Will taxes go up Jan 1, 2013?

[grbeck]

Not necessarily true. I live in Forsyth county GA. It's one county away from downtown Atlanta (Fulton county) but is still part of the metro Atlanta area. When we built our house 17 years ago it was the fastest growing county in the nation. My property tax is around 60% of what I would pay in Fulton county which is only 3 miles away. Our schools are FAR better than Fulton county and most other schools in the Atlanta area and the entire state. My house is on a bigger lot yet costs 20% less. We have far less crime than Fulton county and better infrastructure. The tradeoff is more traffic if you have to commute to downtown.

 

There are many reasons why people want to live in a particular area and it doesn't always mean less crime or better schools. It has far more to do with image and access to infrastructure, public transportation, restaurants, night life, events, etc. It also has to do with availability of new building sites.

 

Living in expensive areas is a lifestyle choice, not a requirement to be safe or get a good education.

 

The South is different from the Northeast and California. Note that, in the article, the Texas city was the one where the couple was able to still come out ahead even with an increase in the federal income tax. Also note that the cities named - Bethesda, Glendale, Huntington - are suburban communities, and are NOT located in the central city. Those cities are comparable to your home in Fulton County. Which is why those families moved there. But the cost of living in any of those areas is much more expensive than it is in Georgia or Texas. That is the point of the article.

 

The entire New York City metropolitan area, Washington, D.C. region and southern California are expensive by national standards. Some areas are cheaper than others, but there are reasons for that.

 

But there are no "cheap" areas by national standards. Are you suggesting that the leave these areas entirely?

 

My brother lived in the Washington, D.C. area for about a year, and was looking for a house. He ended up taking a transfer to Kansas because any house in a decent area that didn't require a commute in excess of one hour was simply out of his price range. He and his wife could buy a cheaper place, but it would inevitably be in a more dangerous area, or much farther out of the city.

Edited November 14, 2012 by grbeck

[NickF1011]

The cost of living varies because lower-cost towns generally have inferior schools, longer commutes, higher crime rates, or all three. It's not as though Community A in Southern California has a high cost of living and offers great schools, plenty of employers within easy driving/walking distance and low crime rates, while Community B has a much lower cost of living and offers all of the same amenities. There are solid reasons that some areas - particularly those in major metropolitan areas - are more expensive to live in than others.

 

You may save money on housing living in Community B, for example, but, if you have children, private school tuition will eat up those savings.

 

Using Bethesda, MD as an example (I don't live very far from there), you have dozens and dozens of cheaper areas within 10-20 miles that all still have great schools, low crime, and plenty of employers. People who choose to live in Bethesda do it because they have money and the property there is nice. Simple as that. There really aren't a whole lot more benefits to it compared to many other neighboring towns.

[grbeck]

Using Bethesda, MD as an example (I don't live very far from there), you have dozens and dozens of cheaper areas within 10-20 miles that all still have great schools, low crime, and plenty of employers. People who choose to live in Bethesda do it because they have money and the property there is nice. Simple as that. There really aren't a whole lot more benefits to it compared to many other neighboring towns.

 

They be "cheaper" relative to Bethesda, but I doubt that they are cheaper relative the rest of the nation, or even southcentral Pennsylvania.

[akirby]

They be "cheaper" relative to Bethesda, but I doubt that they are cheaper relative the rest of the nation, or even southcentral Pennsylvania.

 

Nobody was arguing that certain parts of the country were more expensive than others. But within each community you have many choices as to where you live and the cheaper areas do not necessarily have higher crime or worse schools. If you choose to live in a higher cost city or county that's your choice but it's certainly not a requirement.

[NickF1011]

They be "cheaper" relative to Bethesda, but I doubt that they are cheaper relative the rest of the nation, or even southcentral Pennsylvania.

 

Of course not, but considerably cheaper enough that it would not be particularly difficult to live off a $250,000+ annual income. Heck, I get by just fine 45 minutes away from there earning far less.

Edited November 14, 2012 by NickF1011

[FiredMotorCompany]

Back to taxes going up......

 

Is it too extreme to hope the Mayans were right?

[the_spaniard]

Regardless of how anyone feels about presidential candidates the existing congress has an approval rating lower than whale shit.

They all need to go.

 

This I agree with.

 

I really, really hope they cab learn to compromise.

[FiredMotorCompany]

Obama said today that he agrees we need to compromise. Then immediately refused to compromise on tax increases for the top 2%.

 

Can you say, "First to Gridlock"? Of course the House will say they refuse to sign off on those tax increases.

 

Who's more interested in making points than settling? Obama's got nothing to lose. Why be so bull headed. Be the bigger man and concede for the sake of the middle class!

