,000, of which 50% are college students?

Don't get me wrong, I love owning my house and I have no problem supporting the K-12 education system even though I have no kids, but someone needs to put these people in their place.

Frank Lee 09-14-2011 04:54 AM

The modus operandi in this state (and probably everywhere) is to knock down all the neighborhood schools, build a Taj Mahal out on the edge of town, and then wonder why there's traffic congestion twice a day by the school when all the parents are there dropping off/picking up (Parents say rides are needed these days because of all the child predators out there. I think the odds of any child predation around here are about the same as that of getting hit by a meteorite). More by-products of this wisdom are: now there's a federal govt program to encourage walking and bicycling to school :rolleyes: by spending millions on new sidewalks; but the one I love most is all the bussing, not only around town, but between districts up to about 40 miles away, every day??? :confused: :mad: I would like to see the statistic on money, time, and fuel spent on bussing today vs 40 years ago. Yeah, when I was in school, when you lived in a school district believe it or not, that's where you went to school!!! :eek: Oh, and then there is the sprawl. A period of time elapses from when the little school on the prairie is built, and new housing developments spring up all around it. Classic case of rotting the community from the core as there is lots of housing and business standing empty in the middle of even this small town.

Arragonis 09-14-2011 09:52 AM

Just out of interest what is the average total taxes people pay, e.g. how much on property taxes vs value and how much income goes in taxation and how is it calculated in different places ?

We have 4 types of basic government tax here.

user removed 09-14-2011 10:32 AM

It would take a College degree in Calculus to figure out how many taxes we pay in the US.

Fed income
State income
FICA
Medicare
State taxes on vehicle purchase
Licensing
Vehicle property tax
Home property tax
Sales tax
Meals tax
Taxes on electric usage
Taxes on water usage
Taxes on Internet
Taxes on cable TV
Taxes on vehicle gas
Taxes on home gas
Tolls
Taxes on interest income
Taxes on dividend income
Taxes on inflation hidden as cap gains
Taxes on cap gains

Anyone care to add any more, I am sure there are probably hundreds.

We own our home outright and I built the home. Presently appraised at $320k, cost me 180k to build, plus 16 months of my life without a paycheck.

Now the gubmint (Frank's term) is making my cash savings worthless with inflation and my home ownership worthless because they are subsidizing incompetence by irresponsible banks and borrowers.

WOW, I can hardly believe spell check corrected me on gubmint, I had two Bs in the word!

regards
Mech

user removed 09-14-2011 10:34 AM

Quote:

Originally Posted by Arragonis (Post 261006)
Just out of interest what is the average total taxes people pay, e.g. how much on property taxes vs value and how much income goes in taxation and how is it calculated in different places ?

We have 4 types of basic government tax here.

I think the current total taxes paid takes 100% of US income until late July or early August.

regards
Mech

jakobnev 09-14-2011 10:42 AM

Quote:

Originally Posted by Frank Lee (Post 260904)
A local activist group of sorts wants to build a community pool. No doubt I will have to pay for that too.

To get your moneys worth i suppose you could go pee in it every now and then.

gone-ot 09-14-2011 12:47 PM

Quote:

Originally Posted by jakobnev (Post 261017)
To get your moneys worth i suppose you could go pee in it every now and then.

...and, if you get caught, simply tell them you're performing a citizens' "...test of the efficacy..." of their "purple" dye urine-test stuff (wink,wink)!

Arragonis 09-14-2011 01:47 PM

Quote:

Originally Posted by Old Mechanic (Post 261013)
I think the current total taxes paid takes 100% of US income until late July or early August.

regards
Mech

What kind of proportion of income is it though, typically ?

gone-ot 09-14-2011 02:06 PM

...it's varied over the years:

http://upload.wikimedia.org/wikipedi...2875-05%29.JPG

...the Organisation for Economic Cooperation and Development (OECD) in
Paris said in 2004:

29.7% = U.K.
30.0% = U.S.A.
44.2% = Denmark
48.3% = France
50.7% = Germany

...more info:

2009 data: http://www.oecd.org/document/59/0,37..._1_1_1,00.html

2001 data: http://www.nationmaster.com/graph/ta...-single-worker

Thymeclock 09-14-2011 02:34 PM

Quote:

Originally Posted by Arragonis (Post 261049)
What kind of proportion of income is it though, typically ?

Not everyone has income, so the question is not universally relevant. However, for those who do depend on income from working for a living, I would guess it is close to 100%. For those in debt it is more than 100%, as evidenced by personal bankruptcies brought about by credit card and mortgage debt that exceed what the person can ever pay off, for the accumulated debt exceeds the person's predicted income and assets.

