First Student Loans and now Mortgages

[weeniegeniewife]

cut spending and let people keep the money they have earned.

yes!!!!!

[diggitydot]

Found it!

http://www.itepnet.org/whopays.htm

If you want to avoid the ridiculously large PDF, you can check out each state here.


Details for WA:

http://www.itepnet.org/wp2009/wa_whopays_factsheet.pdf

[Michele]

I don't think it's fair to factor debt into classifications of wealth. Yeah, combined Russ and I have a ton of student loan debt, but should that debt be considered differently than if it was consumer debt? I don't think it should be. I could've not gone to vet school, worked a mall retail store, earned my way up to management, probably even regional management or higher and be making a similar salary without any of the debt. (I know someone who was a regional manager of Afterthoughts.) I chose to incur that debt, just as we chose to incur the consumer debt associated with living middle class in Dallas and having three children on a fellows salary.

I think 250K is wealthy. Maybe there should be another delineation above that though for taxes....

My sister was griping about people not paying taxes and how unfair it was....until I pointed out that *she* doesn't pay taxes....all that money she gets back? Yeah. She had no idea. I'll wager that most of America really doesn't understand how taxes work. And as an aside, I kinda think it's not cool to be collecting govt handouts and whine about Democratic spending. (I knew a few of those in Louisiana.)

[MissCrabette]

I'm still sick so please excuse my disjointed post.

* Whether or not 250k is "rich," it is an amount that most Americans won't ever earn. Like DCJenn said, 100k is a pipe dream for most. Of course it doesn't FEEL rich to most medical families who have gone without for so long and are finally starting to enjoy the fruit of their labor and sacrifice. It's only natural for spending to match income, which brings me to another point.

* It doesn't matter what your neighbors are earning, getting back in taxes or buying. You don't know their financial situation other than what they tell you. Chances are good that they are in debt up to their eyeballs, so stop comparing yourselves to them. Maybe they got a tax refund because they foolishly overestimated their taxes for the year. Maybe they lost a job and their income dropped. Maybe they gave a free loan to the US government just so they could feel "rich" come refund time. Maybe they didn't get a refund at all and they lied to you about it to justify a purchase.

* Let's not confuse the issue further by bringing corporations into it. This is about personal income taxes. Surely you remember how difficult things were during medical school and residency. There's only so much you can tax the people at those income levels.

* As for those getting a "free ride" courtesy of the government, that really sucks, but please try to remember that it's for a limited time. You can't draw unemployment benefits forever. If they choose to use it when they have other options, they're also hurting themselves by not saving it for a truly dire situation. Yes, they're gaming the system, but the government doesn't have the manpower to investigate every single case. What would they do? Interview friends and family as if for a security clearance?

* Lastly, yes costs should be cut. Everyone says that. Where would you like to cut costs? Schools? Roads? Police? Military?

[Sheherezade]

Very interesting site!

I think part of the problem is that we make brackets for income and then we make assumptions based on those brackets. There are a lot of different stories reduced down to one statistic. For example, I just looked at the Ohio info. The top 1% makes 352,000 or more. BUT, when they say the average income for the top 1%, it is 995,000 a year. 995,000!!?! Average??? Obviously, lots of people in that top 1% are leading a very different life. Hell, half of them make MORE than 995K.

I like Heidi's definition - although it isn't very functional. When you've got money working for YOU instead of you working for money, that's RICH. In this town, there are many with that type of wealth. It is very very different. They don't work. They just HAVE.

I'm still in favor of a completely different tax structure in this country. I agree that everyone needs to pay in - which is why I think a VAT would be preferable to raising income tax rates. Sales taxes always hit the lower brackets more and they also can be controlled by your choices. You don't have to buy a Porsche and it's extra tax. You can buy a Ford Focus and pay less. Or you can not buy something. I think the VAT proposals also eliminate the tax on "necessities".

[diggitydot]

Everyone pays taxes, even if they get a refund on their federal ones. When you purchase gas, mail a letter, license your car, get your driver's license, get married -- those fees are all taxes. Even people who don't own homes pay property taxes in the form of their rent. Higher property taxes (and more costs to the property owner) equal higher rents.

I'm not saying peeps in specific socioeconomic groups should get a pass on their taxes, but I think we all sometimes forget about all the incremental daily taxing that adds up quickly.

[DCJenn]

But don't forget that the tax code (which desperately needs to be redone) also is geared toward people of means- the deductions for mortgages, the credits for student loans, etc. are all targeted to the middle income earner who has come to expect those deductions. We're getting another HUGE tax return this year and I'm not the least bit sorry about it.

That said, I also pay a ridiculous amount in property taxes because the state doesn't collect income tax (almost 9k this year, if anyone cares.) Should I begrudge the renters in Texas? If I should, I don't. I made the choice to purchase a home. The fact that my property taxes have increased by thousands of dollars since we moved in is frustrating when they're also gutting the education system in Texas. But, I blame the Legislature, not the people who live in the apartments around the corner and especially not the people living in the subsidized apartments across the street (disabled and elderly housing run by the San Antonio Housing Authority.)