[grbeck]

Nobody was arguing that certain parts of the country were more expensive than others. But within each community you have many choices as to where you live and the cheaper areas do not necessarily have higher crime or worse schools. If you choose to live in a higher cost city or county that's your choice but it's certainly not a requirement.

 

But that was the point of the article. There are really no "cheap" places located within certain metropolitan areas (primarily in California and the Northeast), just some towns that are "less expensive," which often come with big drawbacks. Compared to most states and towns throughout the nation, however, ALL of those communities in those metropolitan areas are expensive.

 

The cost of living in Georgia, or even the Atlanta metropolitan area, tends to be cheaper than in the Northeast or California. That is why it has been growing so fast. Southern cities have a lower cost of living general than their Northeastern or Californian counterparts. If every metropolitan area in the nation mirrored Atlanta and its suburbs, this wouldn't be an issue. But, they don't, so, it is.

Edited November 15, 2012 by grbeck

[grbeck]

Of course not, but considerably cheaper enough that it would not be particularly difficult to live off a $250,000+ annual income. Heck, I get by just fine 45 minutes away from there earning far less.

 

You're single and don't have any children, so your experience really isn't applicable.

 

The article specifically focused on a married couple with children, as the proposed $250,000 threshold for tax increases applies to the income of married couples, not the income of an individual.

 

Priorities and expenses change once children arrive. School districts become much more important - you won't settle for an unsafe one - and you'll need a bigger house. And your tolerance for things such as blight and crime will drop significantly.

Edited November 15, 2012 by grbeck

[FiredMotorCompany]

Why is everyone so fixated on the "rich"?

 

Unless criminal conduct is involved, how much money someone else has is not our concern.

 

The concept that all men are created equal.....unless they make more than $250,000/yr. is abominable.

[akirby]

But that was the point of the article. There are really no "cheap" places within certain metropolitan areas (primarily in California and the Northeast), just some areas that are "less expensive." Compared to most states and towns throughout the nation, however, ALL of those communities in those metropolitan areas are expensive.

 

The cost of living in Georgia, or even the Atlanta metropolitan area, tends to be cheaper than in the Northeast or California. That is why it has been growing so fast.

 

If you take that chart and put 2 columns in for each city - one downtown in prime real estate and another one 20 miles away in the suburbs - you'll get much different break even points. It's possible to live in a suburb of an expensive city and have the same financials as downtown in a less expensive city.

 

Along with the higher cost of living in certain areas (Atlanta vs. LA or NY e.g.) comes higher salaries which offset some of it.

[akirby]

You're single and don't have any children, so your experience really isn't applicable.

 

The article specifically focused on a married couple with children, as the proposed $250,000 threshold for tax increases applies to the income of married couples, not the income of an individual.

 

Priorities and expenses change once children arrive. School districts become much more important - you won't settle for an unsafe one - and you'll need a bigger house. And your tolerance for things such as blight and crime will drop significantly.

 

I believe that outside of a few really atrocious school systems that have lots of crime or other distractions, it's not the school that matters as much as the students. If the student is willing to learn and put in the work to get good grades they will. If they're not then it doesn't matter how good the school or the teachers are. Some schools may be better suited to help kids individually but that's something the parents could provide with tutoring. I think most people choose private schools for religious reasons or for social acceptance. Personally I think kids educated in public schools experience much more diversity and are much better able to deal with the real world.

[grbeck]

If you take that chart and put 2 columns in for each city - one downtown in prime real estate and another one 20 miles away in the suburbs - you'll get much different break even points.

 

The article chose those suburbs because that is where couples making those incomes live. And, somehow, I don't think that the communities in and around New York City really want those people to move in response to a tax hike at the federal level.

 

It's possible to live in a suburb of an expensive city and have the same financials as downtown in a less expensive city.

 

People in these areas can't simply uproot their families and move to that less expensive city at a moment's notice.

 

Along with the higher cost of living in certain areas (Atlanta vs. LA or NY e.g.) comes higher salaries which offset some of it.

 

The higher wages don't completely offset the higher cost, as the article noted:

 

Consider, for example, the tab for the same assortment of ground beef, tuna, milk, eggs, margarine, potatoes, bananas, bread, orange juice, coffee, sugar and cereal: In Twin Falls, Idaho, $23.41. In New York City in December of 2010, you would have to shell out 72 percent more, $40.29, according to The Council for Community and Economic Research. That higher percentage carries across all expenditures, from child care costs to haircuts.

 

Of course, housing costs are one of the biggest variables. In Glendale, the Joneses can live reasonably well – but not extravagantly – in a three- or four-bedroom home valued around $750,000. In Twin Falls, you would need to spend about half as much on an equivalent home.

 

I've known people who make almost twice as much as my wife and I do and who live in New York City, and don't have our standard of living.

