Ok, calm down.
Ok, calm down.
I have friends who make in the 300-500K per year range, and they all live like Almost Elite described. Very modest, paid-off house, a couple of newer, paid-off cars in the garage, no debt, no second homes, shop at Target, walk or bike their kids to school, mom stays home instead of using daycare or cleaning people, and savings up the wazoo. If a person didn't know better, you would think they made 80-100K, which is probably about right after they get done depositing cash into the 401K, CDs, and savings accounts.
Reading this thread I note many folks judge or comment on wealth using the automobile one uses as a bench mark.
The USA is really a carcentric society it seems, no wonder we use so much more fossil fuel per person than other countries in the world
common wrote:
DocLove, can I ask you a question? Are you retarded?
Lehman Brothers didn't intend to fail, but you can bet that other investment banks had a stake in 1)encouraging the failure of IBs other than their own, and 2)making money off the failure of investments that other IBs held.
It's been in the news for years that these IBs were shorting each other like mad.
Makes sense that you worked for Moody's cos they didn't know what the hell was going on either. F*** it! Give everything a Aaa rating!
I am retarded what's your excuse? I was not doing the ratings at Moody's although I did have a nice rating calculator on my desk. You spin it round & it randomly gave a rating. Your point about Moody's just proves my original point - highly paid people on $500k + are not usually any smarter than those on $50k
Haha... so true. My wife stays home and I walk or bike to the train station (we actually walk or bike everywhere). I've maxed out my 401k and 401k restoration since I started working. We do own a nice car, but its our only car, and I'm not planning on parting with it for a while.
Also, I wanted to clear up what I said. By repealing the tax cuts, it eats into my self imposed "alter" income. It DOESN'T eat into my savings. I'm going to save the same amount, meaning if I pay higher taxes, I'll be making cuts in some area that I currently spend money on. We'll unfortunately support our local stores less and continue the trend of buying more at large department stores that are cheaper. We'll cut our restaurant dining further. We won't do that little bit of work on the house. All of these won't really effect my life a ton, but if people in my town have similar thoughts, it will lead to more empty store fronts and a harder time for local businesses. Local contractors will get slammed (as they already have) and unemployment will go no where. We already have a lot of empty stores in my town for just this reason.
I don't think many think this way. I think most in my situation would keep their lifestyle the same, and save less. Not us. We will save the same and scale back the lifestyle... which just hurts local businesses, and helps big-box stores. At some point, I'll raise my threshold for what is an acceptable amount to save/spend in a year.
And don't get me wrong, we don't live like paupers and we don't stress too much about money. I mean, we have Iphones and a Mac. I paid someone to paint my house this year. We take a good vacation a year. But we also sacrifice, look at our budget, and quite honestly, all that stuff, people making a fraction of us do as well.
My wife is a Dermatologist in private practice for last 5 years. Each year she has been over $500k and last year was just under $750k. Did I mention she only works 4 days / week.
The reason we are told that they need to keep the tax cut is because they create jobs by spending their money. But in this thread there were a bunch of examples that the rich were SHOPPING AT TARGET AND COSTCO! Not spending money = not creating jobs. The overall economy is helped by taxing the rich and spending it on things like... oh maybe ... teachers.
All I can say is, pay up selfish bastards.
1) Not obsessed brother.
2) Dude, you make a lot of money, but you DON'T spend a lot of money -- not as a percentage of your income you don't, otherwise at age 31 you would NOT have $535,000 in mutual funds and the majority of your $710,000 home paid for (unless you were just given all that).
3) Not sure why I get labeled as being super frugal, because I'm not. BECAUSE I've stayed out of debt (other than my mortgage), I have more disposable income than most people who make what I make, and I spend that (after investing ~20% into my retirement accounts of course). I love to travel, and so I spend my money there. Last summer the family took 3 trips. Most of my friends didn't take any trips last summer as they were saving their money. There's just an order in which you do things, and if you do them in the right order, you can be saving for retirement AND spending more money NOW than you would have been had you not paid attention to your finances.
4) I'm not worried about money bother...quite the contrary. I know where my money is, and I'm very pleased about where it will be when It's time to retire.
5) I drive reliable yet not expensive cars (2000 Ford Windstar and 2005 Honda Accord) because I don't have a need to project success with my vehicle; to me a car is a thing to get you from point A to point B in a reliable and safe manner.
6) A wurlitzer would be cool, but I've got my eye now on a Nord (my current Roland keyboard is starting to have some problems after 5+ years of serious play) because those things are awesome and mimic all the vintage sounds pretty damn well.
7) If I were to be super frugal and not spend any money on anything extra for the family (no vacations, no pool membership, no summer camps for the kids, only clothes from second-hand stores, no cable TV, no summer track or diving, no pay to play CC and track, no eating out, no pizza from a pizza place, only generic food, no movies, etc., I could retire comfortably in about 4-5 more years (before age 50), but I want my kids to do all those things and go on those vacations so that they expand their horizons. To get all those things and STILL be able to retire with decent money, if you don't have a HUGE income (and my income isn't HUGE), you need to set aside a certain percentage of your income for retirement. After that is done, simple budgeting makes it all work, and it ELIMINATES the worry when you're in control of it all.