Americans save very little because there is no incentive to save. Currently banks are paying far less than 1% in interest on a savings account. Historically the interest rate had averaged around four or five percent.

Also, as old Mech said, if you were to add up all the taxes you pay in various known and hidden forms, the rate is outrageously high - we are taxed when we earn money, we are taxed when we spend money, we are taxed for having money (as in the property tax), we are taxed if we give it away (gift tax) and we are taxed when we die (estate tax).

The only folks who like taxes are those who are on the receiving end of a benefit. If Peter is robbed to pay Paul, Paul will think it's a wonderful idea and Peter will think otherwise. :(

SoobieOut 09-14-2011 03:07 PM

Frank, you and everyone else bring up some good points here.

Since I have no dependants, I pay higher taxes for schools then those who have 6-10 kid (big familes in Utah).

If i pay off the Mortgage, my taxes go up, since I would lose the Mortgage interest deduction.

So it seems that there are some of us in the USA who bear a greater burden for taxes then those who actually use the services.

Here's a link to the Tax freedom day

Tax Freedom Day - Wikipedia, the free encyclopedia

Keep in mind that that is just federal taxes, some taxes are compunded, meaning you pay the Federal tax, then there is a sales tax on the money you have already been taxed on.

If you add up all of the taxes it is more than 50% of your income. And the government is bankrupt?

Makes me really angry when I read that huge corporations like GE paid no taxes last year!

Makes living under a bridge and riding a bicycle sound better all the time.

dcb 09-14-2011 03:21 PM

As long as we are including the kitchen sink, religion is also used as a tax dodge here in the states. http://t1.gstatic.com/images?q=tbn:A...BUXd1lu7SqkHfg

Humble Mr. Osteen doesn't pay a dime in income tax, yet the property taxes alone on his new house are $260,000.

Arragonis 09-14-2011 05:30 PM

Quote:

Originally Posted by Thymeclock (Post 261057)
Not everyone has income, so the question is not universally relevant...

I'm confused - maybe.

This could stray into politics though, I'm trying to steer it away but apologies if I don't. :rolleyes:

Here (UK - Scotland) I pay income tax which varies with the amount from 0% to 20%, 40% and ultimately 50% of my salary (I don't earn enough for the last 2 BTW). I don't see the tax money as it is taken before I actually get any money. It's called PAYE, Pay As You Earn - a nice, friendly way of uk.gov taking my money bit my bit.

ON TOP of that I also pay National Insurance - actually so do my employers for the benefit of employing me - which is supposed to pay for the NHS and my state pension. It actually goes to pay the pensions of people who are getting them now. And anyway some of my income tax also pays for that as NI is not enough - older population nowadays.

I also pay VAT (sales tax) of 20% on most things I buy - some exceptions include food and childrens clothes, up to age 12 I think - which is just odd. Also oddly I don't pay VAT on takeaway food but I do on food when I eat in - so if I go to McDonald's and take my food out it is 20% cheaper than if I sit in. Actually thats not too bad a deal :D But as I eat at McD's once a decade maybe not.

VAT is also charged on domestic bills so thats phone, internet, gas, electricity. For fuel specifically (diesel and petrol) I pay a "special" fuel tax which more or less doubles the price, oh and then I pay VAT on the total including this tax - double bubble for uk.gov. Again that pays for the NHS and so on.

I also pay a property tax of around 1500 a year which is for the local council, and in Scotland includes some other charges such as water supply and waste removal (sewers). In some places water charges are based on usage (i.e. a meter) but here in Scotland we still have a government owned national water supplier.

My local taxes are also supposed to pay for all local services such as fire, police, education etc. but of course there isn't enough so actually councils get about 75% of their money from the government, i.e. my taxes. Less of course the cost of administering the millions of ways councils can get money. There is also a second hit on this "administration" because the uk government collects all taxes and then passes the scottish bit to the McGovernment which then passes it to councils.

I wish I had trained as an accountant - seems a secure number to me.

As many people from history have suggested, the only things we can rely on happening to us are birth, death and taxation. Taxation seems an established (there are records of it circa 5000 BC) required evil of living in civilisation of any kind so I don't begrudge the idea of taxation itself.

What level it should be and what it should be paying for is a debate - here I like the NHS but in the US this is not as popular - that is a difference, as is the argument about whether people without kids should pay for education - I think they should and I did before I had any children and before I planned to.

What we can agree with is that we all want our taxes to pay for the services that are required and for nothing more - the cake but no icing. In the US that means the examples Frank gave, and others no doubt - here it is expense claiming MPs and public sector union bosses on 0.5m a year renumeration, and council cheifs earning more than the prime minister that make me wonder where it is all going.

