patrick.net

New thread: Inflation and Interest Rates (and the dollar)

Linda in La La Land,

Now I could see if the IRS came out and said you (as a married couple) could have 500K in LIFETIME exemptions! Yeah, I'd be O.K with that b/c it would put it on a par at least to your IRA. Oh and has anyone noticed how "out of favor" IRA's and 401K's have become lately. Suze Orme does one little blurb about how taxes may have to go higher in the future to pay for the bill we are currently running up and everyone (well enough of us anyway) have construed this as an "excused absence" slip? Great! I'm not responsible for my own financial future b/c Suze told me so! Uh, the debate may rage on as to the effectiveness of IRA's but I'm pretty sure she didn't mean it as an excuse not to save or invest.

*Not an endorsement for Suze*

DinOR,

This bubble just does a 180 on normative financial planning. My boyfriend and I spent the last 4/5 years saving money in tax advantaged retirement plans and building human capital, and not getting tied up in high overhead expenses. But of course, we would have "done much better" on if we both came out of college buying something 10X our salary.

Now when this thing blows, the IRS will probably come after us because we'll be the ones with cash and decent paying jobs. It's all the same to the federal government and it'll be easier to squeeze me than bankrupt specuvestors.

Oh boy, JBR talk again...

The Colorado Plateau is a great place to see stars. Bryce Canyon is generally considered to have the least light pollution in the lower 48.

astrid,

I really wouldn't worry b/c I just spoke with a CPA friend of mine when he came up for air after the tax season and he said there is QUITE a buzz about how folks w/higher incomes have been writing off their HELOC's! They are doing it all wrong. Now, it may take years for them to catch up with these people but catch up they will. With so many people doing their own taxes these days I think it will be as simple as them sending out a "brief" letter explaining how back in 2005 you incorrectly claimed interest paid on your HELOC and you now owe X amount of dollars along with a remittance form. It really will be that simple.

Newsfreak,

You're right about the wonderful hot springs. It's gorgeous. Bruce and Demi bought a tiny piece of our old homestead to fill in a little hole in one of their mega-holdings. My Dad, Aunts and Uncles thought they hit the lottery.

Fortunately, the city slickers only offered their exorbitant price for the one little finger. The family gets to keep our homestead. At least till all my cousins decide to cash out -- or the Nez Perce take it back.

SFWoman,

Don't give them ideas. :P They already used Sierra, Sequoia, Tahoe, Tundra, Santa Fe, and Yukon.

DinOR

Sadly, I can't agree that the Aryan nations are overhyped. I've run into at least one shaved head, goateed young man with the "A" tattoo there. Oddly, I've also known a lot of cops in California who retired to Sand Point (where Mark Furman is). No joke.

Even if you arrrested all the right wing nuts, the general populace is lilly white and ultra right. Politically, I'm closer to most Idahoers than to most Californiac's, but not much. My darling wife is Armenian. I imagine some of them wonder what a good white boy is doing with that "mesican" from California.

DinOR Says:
The last thing I want to be labeled as is the “I like Capital Gains Guy”.

astrid Says:
DinOR,
I’ll be more extreme and say that this country’s tax policy is quite horrible, in that it taxes work much more than it taxes capital. Housing deductions and exemptions are the extreme manifestation of that unfairness, where the most unproductive capital received the most advantageous tax treatment of all.

hey, O-O loves low capital gains tax, he's annoyed that it used to be taxed at your top marginal rate in Oz. If you flipped an investment property. Then they halved it in 1997. Still not good enough for O-O.

The Labor state govt in the most inflated state then put on an 'investor's exit stamp duty' of 2% for properties which sold at over 12% of buying price. This was a hamfisted attempt to do I don't know what to the overheated market. It would only give 2% to the greedy govt, would not make properties any cheaper, unless they lowered their prices just to avoid the tax. It only served to annoy people, so they govt took it off a year later. I think it was the stupidest idea of all time as an attempt to make housing 'affordable' through the simple application of a magic tax.

My blog has an article "How tax system egged on property speculation" - http://www.smh.com.au/articles/2004/06/28/1088392603764.html :

Five years ago Treasurer Peter Costello told Australians: "Work for a living and we'll tax you at close to 50 cents in the dollar; speculate and we'll only take 25 cents.

"Not only that but, as a special deal - while stocks last - we'll pay half your speculating costs."

DS,

Owneroccupier was considering his home address in terms of what's best for Owneroccupier. I'm considering the normative requirements of a good government tax scheme. What's good for one person and what's good for the collective are two different things.

If I had substantial assets like the wealthier participants of this blog, I would consider the tax question very seriously too. Then I'd consider government amenities, political rights, overall pleasantness, cost of living, etc. Nothing wrong with that.

Hey DS,

I grew up in a place where you have ZERO capital gains tax, ZERO dividend and interest tax, 15% flat income tax. US is already horrible enough for me.

If you ask someone growing up in Sweden, I am sure he will have a different perspective. Btw, in case you are not aware, the founders of this country called the US of A are a bunch of rich folks who didn't want to pay tax.