And honestly, the working poor of this country are more than aware of the inequities. Do YOU have to pay for public transportation costs because you can't afford a car? Do you have to work two jobs just to pay the rent? Most poor people are busting their butts to get by. Most poor people are not sitting on their butts eating bonbons. Sure there are people who have the welfare entitlement problem- but there are a whole lot of really, really rich people who do nothing and are paid handsomely for it (Kardashians anyone?)

Across the board generalizations do not help. The fact is that MOST Americans will never ever make the kind of money that we will in the medical world. Even after the expenses, none of us who have physician spouses (attendings) will ever have to worry about buying a new car, feeding and clothing our children or paying for whatever we decide we want. We may struggle and we may have to budget but if I decide to do something like send my kid to private school because the of gutted SAISD, I can do it.

(I guarantee that the people in the apartment complex around the corner won't be able to make that choice.)

Jenn

[Michele]

The convo w my sister was in regards to federal taxes. Though I will admit I don't fully understand taxes as a general subject.

[PrincessFiona]

I understand your argument, Jenn. It is one of the reasons that my voting record is very similar to yours. At the same time, people have choices they can make about going to college just like we did. FYI I earned 7k a year working part time with my masters. The most I could expect here is ~37k full time. My degree choice. I don't expect someone else to make up the difference.
I did not do residency and fellowship and don't owe 200k for the privilege (and hell yes educational debt should be considered!).
I made my choice, Jenn as did you. We knew the potential earning ability.
I'm in the process of applying to an MA program in counseling psych. My goal is to work with underserved populations. I imagine making very little, but I can afford to do that with dh's income.

[Vanquisher]

I understand what you are saying, Michelle, about not including debts in there. For taxation purposes, no, I do not think they should be included. I was speaking more of the perception of being rich. In order to really be rich, I think you have to be able to not worry about money and debts would be a part of that.

I remember when we were in medical school and when we were looking foward to residency (I know, right?). Anyway, 40K seemed like such a lot of money then!!!

I just don't think you can assign a definite number to "rich." If I were to assign it, though, I would say around 500K-$750K per year at a minimum. I know full well that 100K is more than most people will make. That doesn't mean that it is "rich" though.

[poky]

This. The top 2% of income earners pay 98% of everyone's taxes. Ridiculous.

Actually, not quite. Of federal tax, the top 1% pay about 25%, and the top 5% pay about 40% (or did, in 2004/5), according to the chart on page 7 here: http://www.cbo.gov/ftpdocs/88xx/doc8...alTaxRates.pdf

[houseelf]

I would be all for a graduated removal of the home interest deduction if it was equally applied to all income levels. Great Britain slowly eradicated this artificial subsidy of the real estate market over a several year period. Contrary to all doomsday economic predictions, home ownership actually increased after the program was completed. One of the many facets of the current real estate crisis is the fact that people were/are financially incentivized to purchase a home that they might not have otherwise because of this significant tax savings. Amongst myriad consequences, this has created the unfortunate effect of a less mobile workforce now that everyone is strapped to their negative equity investments called their homes.

Returning to the point at hand, I'm resentful as hell that the AMT negates our ability to claim our children or our student loan interest deductions. I honestly wouldn't mind paying a lot of taxes if everyone contributed some amount, no matter how nominal, as a representation of each citizen's obligation to participate fully in society. I like the analogy that my judge used for her personal policy of ordering child support for each and every noncustodial parent regardless of their financial hardship. The judge felt that even a nominal amount of $25/month altered the perception of all parties involved regarding responsibility. In one case, a soldier had incurred a traumatic brain injury and was a quadrapalegic (sp?) whose extensive health and occupational expenses exceeded his income. Even under these extraordinary circumstances, the judge obligated the noncustodial father (through his sister/intervenor) to pay his ex $50 per month for the financial support of his three children. This monetary obligation creates a different relationship in which responsibilites, obligations, expectations, and involvement are expected by all parties.

IMHO, taxes are a direct parallel to child support.

[PrincessFiona]

applauds kelly! This exactly!

[SuzySunshine]

See I'm so glad I put this in the debate forum - I agree with the lines of Heidi's argument and I also agree with the fact that it is locational. In our current location $250K would definitely be considered rich. If we went back to CA where we did med school, no way! The other thing that I'm thinking of isn't so much our school debt but how much money we're going to have to save to retire and put our kids through school. I know the argument is that they can put themselves through school but higher education is getting ridiculously expensive.

Keep discussing, good debate!

[SoonerTexan]

I'm going to play the Devil's Advocate as far as Corporations go...I believe (though I need to look it up) that the US has one of the highest tax rates for corporations already. Raising them isn't going help the economy and more jobs will go overseas.

It's easy to equate "corporation" with "small group of corrupt, overpaid executives" and forget the thousands of employees and shareholders that really make up most of it. In most cases, I truly believe that CEOs deserve their 1 million+ salaries (though of course there are exceptions) and that corporate jets are actually quite necessary in most cases. When someone has THAT much responsibility on them and works 24/7, you better bet they should be well paid and not be wasting time on the airlines.