Posted on 12/06/2012 9:04:34 AM PST by SeekAndFind
This “250,000” crap is not indexed for inflation, so before long it will hit low earning people. And this is intentional.
I thought they wanted to raise taxes on a TAXABLE income of $250,000, not a gross income of $250,000.
Oh no,,don’t send these two to Texas! No thank you!
“This couple works in the financial services industry, which is located in New York or a few other big cities.”
NYC is not the only place for people who work in this industry so knock it off. You say yourself other big cities in other places have offerings,,and guess what? It would be hard pressed to find another big city in a different state that is going to tax them MORE...
(San Fran,,maybe)
They are not chained and even if they are, it could not have been a surprise..so they are whining pure and simple
This is precisely correct. If you choose a career that takes at least a decade to train for, you have lost a significant amount of potential income during that training period. This is the case for many who trained in medicine , for example. Once you get a ‘real job’ you want to make up for lost years, and have to pay off loans. While you're trying to play catch up you are labeled as ‘rich’ and become a target for the Obama crowd. It's a wonderful reward for making a decision to delay gratification and try to achieve something.
While you can get banking jobs anywhere, their particular area of expertise will get a job in New York, Chicago, or maybe San Francisco. Note that all are expenses places to live.
This is market forces in action. Look at the Dakotas to see it happening now. They are having an oil boom and, gosh oh gee, housing costs have skyrocketed. What a surprise!
It will ALWAYS cost more to live where there are high paying jobs. Their problem is that taxes take a bigger bite the more you make (in general). Here in New Mexico if you make $100K a year you are doing pretty well AND you are keeping more of what you make. I was making $100K in South Florida and barely paying my bills. Here you can live as well on $50K, but of course the jobs that paid $100K in SoFla pay $50K here!
So why move to the lower price area? Income taxes are Federal, so your rate on $50K is less than your rate on $100K. You keep more, as a percentage, living in a lower cost of living area.
I believe that the income tax should be replaced by a consumption tax which is not levied on necessities. This would help tap into unreported income resulting from cash only transactions that sometimes occurs. Combined income for Hubby and I has always been less than $100,000. When we first married, we were so poor we could have qualified for several Federal benefits, but never signed on, preferring to maintain independence.
So that's my bias. I agree that $250,000 is not so rich in expensive cities, and have pointed that out to others when discussing Obama rhetoric. I hate this class warfare crap, and have learned to hate the words “fair share”.
Now to your current situation:
Perhaps you should reconsider the 401k contributions? If I understood you, you are saving for a house and not contributing to the 401k. If you make the 401k your savings for retirement and down payment for your house combined, there might be some advantages. A company match is like haveing your employer help pay for part of your down payment.
Start with the current amount you are setting aside for this savings. In the future, channel all raises into this too. This will lower your taxable income which means more money in your pocket so to speak and helps starve the beast. Part of this money would have just gone for taxes anyway.
Also, you will have an automatic good return that first year due to the Company match. If your employers have a decent stock option or purchase plan, likewise use that to get at least the company match, unless the stock is worthless with no future.
When you have enough for the down payment, you may be able to withdraw it without penalty for the purpose of buying a house, as Congress has discussed often, and down the road, that may be possible.
Even if that is not possible, most companies will allow you to borrow from the 401k and set up repayment arrangements - you will pay yourself interest.
If all else fails, you might have to pay a penalty in the same year that you get a huge mortgage interest deduction assuming you close in January and the laws don't change.
There are lots of things these two can do that don’t involve changing the tax code. I don’t think waiting for someone to “level the playing field” is a good financial strategy.
First, they should be maxing the 401k on both sides. 401k’s are usually matched by the employer making them increase much faster than simply saving up.
Second, student loan interest is somewhat lower than credit card interest in most cases. They could aggressively pay off the card balances as fast as possible while stretching out the student loan payments.
Even at a tax rate of 40% they would still have 150000 per year. They say the rent is 3000 a month so that says 36000 a year. 401k’s are often limited to four percent so if they maxed them that would be 10000. Student loans of 20000 at 8% paid off over ten years would be around 225 a month or 2700 a year.
Add that all up and they still have 100000 a year for all that living. That is very close to my and my wife’s combined gross income. We have debts too and costs and don’t have 1600 for a “fun trip.”
Close examination suggests that this woman has nothing to complain about and I actually wonder why anyone is bothering to read her sob story.
I have been using Share cropping also for a few weeks now. It is a perfect description of our situation. Share cropping went from 50 to 70% to the landowner. This is what many are now facing.
Yeah, they ought to move out of New York and loose their jobs and get food stamps like all the rest. /s
Cost of living is also VERY high in Alaska, gotta ship everything in, But Im here because I can get a job. Lots of people don't want to work 12 hour days / 7 days a week in 30 degree below zero temps hundreds of miles from a road.
Job is good... You take it where you can get it.
Compare an individual business owner with a Chapter C Corporation. The business owner pays his business expenses, then pays his taxes on net income at the individual rate.
The rest of the money is available to him to spend for needs, wants, or reinvest in the business.
If that same business owner changed to a C Corp. he would pay taxes on the net profit at the corporate rate, (which could be more than the individual rate), and have even less money to spend and/or invest due to owing additional capital gains taxes.
Any dividend distributions would be taxed at the relevant Capital Gains Tax rate on top of the Corporate Rate. This is the double taxation often referred to.