We're all given the same opportunities in this country. You could go to the same schools that I went to (public) the same private university (take out loans, get grants or scholarships), study hard, and make as much as the "rich".
The fact that you didn't take advantage of those opportunities to make money does not mean I should pay for that.
I am not against paying taxes. IN FACT, I think we should go to a flat income tax and instead, tax goods. You want that Lexus... tax it more then a Kia. You want to buy your kids clothes at ZBaby? Tax it more then the clothes at Target. There is your tax on the "rich".
I shouldn't be taxed more then you because I save more then you. I should be taxed more because I SPEND more then you. If I don't spend more then you, and I don't have any more disposable income then you (even if its a self-imposed disposable income), why should I be taxed more then you?
Like I said, we were given the same opportunities, and the fact I chose to pursue a career that paid me well, and you didn't, and now I don't want to part with the money I get from making that decision, makes me neither greedy nor necessarily wealthy.
Not saying your choices were wrong or you didn't take advantage of the opportunities presented to you. Just saying you didn't take advantage of them to make you money. Which is fine... great even. But I shouldn't subsidize your choice.
Than.
I guess you didn't learn very much in the schools you attended if you think this. My gosh, didn't you ever take a sociology course?I seriously doubt that black kids in south-central los angeles have the exact same opportunities as my kids in Beverly Hills. I don't care if they both go to public school.And if you know anything about statistics you know one or two people to overcome the adversity society sets in front of them means absolutely nothing.I didn't come from much, but it also wasn't the worst either. I'm humble enough to attribute my success to a both a little bit of luck (both where I was born and some luck in the course of my life) and skill.
Almost Elite wrote:
We're all given the same opportunities in this country. You could go to the same schools that I went to (public) the same private university (take out loans, get grants or scholarships), study hard, and make as much as the "rich".
'I don't have a need to project success with my vehicle'
But you do need to project your success on here! Although you are a picture of modesty next to that other braggart
Good for your mom and her family. Very inspiring. Curious, how were you raised if you don't mind me asking? The reason I ask, I'm trying to keep my kids "grounded" especially living in our area where kids are spoiled and expect things handed to them. I have my kids do chores not a ton and they get an allowance for doing them. I find one kid is eager to work for her chores and the other not so much. I try to teach them the value of the money. They don't go to private schools and when they are old enough, they will help pay for their car or at least their insurance. Did you feel spoiled growing up? You seem like someone who isn't. Any tips would be helpful.
Almost Elite wrote:
I shouldn't be taxed more then you because I save more then you. I should be taxed more because I SPEND more then you. If I don't spend more then you, and I don't have any more disposable income then you (even if its a self-imposed disposable income), why should I be taxed more then you?
Almost Elite
You seem very selfish and seem like you have a spoiled attitude, but you may actually be different...I can't tell.
Anyway, I'm having a hard time taking you seriously when you say that your recognized taxable income should not include your savings. Putting money aside IS spending your money.
And you should be taxed more than someone else because that's how the government feels that it can make the most money. Fair or unfair, it is not a merit system. The government needs money to do things, and taxing those that can afford it is the most reasonable thing to do. I'm sure that the government would love to not have to tax ANY of us, but that's just how societies have to be.
A few years before 50, I paid off the last of my debts, including mortgage. My home is move up home for me, the nicest I've ever lived in, but relatively modest, the kind of place the people with the McMansions move to when they downsize. Great neighborhood, warm winters.
I never made more than $100,000 in a year and never needed to. You'll pay 40% of every dollar you make over $100K in taxes, and the other 60% on high mortgage payments, property taxes and utilities on an overly large, expensive house, or quickly depreciating new cars.
I buy a new car every eight or nine years, then it becomes my second car for eight or nine more, years when I get to keep the car I've gotten attached to.
Control spending and life is much, much easier.
Not sure how I seem like I have a spoiled attitude.... maybe because of my opportunities comment? I was just trying to prove a point to the one poster who called me greedy.
I clearly know we all don't have the same opportunities in life... having taught night classes at an inner city public school, I am very aware of the opportunities, or lack there of, that this country's kids have.
I am very much in favor of government sponsored assistance programs (including medicare, welfare, social security, etc) that is paid for through taxes. And like I said, I voted for Obama and am confident in his leadership, despite many democrats jumping off the bandwagon.
I also believe that the destruction of the middle class in this country could lead to its downfall. That and the fact that we became a consuming nation, relying on service industry jobs, rather then a producing nation, relying on manufacturing and infrastructure or technology jobs.
I'm sure many of the above ideas run contrary to my tax beliefs. I don't have the answers on how we fund social welfare programs and education, but I do have some ideas.
