View Full Version : I don't qualify as poor any more.....
gimmethesimplelife
4-26-21, 2:06pm
Recently I had a bit of a shock - scratch that. A real shock. I looked up what the house I co-own is worth and I was STUNNED. Truly I am not poor at the moment. I have no idea what to make of this other than being flooded with guilt - but also a little relief. Rob
iris lilies
4-26-21, 2:29pm
We here have known that for a long time Rob, that you’re one of the privileged.
ApatheticNoMore
4-26-21, 2:36pm
And why guilt? By a lot of measures you are plenty middle class but a lot of measures don't pay the bills, and what matters in the here and now is things like: Can the bills get paid? Are basic needs met? Any extra for saving and discretionary purchases? If you can get the basics met AND have any real degree of savings or discretionary income then you probably aren't poor (people will define this at the most minimum - oh you have $20 in savings you aren't poor, oh you have a cell phone you aren't poor, but give me a break, that's not how anyone really uses these terms). There is a federal poverty rate, it's probably too low, but also incomplete if it's not taking into account more local cost of living, and assets.
My house has increased hugely in value over the past year.
This doesn't help me pay the bills at all, as I live in the house, and it generates only expenses, not income.
ApatheticNoMore
4-26-21, 3:14pm
A house does help pay bills in the sense that one ISN'T paying rent, so it should count as income equivalent of exactly what the rent to live in a similar dwelling would have been, as one would need that additional income otherwise. Of course then there is property taxes.
Do you still live in the house or have you moved in with your SO? If it's an income producing property, welcome to the world of well-to-do, If it's not producing income, don't dwell on it's value as it's worth nothing till it's sold.
Leave the guilt for the more deserving and enjoy the fruits of your labor.
On paper, I'm a swell, but in reality...:D
A house does help pay bills in the sense that one ISN'T paying rent, so it should count as income equivalent of exactly what the rent to live in a similar dwelling would have been, ...
I think I've read about some places that proposed charging "income tax" on the imputed income from living in a home you own. Wow.
I think I've read about some places that proposed charging "income tax" on the imputed income from living in a home you own. Wow.
People who think bureaucrats are dull and uncreative should spend some time dealing with taxing authorities.
I think I've read about some places that proposed charging "income tax" on the imputed income from living in a home you own. Wow.
That would turn me into a renter REAL fast.
ApatheticNoMore
4-26-21, 6:45pm
It's basically owners equivalent rent:
https://www.investopedia.com/terms/o/owners-equivalent-rent.asp
https://www.bls.gov/opub/btn/volume-2/owners-equivalent-rent-and-the-consumer-price-index-30-years-and-counting.htm
Suppose person A pays $1000 a month in rent. Suppose person B pays no rent as they own a home but pay $500 in property taxes and other expenses of owning. Person A has to bring in $500 a month more in income to pay expenses. So it is like income. Of course if property taxes and necessary repairs are MORE THAN rent then they need more income. That's why the poverty level might not apply (how many houses does Rob own again? several last I heard). But in most cases the poverty level is poor, people under the poverty level are in the vast majority of cases poor period. They don't own a ton of assets generally. And it's not a lot of income pretty much anywhere.
The 2021 federal poverty level (FPL) income numbers:
$12,880 for individuals
$17,420 for a family of 2
$21,960 for a family of 3
$26,500 for a family of 4
$31,040 for a family of 5
$35,580 for a family of 6
$40,120 for a family of 7
$44,660 for a family of 8
I don't spend $9/day on Starbucks coffee. I only spend $3/day because I make my own coffee.
So that's $6/day in income I get from that! Probably should report that on my 1040....
ApatheticNoMore
4-26-21, 6:50pm
Well noone needs coffee of any sort made or bought. Shelter is usually considered one of those basic needs things. As is healthcare, so if Rob considered himself poor when he didn't have healthcare I can understand that.
I pay imputed income tax on the value of my employer provided life insurance in excess of $50,000.
iris lilies
4-26-21, 7:03pm
Well noone needs coffee of any sort made or bought. Shelter is usually considered one of those basic needs things. As is healthcare, so if Rob considered himself poor when he didn't have healthcare I can understand that.