If there were only a handful of owners of the stock of the company, it would be feasible to have each owner pay his portion of the corporate taxes on his individual return.
However, when there are millions of owners, the Government prefers to just deal with one entity-The corporation. So the Corporation pays the owner's share. Since it is never assigned directly to the individual share owners, people loose sight of this reality.
When corporate taxes are raised, they are actually raising taxes on all individuals and entities that own stock, but that impact is just lost in the shuffle.
In addition to being a double taxation, Capital Gains is inherently unfair in this country because it is not indexed.
Purchase something for $50,000 for example, and if inflation has doubled the value to $100,000 you will pay Capital Gains on what is essentially phantom profits.
By way of illustration, if you wanted to sell your home and build another using the same exact materials, you would not be able to, because you would need $100,000, and after paying the capital gains tax you would not have $100,000 to do so.
Also, retired people have in the past have often relied heavily on dividends particularly when CDs are paying little interest. Raising the Capital Gains impacts more than the Rich, and it discourages business investment.
If any change is made to capital gains taxes, it should be to zero. If the rich aren't paying enough taxes, then tax their net worth. All this other gobbledy gook just hurts middle income and/or poor people, and business development.
Someone needs to tell these constitutional illiterates that there is an annoying provision in Article One that taxes must be uniform throughout the several states. Therefore a cost of living adjustment is unconstitutional. Senator Chuckie Cheese also needs to relearn this fact as he constanttly calls for the cost of living adjustment.
Hey! I represent that remark! :-)
Moved here from Maine 20 years ago. Wouldn't change a single thing. If I wanted to live in a NE dump, I'd have stayed in the NE.
Now, if I can only get my Mother-in-Law (I married a native) to stop introducing me as "That Yankee Republican".......
Wrote this like I was writing directly to the person complaining - not you S&F.
Why is it suddenly the responsibility of everyone who is successful to stop being successful to help fund the massive spending spree of the illegal Congress without a budget?
Shouldn’t those who bounce checks spend time in the pen?
There is a reason they call it CONgress.
I don’t really have any sympathy for them. I’m just saying that those other options aren’t really available. I used to work sort of on the fringe of the financial industry as a lawyer, and while there are probably a few jobs here and there in significantly less expensive cities like Chicago and Houston, the great majority of U.S. jobs in “securities litigation” and “private equity” are still in NYC, and then maybe in California (equally expensive).
Of course they could change careers entirely, but that ain’t all that easy either. Those are very specialized sub-fields, and it’s a very unwise career move to step down from developing a mastery of complex, high stakes securities litigation to competing against every ambulance chaser and DUI defender out there, trying to hustle up enough dough from people who don’t have it to make your law school loan payments.
You can also blame them for their original life choices, and yes, it is idiotic to take out hundreds of thousands of dollars in educational debt that can only be paid back by working in a vary narrow set of high-wage jobs, but understand that those sorts of decisions are made at the age of 19, 20, 21, not exactly a time when most of us have very much in the way of perspective on the world.
LOL. Yeh, when Hubby and I were saving up we didn’t buy any new clothes or yard sale ones either. Never took a trip or vacation - found a way to make extra money during the vacation time the company gave us.
Never even spent a dime on an ice cream cone. Never ate out even for special occasions. Ate mostly beans and taters or rice with cornbread and a slice of onion for supper. Other cheap protein and veggies for other meals.
Never steak or expensive seafood not even for special occasions cooked at home. Never bought a loaf of bread, since making it at home was cheaper. Did the laundry by hand to save on visiting the laundry mat.
Finally did get a hand me down washer and dryer when parents bought a new set.
We had a black and white TV hand me down and an old old radio, and a deck of cards for entertainment. Never bought a book or anything else we could check out from the library.
Lots of ways to save money that could be explored by this poor little overtaxed person. We have always made a lot less than $100,000, and paid in at the 40% rate when considering all the taxes. A person needs figure out how to get the goals in spite of the system-not whine about it.
“For wealthy liberals it must be nice to be at the top, pull up the ladder behind you, and pat yourself on the back for being so giving advocating higher marginal tax rates - when they have already accumulated a huge amount of assets - and the taxes are on those attempting to accumulate assets over their working life.”
You have painted a portrait of Warren Buffet. Spend a lifetime building enormous wealth using every available tax strategy to limit your taxes. Once you achieve your place on a pedestal amongst the one percent of the one percent move all your assets to tax sheltered trusts and then run around advocating higher taxes on anyone who might possibly challenge your legacy. Knock down all the ladders.
Any city in which the financial services industry exists as a big employer is going to be expensive. New York is not the only one: try living in San Francisco, Miami, Chicago or any other major city and you’ll find that there’s little difference. And you really cannot telecommute for everything. People still have to be on the ground and working in face to face groups for important decisions and current information.
Why do people here hate NYC so much? I grew up there and it’s a great place. If the GOP had any of those round things and believed in its message, there might actually be GOP voters there (because nobody likes being taxed to death, which is what happens to you in NYC and NY State). But we ceded the territory to the Dems long ago, and I have voted in many elections where there was literally no local GOP candidate on the ballot. This is probably true in many areas, and is something that needs to be addressed.
That said, why are Freepers out there cheering for higher taxes and telling people they should move if they don’t like them? Especially Federal taxes, because no matter where you move, you have to pay them.
Hard to feel sorry for people like this: most of them voted for and back Obama.
So smile and pay your taxes.....
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