And thats before I start noting the additional charges on things like my energy bills to pay for "green stuff" which is usually useless, or like domestic recycling - even though it would be more efficient (and cost less) if we just dumped waste in a bin and let the waste collection companies sort it out.

Same sh*t, different continent.

jakobnev 09-14-2011 06:16 PM

Quote:

Originally Posted by Old Tele man (Post 261038)
...and, if you get caught, simply tell them you're performing a citizens' "...test of the efficacy..." of their "purple" dye urine-test stuff (wink,wink)!

I think i have a new nickname for you: Rainbow

gone-ot 09-14-2011 06:57 PM

Quote:

Originally Posted by jakobnev (Post 261077)
I think i have a new nickname for you: Rainbow

...I "lived" thru the 1960's so "tie-dyed" might work too!

user removed 09-14-2011 10:53 PM

Quote:

Originally Posted by Arragonis (Post 261049)
What kind of proportion of income is it though, typically ?

If you pay 100% of your earnings to the various taxes until the end of July, every year, then you are paying 7/12ths of your income in taxes of the various sorts. About 58% (just a rough guess based on some assumptions).

When Harry Truman left the US Presidency, he sold his memoirs for $400k. The post WW2 tax rates skyrocketed as the US actually tried to pay off the enormous debt from WW2. Max rates were 93%. Old Harry got about 10% of his $400k after Federal taxes.

There was no pension for the President at the time he retired, so he lived on his military pension from service in WW1.

Compare that to what Clinton has made after his two terms and the pension he is paid.

Heck there are some people living in certain areas of the country that are paying 30k in property taxes per year on a 500k home.

regards
Mech

jamesqf 09-15-2011 12:59 AM

Quote:

Originally Posted by Old Mechanic (Post 261120)
If you pay 100% of your earnings to the various taxes until the end of July, every year, then you are paying 7/12ths of your income in taxes of the various sorts.

I don't know about that. I've never worked it out in detail, but I don't think I pay anywhere near that much. But of course I don't live a conventional lifestyle, so miss some of the taxes that hit those that spend every last dime.

You know, though, it's not the paying that I mind nearly so much as what gets done (or in the case of things like education, not done) with the money.

darcane 09-15-2011 03:56 AM

Quote:

Originally Posted by Old Mechanic (Post 261012)
It would take a College degree in Calculus to figure out how many taxes we pay in the US.

Fed income
State income
FICA
...

Fun thing with FICA is that it's a 6.2% (well temporarily down a little now) tax that you see on your pay stub... but there is also a 6.2% tax that your employer pays as well. They don't do this out of the kindness of their heart, they are required to do so and pay you less to cover it.

So, your gross income is cut down by this tax without most people even being aware of it.

Arragonis 09-15-2011 06:26 AM

Worth a check :

Tax Freedom Day - Wikipedia, the free encyclopedia

The US one is 9th April, the UK one 30th May. Burden is calculated as 26.9% US and 40.9% UK.

Frank Lee 09-15-2011 08:07 AM

Whatever the percentage- which I think too high- I don't like dropping thousands of dollars for stuff that doesn't even remotely benefit me when I don't even drop thousands of dollars ON MYSELF!

toc 09-15-2011 09:59 AM

I hear you Frank.

Governments in many nations waste so much money on pointless programs that deliver little to no good, or even increase tax requirements through mismanagement or poor implementation.

I see words like 'feasibility study' used by our own Ronald McDonald headed government and wonder what on earth is to study. But, the price tag on the study is the real annoyance - $100 million. $50 million. $x million.

It either is, or is not, feasible, and it sure as heck does not ever take anywhere near $1 million of someone's time to determine the feasibility of such an idea.

You can't argue about investing in schools though, there will forever be a need to invest in the future of our kids, and the dynamic world they will grow up in. I can see the need for updating materials and teachers, and in some cases significantly dated buildings.

Our multiple layers of excess government really are where the fat could easily be trimmed. I think that easily relates to the USA as well? Federal and State governments all sitting at the tax bank account making withdrawals without second thought..?

This annoys me just as much as http://www.thingswelovetohate.com/20...ed-demand.html

user removed 09-15-2011 10:01 AM

Taxes are intentionally hidden by the gubmint as other charges. The FICA Medicare tax is 15.3% total for the self employed. That applies to the first dollar you make, even if you worked a year to earn that dollar.

Anyone who thinks the employer matching contribution is not a part of your total compensation is delusional, and any calculation that does not include the total is just wrong.

