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Old 03-27-2011, 04:32 PM
 
Location: Forests of Maine
29,722 posts, read 47,483,706 times
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Quote:
Originally Posted by freemkt View Post
I did. Life is not fair. The private sector is not fair, and I do not expect fairness in the private sector.

But I do expect government to be fair. Do I expect too much from government?

Based on your position, you shouldn't have a problem when government takes your income and gives it to people on the dole.
Life is not 'fair'. Government is filled with buffoons there is no way that government could ever be 'fair'.



I have paid very little of my life's income to income taxes.

I have lived in lands where taxes where actually high [unlike here in the USA], so I really have no complaint in that context.
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Old 03-27-2011, 08:16 PM
 
25,807 posts, read 49,697,815 times
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Quote:
Originally Posted by freemkt View Post
Equal tax rates are pretty much standard in the Northeast, unequal tax rates are pretty much standard in the South. The rest of the country is a mixed bag.

Even though property tax rates are equal in California, Proposition 13 has ON AVERAGE extended greater benefit to homeowners than to landlords because ON AVERAGE rental properties are sold more often than owner-occ homes and thus rental property is more frequently assessed upward to full market value. Yes, many landlords do buy and hold...and hold, but many landlords frequently buy and sell, triggering assessment jumps.

I will have to check property tax rates in Washington state, but I did see a newspaper article in the Columbian (Vancouver) a few years ago which said the local property tax rate on apartments was considerably higher than the rate on single-family homes. (So Washington might have a local option where higher rates on apartments exist in some areas and not in others.)

Four units is the usual threshold at which apartments are taxed as commercial property which brings a higher tax rate.bbb
Prop 13 rates apply equally to all... the question even went to the US Supreme Court which ruled in Prop 13's favor on the equal protection clause.

I can show you block after block of homes where the new home owners, the ones that bought in the last 12 months pay substantially less than those that bought 4,5 and even 6 or 7 and some cases 10 years ago.

As for buying a home... there are always options...

Me and some of my friends all started with fixer homes in not so good areas... I bought one that was scheduled for condemnation and because I bought it... the county had to start over because I had not been property notified... I quickly introduced myself to the neighbors and promised to work tirelessly cleaning the place... the 6 week delay provided enough time to no longer have to worry about condemnation because the property had improved so much with elbow grease and many dump runs.

Friend was 20, married and had a newborn... they were done with apartment living and decided to own their own home and they did... the house was vacant for years and you could look up in the second bedroom and see blue sky... they both were in school, she worked part time in the library and he worked nights at an auto parts store. They moved 4 times repeating the process and now have their forever home... they are both public school teachers and the long summer breaks provide lots of time for home improvement projects.

These are SF Bay Area homes, one of the highest cost housing areas of the country.

From personal experience... be careful with WA State. My taxes went up over 80% within 14 months of my purchase... never could have happened in California.

Ownership is a lifestyle choice that some are willing to make the sacrifices for... you might be able to buy a 2 or three family home... live in the worst or smallest unit and use income from the others...

Both my brothers had rented out rooms the first couple of years to make ends meet.

There are always ways. If the tax deduction is worth it... find a way to take advantage.
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Old 03-27-2011, 08:39 PM
 
33,046 posts, read 20,714,185 times
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Quote:
Originally Posted by forest beekeeper View Post
Who does? Folks who save.

And how much do you realistically expect someone earning minimum wage to save? If you're living with parents and get free room and board, sure.

People working for a living usually don't.
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Old 03-27-2011, 09:44 PM
 
33,046 posts, read 20,714,185 times
Reputation: 8928
Quote:
Originally Posted by Ultrarunner View Post
Prop 13 rates apply equally to all... the question even went to the US Supreme Court which ruled in Prop 13's favor on the equal protection clause.

I can show you block after block of homes where the new home owners, the ones that bought in the last 12 months pay substantially less than those that bought 4,5 and even 6 or 7 and some cases 10 years ago.

As for buying a home... there are always options...