[akirby]

I've known people who make almost twice as much as my wife and I do and who live in New York City, and don't have our standard of living.

 

And who held a gun to their heads and told them they had to live in New York City?

[grbeck]

I believe that outside of a few really atrocious school systems that have lots of crime or other distractions, it's not the school that matters as much as the students. If the student is willing to learn and put in the work to get good grades they will. If they're not then it doesn't matter how good the school or the teachers are. Some schools may be better suited to help kids individually but that's something the parents could provide with tutoring. I think most people choose private schools for religious reasons or for social acceptance. Personally I think kids educated in public schools experience much more diversity and are much better able to deal with the real world.

 

In Philadelphia and Harrisburg, people send their children to a private school because they want the child to actually learn something and not worry about him or her coming home with serious injuries every day. My friend who lives in Philadelphia calls the public school system a "Gladiator Academy." People send their children to private school out of desperation, not solely for religious reasons (that may influence the TYPE of private school they choose) or status.

 

My wife teaches in the Harrisburg Area School District, as does her cousin. We are looking for house, and real estate in Harrisburg is cheaper than in the suburbs. We aren't even looking at a house there, because of what she sees in the schools every day.

 

These problems are spilling out into school districts that directly adjoin both cities. That is why our house is on the market. Believe me, we prefer to send our children to a public school, but if we are somehow still here within two years, you'd better believe that we'll scrape and save to send our daughters to a private school (which, by the way, will wipe out the cost advantage enjoyed by real estate in the town).

 

My wife is in full agreement. And she's a public school teacher.

Edited November 15, 2012 by grbeck

[grbeck]

And who held a gun to their heads and told them they had to live in New York City?

 

That's where a lot of the jobs are. O

 

f course, many middle-class people are following your advice and ARE moving from those areas. And many companies have noticed that they can pay employees less if said employees live in other areas. Employees, meanwhile, enjoy the same (or an even higher) standard of living.

 

I remember reading that a Philadelphia-based company wanted to move employees to the Dallas-Forth Worth region. The pay was lower in Texas, so employees initially balked. But then some of them calculated the cost of living in Texas, and realized that they would come out AHEAD, even with lower pay.

 

The problem is that the Northeastern and Californian cities are becoming further divided between the very rich and the poor, without much of a middle class.

 

Somehow, I don't think it was the intent of President Obama to accelerate this trend with tax hikes, but, that is what could happen.

Edited November 15, 2012 by grbeck

[goinbroke2]

The Army tells me where I'm going to live...but I digress hehehe.

 

Look, we're kind of going off topic to a certain extent. Regardless of how close to the poverty line $40, 80, 250,000 is...income going up on everybody equally is fair, income going up on a select few is not.

 

The problem is, we've jumped past the "fair or not" and jumped to arguing the cut off point. This is the same as the global warming crowd jumping past the difference of "global warming" and "man made global warming" and just spouting that any warming is caused by man now. It's been pushed so much that if you mention the earth is heating up automatically "global warming" imply's "man made".

 

So, what is the answer?

How about remove tax free deductions? Oops, wait a minute, if I can't offset my income with a deduction to the food bank, I don't give to the food bank...and the food bank screams because donations are down.

How about taxing dividend income the same as regular income? Oops, then who will invest in companies who are offering dividends as well as several other issues?

How about across-the-board increase in income tax...oh wait, that just hammers the person working more and does nothing to the unemployed/welfare/etc

 

The only REAL way would be to raise the income on everybody equally and cut entitlements a certain amount. People yell they want entitlement cut the same amount as spending but that's just partisan politicing. It should be cut the required amount, if that is more or less than taxes so be it. The bottom line is, the two combined have to equal a balanced budget.

 

Please tell me we can all agree the budget needs to be balanced???

And can we agree that once the budget is balanced it must be slowly brought into a surplus situation to pay off the national debt??

Is that too much to ask?

 

Everybody laughed at greece and said they had to suck it up, they spent way more than they brought in....guess what...look in the mirror.

 

(as a side note, Canada just announced it won't have a balanced budget until 2014 now, and the lib's are all in a tizzy, what hypocrites)

[NickF1011]

You're single and don't have any children, so your experience really isn't applicable.

 

The article specifically focused on a married couple with children, as the proposed $250,000 threshold for tax increases applies to the income of married couples, not the income of an individual.

 

Priorities and expenses change once children arrive. School districts become much more important - you won't settle for an unsafe one - and you'll need a bigger house. And your tolerance for things such as blight and crime will drop significantly.

 

 

Even with kids $250,00 is plenty to live comfortably in all but a select few "uppity" areas of Maryland. If you have problems making ends meet with $250K, you're living beyond your means.