Around here meals are taxed at close to 11%. Delaware used to have a max state income at 16%. New Your City even has an income tax, above the state and Federal income taxes.

They have dribbled us to death with increased taxes. In WW2 the Fica rate was 1% employee and 1% employer. Do you think an employer does not consider his FICA payment as a part of your compensation? Try being an employer for a while and see how that works for you.

If you purchase any item from a store or manufacturer you are paying for all the taxes they accumulated in providing that product to you.

As I said earlier it would take some serious work to just get a decent estimate of all the taxes you pay. The fought the revolution to stop taxation on taxation. Today's best example is a pack of cigarettes, which in VA you pay sales tax on the total cost per pack which is probably 87% tax already. A bottle of booze costs about $1 to produce, all the rest of the money you pay is tax. Christ (haven't heard anything from Him lately) in a restaurant today they are charging $2 for a glass of soda. The tax on that is 20 cents, probably more than the soda cost the restaurant in bulk dispensers.

Never forget we live in a country that is run so stupidly that they loose money manufacturing money itself. A penny costs more to make than it is worth. They should not exist in today's economy, just another gubmnt boondoggle.

regards
Mech

jamesqf 09-15-2011 01:22 PM

Quote:

Originally Posted by Old Mechanic (Post 261188)
Anyone who thinks the employer matching contribution is not a part of your total compensation is delusional...

Especially if you're self-employed, and have to fill out that Form 1040SSE every year.

Which reminds me: I need to mail off the quarterly estimated tax check today :-(

FastPlastic 09-15-2011 01:47 PM

Quote:

Originally Posted by jamesqf (Post 261209)
Especially if you're self-employed, and have to fill out that Form 1040SSE every year.

Which reminds me: I need to mail off the quarterly estimated tax check today :-(

Just sent mine in yesterday, don't you love the fact that the dates are spaced irregularly? 4months here, 2months there. Wouldn't it be nice if it was just every 3 months?

Arragonis 09-15-2011 04:01 PM

This is a merkin thread, so I will bale out now.

NachtRitter 09-15-2011 05:41 PM

Quote:

Originally Posted by Frank Lee (Post 261171)
Whatever the percentage- which I think too high- I don't like dropping thousands of dollars for stuff that doesn't even remotely benefit me when I don't even drop thousands of dollars ON MYSELF!

Agreed! If I am being forced to pay, then I'd at least like to be able to choose where most (if not all) goes, even at a macro level... There are certainly some "defense" related programs that don't deserve any of my $$

Thymeclock 09-15-2011 10:39 PM

Quote:

Originally Posted by Arragonis (Post 261240)
This is a merkin thread, so I will bale out now.

I don't mind that you bale out if you so desire, but if you use words that are of dubious meaning like "merkin" I will ask for an explanation.

Thymeclock 09-15-2011 10:58 PM

Quote:

Originally Posted by Old Mechanic (Post 261188)
As I said earlier it would take some serious work to just get a decent estimate of all the taxes you pay. The fought the revolution to stop taxation on taxation. Today's best example is a pack of cigarettes, which in VA you pay sales tax on the total cost per pack which is probably 87% tax already. A bottle of booze costs about $1 to produce, all the rest of the money you pay is tax. Christ (haven't heard anything from Him lately) in a restaurant today they are charging $2 for a glass of soda. The tax on that is 20 cents, probably more than the soda cost the restaurant in bulk dispensers.

Never forget we live in a country that is run so stupidly that they loose money manufacturing money itself. A penny costs more to make than it is worth. They should not exist in today's economy, just another gubmnt boondoggle.

regards
Mech

Here's a better example of the rate of taxation, taken directly from my latest phone bill:

Monthly charge for dial tone 15.80
Verizon local calls 2.88
Current charges subtotal $18.68

Taxes, Fees and Other Charges
Federal Excise Tax .80
NY State and Local Sales Tax 2.44
911 Surcharge 1.00

Verizon Surcharges and Other Charges and Credits
Federal Universal Service Fee .92
NY State and Local Tax Surcharges 1.52
FCC Line Charge 6.38

Total Taxes, Fees and Other Charges $13.06

Total Charges... $31.74

I am paying $13.06 in tax on a bill of $18.68. Do you realize what percentage of the entire bill is tax?

If not, use your calculator and tell us the rate of tax levied on this bill. :mad:

user removed 09-15-2011 11:54 PM

Quote:

Originally Posted by Thymeclock (Post 261307)
I don't mind that you bale out if you so desire, but if you use words that are of dubious meaning like "merkin" I will ask for an explanation.

It's Ebonics ;).

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, after you pay all the other taxes before you get a paycheck to pay the property taxes.

regards
Mech


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