Me and some of my friends all started with fixer homes in not so good areas... I bought one that was scheduled for condemnation and because I bought it... the county had to start over because I had not been property notified... I quickly introduced myself to the neighbors and promised to work tirelessly cleaning the place... the 6 week delay provided enough time to no longer have to worry about condemnation because the property had improved so much with elbow grease and many dump runs.

Friend was 20, married and had a newborn... they were done with apartment living and decided to own their own home and they did... the house was vacant for years and you could look up in the second bedroom and see blue sky... they both were in school, she worked part time in the library and he worked nights at an auto parts store. They moved 4 times repeating the process and now have their forever home... they are both public school teachers and the long summer breaks provide lots of time for home improvement projects.

These are SF Bay Area homes, one of the highest cost housing areas of the country.

From personal experience... be careful with WA State. My taxes went up over 80% within 14 months of my purchase... never could have happened in California.

Ownership is a lifestyle choice that some are willing to make the sacrifices for... you might be able to buy a 2 or three family home... live in the worst or smallest unit and use income from the others...

Both my brothers had rented out rooms the first couple of years to make ends meet.

There are always ways. If the tax deduction is worth it... find a way to take advantage.

As I understand the decision, the Supreme Court said Prop 13 was okay because promoting neighborhood stability and protecting incumbent homeowners are okay.

That's like saying unequal protection is okay if you can justify the reason for it, and as long as you don't discriminate against any constitutionally protected group (race, color, etc)

There was a case from West Virginia where a similar tax scheme was ruled unconstitutional, although I can't find either decision online to actually read. I'd love to know why one tax system is valid and a similar tax system is not.

(There are plenty of PAY sites but I couldn't find any that are free. Even the Supreme Court didn't seem to have either one online.)

I once tried to buy a vacant house that was scheduled for condemnation. The owner was a slumlord who was playing games to avoid losing the house.

What surprised me is that the owner was astonishingly inflecible on price and terms, so I was unable to buy it, and ultimately he did lose the house to demolition.

You can do a lot with money, a truck, and elbow grease, but not a lot you can do without any money.
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Old 03-28-2011, 12:22 AM
 
25,807 posts, read 49,697,815 times
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Yes, that is part of what the Court said in the opinion...

Here's the other:

The court ruled that an acquisition-value system does not violate the Equal Protection Clause of the U.S. Constitution because it "rationally" furthers a legitimate state interest. The court said, "The state legitimately can conclude that a new owner, at the point of purchasing his property, does not have the same reliance interest warranting protection against higher taxes as does an existing owner who is already saddled with his purchase and does not have the option of deciding not to buy his home if taxes become prohibitively high."

You are correct... in just about every instance the buyer needs to have "Skin" in the game and most of the time that requires money.

I set up 30 yard dumpster at the cost of $450 each and it took 6 of them to haul away 35 years of debris... and this is at a Residential home.

At one time, my city would sell tax lien homes for $1 if the first-time buyer lived in the home for 3 years and spent $3500 on repairs... some of those dollar homes I walked by on the way to school were later selling in the mid $300's during the boom and now as low as 80k from Bank Foreclosure Sales.

There were also other programs for teachers and public safety where the city would provide a no interest loan to be used for down payment.

The statistics just came in and almost 50% of sales in my county are Short Sales or Foreclosures and 50% of the sales are cash sales... this leads me to think people with money see the current downtrend in Real Estate as temporary.
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Old 03-28-2011, 04:47 PM
 
2,060 posts, read 5,004,264 times
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All I can say is that we recently did our taxes and seeing as how we rent, we can't hardly write off any of the amount due. On the other hand, if we owned a home we would have been able to write off the interest. I look at this situation from a broad perspective: The government wants everyone to buy homes because in doing so you become a money-making machine: You will buy paint, lumber, furniture, tiles, plumbing, appliances, lawn mower, and so on. On the other hand renters don't get squat. Its especially crappy if you live where I do and starter homes still cost $500,000.