Good for you! You have been drinking the Corey Bush koolaid. She is my newly elected
representative to Congress and she declared last week that housing is a basic human right.
Either bae will have to open his giant home to occupants of the gubmnt’s choosing, or he will be taxed in some way by the feds on that asset. I guess it is inevitable.
I wonder how much house we will be allowed to own without taxing it?
Rob, you likely have Hispanic neighbors who have noticed their homes have gone up in value. Do you think THEY would be wallowing in guilt?
iris lilies
4-26-21, 7:04pm
I pay imputed income tax on the value of my employer provided life insurance in excess of $50,000.
Would you elaborate on this? I havent heard about this.
Would you elaborate on this? I havent heard about this.
The first week of every month my paycheck is about $5 less because of this tax. The first $50,000 in coverage is free, but any amount over that is a taxable fringe benefit, and the amount of coverage my employer provides (2 times my gross base pay) is over $50,000. Another example of this would be if you have a company car. You are taxed on the personal miles you drive in it. The tax is paid via payroll deduction.
My son worked at Rutgers after undergrad and got his law degree through the tuition remission policy. He was shocked to learn that he had to pay tax on the value of the tuition, which really set him back considerably, but at least he didn't graduate with debt.
I pay imputed income tax on the value of my employer provided life insurance in excess of $50,000.
This is standard and has been for a long time. I paid it before I retired and hubster pays it as well. The "overage" shows as additional income on the paycheck stub.
Why is there such an antipathy to paying taxes? I mean that sincerely. I want and need services and expect to pay for them just as I work for revenue and I expect to be paid. I don't haggle with or nickel and dime every business trying to get them to take less for a desired product or service because I want the business to succeed and to be there for future needs. I shop carefully and thoughtfully, most of the time anyway, and pleased if I get a bargain for something I want.
I am trying to understand. I expect to pay taxes for the services that I receive. Do I use each one; no but I am grateful that each is available. What is the cause or trigger for such resistance? Is it the %age of one's income? Is it the lack of personal control over how taxes are spent? Is it the items or services taxed? Is it personal hoarding or greed? Is it fear of lack or theft by others?
Or, maybe it is just me being odd in being grateful and will ing to pay for all the amenities, services and life that my grandparents could not even dream about.
Why is there such an antipathy to paying taxes? I mean that sincerely.
Well, for instance, I think charging me a tax on the "income" I receive from living in my own home is a bit past the point of reasonableness. Especially as I'm already paying property tax on the place, and sales/business taxes for materials and work done to maintain the place, and payroll taxes for any people I have working on the place independently. (Our local taxing authority is considering charging more tax for people whose front doors are painted certain colors, because apparently those are "worth more", which also seems silly. Adds about $6k to your valuation...)
I also sort of object to paying taxes for things that are pure madness, such as maintaining a military that is larger than most of the rest of the planet combined.
I also sort of object to paying taxes for things that are pure madness, such as maintaining a military that is larger than most of the rest of the planet combined.I don't begrudge the cost or size of our military, that's one of the only reasons to maintain a federal government. It also appears to keep all those violent national socialist and communist countries in check. That's a good think in my book.
I don't begrudge the cost or size of our military, that's one of the only reasons to maintain a federal government. It also appears to keep all those violent national socialist and communist countries in check. That's a good think in my book.
I bet we could do that on half the current budget - we'd still be spending more than all the Big Bad Guys combined.
iris lilies
4-26-21, 8:58pm
The first week of every month my paycheck is about $5 less because of this tax. The first $50,000 in coverage is free, but any amount over that is a taxable fringe benefit, and the amount of coverage my employer provides (2 times my gross base pay) is over $50,000. Another example of this would be if you have a company car. You are taxed on the personal miles you drive in it. The tax is paid via payroll deduction.
ah! It is the $50,000 cliff that acted on my free life insurance from my job. I had $50,000 in coverage but no more
That explains why I had not noticed it.
Thanks.and catherine I can see why students would be surprised by that tuition tax.