Want to solve the illegal alien, tax and housing problem all at once? How about this:
Go to every illegal alien. Say we will give you citizenship, no questions asked, if you can prove that you have $x in the bank, make $x/year, and will buy a house.
Bam. Instant demand for housing, fewer illegal immigrants, and more tax paying citizens. Although this sounds ridiculous, it has been done before (in Canada with a large Asian population) and it WORKED. More tax payers means more equality in tax policy.
I would feel much better about paying higher taxes (not saying I shouldn't be paying higher taxes, btw, just not as high as they would be post the Bush repeal), if I didn't think the government wasted so much of that money.
Our military budget is out of control... and the government knows this and is trying to get a handle on it. The amount of money we have spent to pursue a war started by Bush, is staggering... and no, I don't support my tax dollars going there.
I would love to propose the following:
Everyone in the country gets to go to a website. On this website is everything the country needs money for with a budget. You can then go and direct your tax dollars to what you feel is necessary. Its kind of like a wedding registry. The last person to allocate his tax dollars is going to have to allocate it to the programs that are viewed as useless. Let us decide where our tax dollars go. The government could track where the flow of money is rushing into, and budget for the following year accordingly. For example, if everyone pours money into Education, and no one pours money into funding a oil pipeline through the Appalachians, then next year, cut out the tax dollars to the Appalachians.
We would see where our money is going, where there is waste, and feel like we have some ownership of the country and its projects.
So, no, I don't think I am spoiled. I am in fact incredibly grateful for the opportunity to be brought up in a loving household, of moderate income, in a town with solid schools. I am incredibly fortunate that my parents paid for my college education (though not for grad school) and left me with no debt at 22 years old. I am incredibly blessed that I landed a job that I love and make good money at.
But, I still think there should be a consumption tax. I would take a consumption tax on top of my current tax rate... even if that would put me over the proposed repealed tax rate. In other words, if I would pay $100 in taxes under the repealed tax rate versus $80 now... and had the choice to keep thee $80 but now assume a $40 in consumption tax during the year (i.e. $120 total in taxes), I would take the $80 and $40. Why? Because at least then I know where my money is going... I am not supporting government fat, and it would be commensurate to my spending. All fair, in my mind (especially considering I am already paying more then most in taxes).
This is no different then paying higher property taxes because I have a bigger house then someone, live in a more expensive neighborhood, etc. I support that fully. Why should my income tax be any different? Again, there is precedent for this.
Almost Elite- I'm much younger than you, and have much less experience than you do, so I'm asking a serious question (as opposed to a sarcastic rhetorical one barely hiding an agenda- I just wanted to preface the question because tone is really tough to read on the internet, and I didn't want to come off like a punk kid).
You've made a pretty good argument for a consumption tax. I had a similar conversation with someone in a similar financial position as you describe (it was a family member, hope he's not reading this), and his argument AGAINST the consumption tax was that it could provide an incentive for people to hoard their money in savings accounts and spend as little as possible to avoid having their earnings be taxed. I thought surely a person making 500,000 a year wouldn't try to live on 20,000 a year just to avoid consumption taxes. Do you think a consumption tax would raise revenues without encouraging people to live on Ramen?
With respect to consumption taxes, as opposed to income taxes being the principal revenue raisers, I don't think the main tax avoidance will be self denial, but sharing and barter.
People within families will be more likely to share homes, furniture, and vehicles. Neighbors will buy and share one lawnmower and one snowblower instead of having two, separately.
It's also a style of tax that is much to the advantage of those 40 and over, who own pretty much everything they need. People just coming out of high school or college own virtually nothing and would have to pay the tax early and often. Already owning your house, (and maybe even a second home), three cars, and a house full of furniture, electronics, appliances, clothes and tools would be a big advantage.
Craig and More,
Both points are solid points. Please don't mistake what I am saying... I actually thing today's tax rates are fine... so the consumption tax would be INSTEAD of repealing Bush's taxes, but our CURRENT tax rates would remain 10, 15, 25, 28, 33, 35%.
I think our tax code is pretty arcane and hard to explain. I to this day do not understand how the AMT works. Don't even get me started on the "mansion" tax that hasn't kept up with inflation or the death tax.
My counter argument to both your points is the following... the consumption tax is the WalMart model. Its a tax of volume. You don't make the consumption tax insane. You make it 2% or 3% and the government funds itself through volume.
A Lexus costs about 42grand. If you want a Lexus, you'll suck up the extra grand and get it.
What you can't do is tax things like lawn mowers! We can't have a society where only the elite can afford basic "luxury" goods. TVs, appliances, etc should not be taxed. I'm talking about taxing goods that the "rich" are the only ones who can afford anyway. Porche's, Yachts, 60 inch televisions, uber expensive audio systems, etc. These types of items, yes, in my opinion, the rich will still buy them and pay the premium.
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