I'm the mindset that homeownership should be something you have to work for. You should also get no more of an advantage over renters tax-wise. The one good thing that is possibly going to happen- as I mentioned in a thread above- is that the government might start requiring home buyers to put down 15-20% for a down payment. I feel that in many ways partially levels the playing field a bit. That's the way it should be.
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Old 03-28-2011, 04:59 PM
 
64,565 posts, read 66,100,109 times
Reputation: 42993
never forget those write offs arent a good thing. all they mean is you spent even more money over and above the price of the house and if your lucky you will get back 1 dollar or so for every additional 4 you spent. mortgage interest and real estate taxes are the same as any other expense like utilities, heat insurance etc. the fact you get a rebate on the interest or real estate taxes still doesnt change the fact they are expenses over and above the house.

think of it another way. if those items werent deductable there is a pretty good chance rents would be higher then they are to absorb that additional expense.

a married couple that are homeowners and a renter couple are both even steven in deductions until after the first 11,400.00. both get the standard deduction so any advantage a homeowner has isnt until after the first 11,400.00 in mortgage interest and real estate taxes. the tenant may actually be a head at times tax wise. as an example if all the tenant has is 5k in local taxes paid on income to deduct they actually got a free additional 6,400 in deductions and spent nothing extra. the homeowner actually paid that 11,400.00 in taxes and interest and so they get nothing as a bonus in deductions like the renters 6400 additional they got that they didnt actually spend on deductable items.

Last edited by mathjak107; 03-28-2011 at 06:18 PM..
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Old 03-28-2011, 05:02 PM
 
25,807 posts, read 49,697,815 times
Reputation: 19249
Quote:
Originally Posted by sliverbox View Post
All I can say is that we recently did our taxes and seeing as how we rent, we can't hardly write off any of the amount due. On the other hand, if we owned a home we would have been able to write off the interest. I look at this situation from a broad perspective: The government wants everyone to buy homes because in doing so you become a money-making machine: You will buy paint, lumber, furniture, tiles, plumbing, appliances, lawn mower, and so on. On the other hand renters don't get squat. Its especially crappy if you live where I do and starter homes still cost $500,000.

I'm the mindset that homeownership should be something you have to work for. You should also get no more of an advantage over renters tax-wise. The one good thing that is possibly going to happen- as I mentioned in a thread above- is that the government might start requiring home buyers to put down 15-20% for a down payment. I feel that in many ways partially levels the playing field a bit. That's the way it should be.
Didn't the Renter's Tax Credit come into being to offset the Home Owner's Exemption?

As far as interest deductions... I know many that purposely refied and took out HELOCS just so they could deduct interest... many of the PBS finance guys/gals encouraged this when Consumer Credit Interest was no longer deductible.

It's no secret the US economy and government policy is geared toward Home Ownership...

Even with policies to encourage ownership... the US lags many countries in terms of the percent of owners vs. renters.

Sliverbox... have you noticed that 50% of the sales in our county are short sales or foreclosures and what I found fascinating is about the same number are sold for all CASH... evidently, there are people with money that believe now is a buy opportunity for Real Estate in the Bay Area.
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Old 03-28-2011, 05:05 PM
 
Location: Texas
42,203 posts, read 49,753,916 times
Reputation: 66975
Quote:
Originally Posted by StoneOne View Post
Of course it should be repealed. The business of government, especially the tax authority, is not encouraging or discouraging one lifestyle choice over another (owning versus renting in this case).
They do it with marriage. Why not home ownership?

Yeah, repeal it...and every single other deduction...right when you enact a flat tax. No one gets out alive!!!!!

Seriously, though...flat tax, no loopholes.
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Old 03-28-2011, 05:07 PM
 
Location: Texas
42,203 posts, read 49,753,916 times
Reputation: 66975
Quote:
Originally Posted by freemkt View Post
And how much do you realistically expect someone earning minimum wage to save? If you're living with parents and get free room and board, sure.

People working for a living usually don't.
There are a lot of countries in which this is *exactly* what they do.
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