I’m sure the good Nanny Gub taxmen will allow a house value below a certain number base number with no tax.I guess it’s a good thing we’re heading to Hermann where we will have $300,000 plus in a house is worth about $185,000.
I’m sure the good Nanny Gub taxmen will allow a house value below a certain number base number with no tax.I guess it’s a good thing we’re heading to Hermann where we will have $300,000 plus in a house is worth about $185,000.
My poor house now seems to be worth ~$2 million. I couldn't rent it for more than $3500/month. $42k/year income. $2 million invested at 5% yields $100k/year. I'm "losing" $58k/year by living in the home instead of buying boring stocks. Actually, with property taxes and insurance reckoned in, I'm losing more like $70k/year. I wonder if I can deduct that imputed loss against my real income?
With the current housing market here, I can't even sell it and downsize, as there's nothing on the market.
The New York Times surprised me when they editorialized in favor of eliminating the SALT deduction entirely.
My poor house now seems to be worth ~$2 million. I couldn't rent it for more than $3500/month. $42k/year income. $2 million invested at 5% yields $100k/year. I'm "losing" $58k/year by living in the home instead of buying boring stocks. Actually, with property taxes and insurance reckoned in, I'm losing more like $70k/year. I wonder if I can deduct that imputed loss against my real income?
With the current housing market here, I can't even sell it and downsize, as there's nothing on the market.
A house on an island with access to the ocean in that part of the world is worth more than $2 million based on Canadian real estate prices I am seeing which are insane at present.
I've thought municipalities that operate various functions from property tax revenue are going to be flush with new money to spend or squander.
Teacher Terry
4-27-21, 12:30am
Razz, I also don’t mind paying taxes. We all need services. Nevada is a low tax state. I do think there’s a happy medium because in some places taxes are so high people can’t afford to stay in paid for homes when they retire.
I've thought municipalities that operate various functions from property tax revenue are going to be flush with new money to spend or squander.
Maybe they could tackle their unfunded pensions.
happystuff
4-27-21, 11:20am
We've always had a roof over our heads, food on the table and clothes on our backs, so - while we were definitely on the lower end of the income scale - I don't know that I would call us "poor". The kids, however, growing up and seeing all the "stuff" their friends in the big developments had... I think they considered us poor.
I remember once taking the kids to Goodwill, and my son, who was about 11 at the time, not wanting to go in, and saying he hated shopping there and we had "gone poor."
He always had a funny way with words.
I think I've read about some places that proposed charging "income tax" on the imputed income from living in a home you own. Wow.
That sounds similar to the counties in California before prop 13 who attempted to charge property taxes based on what could be built on the property. The example I recall reading was of an elderly couple in LA that had a small single family home on a decent size corner lot. The same size lot directly across the street from them had the same zoning and had a multi-unit apartment building on it that generated something like 5x the property tax. So LA county decided to increase the elderly couple's property taxes to match those of the apartment building across the street since they theoretically could have torn down their house and built a big apartment building. Stories like that fueled the passage of prop 13, resulting in the absurd property tax variations that now exist almost solely depending on how long one has owned their home.
I don't spend $9/day on Starbucks coffee. I only spend $3/day because I make my own coffee.
What kind of coffee are you making at home that costs $3/day? I make my own coffee but maybe buy one two lb bag of beans every six weeks or so for around $15 which is enough for 10 cups of coffee per week or around $.25/cup. Admittedly my cup is normal size, not starbucks sized. If I had one starbucks sized cup a day I suppose it would be about $.75 to make.
Admittedly I don't make my coffee with 90% milk as the liquid the way starbucks does, so perhaps that's what the price differential is.
That sounds similar to the counties in California before prop 13 who attempted to charge property taxes based on what could be built on the property. The example I recall reading was of an elderly couple in LA that had a small single family home on a decent size corner lot. The same size lot directly across the street from them had the same zoning and had a multi-unit apartment building on it that generated something like 5x the property tax. So LA county decided to increase the elderly couple's property taxes to match those of the apartment building across the street since they theoretically could have torn down their house and built a big apartment building. Stories like that fueled the passage of prop 13, resulting in the absurd property tax variations that now exist almost solely depending on how long one has owned their home.