[FiredMotorCompany]

A recent CNBC article "The Millionaires Who Pay the Highest Tax Rate" and Washington Examiner editorial "Examiner Editorial: If top 5% paid 40% of taxes, what is their 'fair' share?" make several points I agree with.

 

However, until there is a "flat tax" or "fair tax" or other equitable system, the low and middle class will continue to pass their "fair share" of tax burden upon others via their voting strength. Mob rule.

And deficits and exploding rates of expenditures will continue because that voting majority has no vested interest where the money goes or where it came from.

 

For example, a taxpayer earning $30,000 annually pays no income tax according to the articles above. Why would they care if taxes went up to 100% on the rich? or the middle class? And even on themselves?

 

But for those earning $100,000 to $10 million or so, taxation definitely is an issue. The problem they have is their voting power is diluted by party affiliation or apathy.

 

I can hear the compassionate liberals calling for mercy on the poor as an excuse for not taxing the low-income or no-income citizens. Well, if they saw a commensurate reduction in services or benefits (OH, GOD NO!!!!! What are you saying? How DARE you mention the reduction in services for the "poor") they would be more interested in how the revenue and spending is handled.

 

10%, 17%, 20% or whatever number is used, everyone has equal standing as a citizen, and an equal responsibility to participate in funding the operation of the government. Until that happens, there will only be more of the same as we have seen.

[Marginal Economist]

Talk me out of taxing savings. End deductions on 401K and IRAs. Raise taxes on capital gains.

 

Either the government collects more tax dollars or people save less and spend more, spurring demand.

 

It is a progressive tax as the bottom 50% aren't saving anyway.

[RangerM]

Talk me out of taxing savings. End deductions on 401K and IRAs. Raise taxes on capital gains.

Either the government collects more tax dollars or people save less and spend more, spurring demand.

It is a progressive tax as the bottom 50% aren't saving anyway.

Taxing 401ks and IRAs may disincentivize saving moneys there, but taking money away from people doesn't cause them to spend more. (The government might spend more, though) The people just find more creative ways to avoid the taxes. If my 401k/IRA is taxed, I'd simply put more money into a Roth IRA (or tax-exempt bonds) to avoid taxes. OR, I'd have to demand higher returns in my investments to offset the taxes.

 

A consumption tax is a progressive tax, and encourages the bottom 50% to consume less and save more.

[Marginal Economist]

Taxing 401ks and IRAs may disincentivize saving moneys there, but taking money away from people doesn't cause them to spend more. (The government might spend more, though) The people just find more creative ways to avoid the taxes. If my 401k/IRA is taxed, I'd simply put more money into a Roth IRA (or tax-exempt bonds) to avoid taxes. OR, I'd have to demand higher returns in my investments to offset the taxes.

 

A consumption tax is a progressive tax, and encourages the bottom 50% to consume less and save more.

 

It doesn't appear that taking away the tax benefits would change savings rates for the majority - Article - it seems we are too lazy to make the changes.

 

How would you demand higher returns? You can do 2 things with money - save it or spend it. If I make saving more expensive, most won't do anything about it and the ones that do will spend more.

 

Do we want the 50% to consume less? If I'm making 30K and have a family of 4 I'm not saving more.

[RangerM]

It doesn't appear that taking away the tax benefits would change savings rates for the majority - Article - it seems we are too lazy to make the changes.

 

How would you demand higher returns? You can do 2 things with money - save it or spend it. If I make saving more expensive, most won't do anything about it and the ones that do will spend more.

 

Do we want the 50% to consume less? If I'm making 30K and have a family of 4 I'm not saving more.

Please re-read what I said. I didn't say taxing 401k/IRAs would change (overall) savings rates. I said it would alter where people put their investments. (lower returns that result from higher taxes, mean people may make riskier investments) In my case, I'd save more in a Roth (to avoid taxes on capital gains). Higher taxes also means that I have less disposable income to spend, therefore I would spend less.

 

If you're making $30K and have a family of 4, your wife is also probably working. Noone should have two kids in the first place (nor should they own a Mercedes, a $200k house, or eat out a lot), if the total household income is $30k.

Edited November 28, 2012 by RangerM

[Marginal Economist]

Please re-read what I said. I didn't say taxing 401k/IRAs would change (overall) savings rates. I said it would alter where people put their investments. (lower returns that result from higher taxes, mean people may make riskier investments) In my case, I'd save more in a Roth (to avoid taxes on capital gains). Higher taxes also means that I have less disposable income to spend, therefore I would spend less.

 

If you're making $30K and have a family of 4, your wife is also probably working. Noone should have two kids in the first place (nor should they own a Mercedes, a $200k house, or eat out a lot), if the total household income is $30k.

I don't even think it would change where most people put there money. Majority of people have no idea where there money is.