Some version of that is used in many jurisdictions. It’s called “highest and best use” valuation.
People have come up with many ways to try getting around it. Some of the big retail chains have advanced “dark store theory” to argue that a store property should be taxed as if it was vacant real estate rather than by its value as a profitable concern. One guy drilled holes in a parking lot, planted some trees, and sued to be valued as agricultural property ( which is taxed at a lower rate in our state).
iris lilies
4-27-21, 2:04pm
Why is there such an antipathy to paying taxes? I mean that sincerely. I want and need services and expect to pay for them just as I work for revenue and I expect to be paid.....
Show me any one gubmnt servcie and all of us can find unneeded and silly waste in it.
”antipathy to paying taxes” is using a broad brush. Like most citizens, there are services I like and appreciate, and other services that I do not.
For City services I LOVE the trash people. Our dumpsters sit in alleys and they are huge. I love the trash service so much that I had made special signs thanking trash workers for their service during COVID and I placed those signs on my fence and at our community garden.
Last month a brand new trash dumpster arrived in my alley not requested by me. Coincidence? Tied to my sign? You decide! Haha.
But when it comes to the feds...Oy vey. Yesterday I spent more than an hour trying to get service at the Third World institution known as United States post office. Honestly it was like being in one of those foreign countries where you have to bribe people to give you any service. My neighborhood post office doors were locked. They were no signs on the door as to why. This is the third time I’ve gone in recent months to find that they’re either out to lunch and the doors locked or well just doors locked. So I drove a couple miles away to the next neighborhood post office. It was filthy. The parking lot was full. I stood in line and got my business done after 25 minutes. That is pathetic.
At least a nice lady behind the counter knew what I wanted. First timeI tried to get the special thing I needed my tiny local post office didn’t know how to do it. It is a requirement of rigid Garden Club ladies, otherwise I would just deal with FedEx and stay away from the United States Post Office Third World service which eats tax dollars at an alarming rate.
I rue the day my mail carrier of 30 years retired. He was wonderful. Since then, service to my house has been chit.
Honestly though, you can't judge the USPS by what's happened to it since DeJoy was appointed. And it was unfairly forced to fully fund pensions into infinity before that. It used to be a model of efficiency--at least around here. And it's--around here--still a good solid service. It's my observation that when government services that are common to all--aka "the commons"--are suddenly expected to turn a profit, service takes a nosedive.
Why is there such an antipathy to paying taxes? I mean that sincerely. I want and need services and expect to pay for them just as I work for revenue and I expect to be paid. I don't haggle with or nickel and dime every business trying to get them to take less for a desired product or service because I want the business to succeed and to be there for future needs. I shop carefully and thoughtfully, most of the time anyway, and pleased if I get a bargain for something I want.
I am trying to understand. I expect to pay taxes for the services that I receive. Do I use each one; no but I am grateful that each is available. What is the cause or trigger for such resistance? Is it the %age of one's income? Is it the lack of personal control over how taxes are spent? Is it the items or services taxed? Is it personal hoarding or greed? Is it fear of lack or theft by others?
Or, maybe it is just me being odd in being grateful and will ing to pay for all the amenities, services and life that my grandparents could not even dream about.
Taxes may be “the price we pay for civilization”, but it doesn’t follow from that that the more taxes we pay the more civilized we become.
If I feel a private party is overcharging me for something, I can take my business elsewhere. Government doesn’t allow that choice. So I don’t feel particularly grateful for the privilege of paying whatever tax government dreams up. My best protection is voting in ways to keep taxes reasonable and in managing my affairs to minimize my tax liability.
iris lilies
4-27-21, 10:46pm
I remember once taking the kids to Goodwill, and my son, who was about 11 at the time, not wanting to go in, and saying he hated shopping there and we had "gone poor."
He always had a funny way with words.
I can see being truly poor and hating to go to thrift stores. It’s much different when it’s your choice.
I embarrassed my son by bending down to pick up pennies in parking lots. He survived his childhood though.
They all go to thrift shops now they are grown.
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