Is leaving the right thing to do? (Hoboken, Paramus: property taxes, transplants)

[pirate girl]

Nic, I'm sorry for the criticism here. I'm familiar with Chesterfield and it's not an over the top area.

And I live in a 3 bedroom home that is about 1750 sq ft and it's much to small for four of us. And the suggestion to have your kids share a room? Ridiculous- and in some cases, illegal for children of the opposite sex to share a bedroom. Your 14 year old deserves privacy and should not be expected to share her bedroom with a 5 year old. You are not being extravagant by wanting- or even demanding that.

I'm assuming that in his next post Guy with a Cause will tell you that you were irresponsible to think that you could afford another child five or so years ago.

If taxes and insurances are such in NJ that you can't afford to live a comfortable lifestyle with a few extras, I don't blame you for wanting to leave. Just make sure that there is a job for your husband- make sure that lower costs of living are not negated by lower salaries.

I grew up in Burlco (and have relatives in Chesterfield) but now live in Florida. So often I hear of families who struggled up north moving here thinking the lower costs will make life easy. The sad reality is that a $60K job in NJ is a $30K job in Florida in many cases.

I wish you luck.

[mike0421]

I have a different take on this situation. As Tahiti says, it's not all exclusive to NJ. The property taxes and car insurance are a NJ problem to be sure, but they do not comprise the root causes of the problem. To me it's simple: since the mid 90s, for whatever the reason, the prices of homes have far outstripped the increase in salaries. I have a number of theories regarding this, but there are two constants: 1) income taxes and 2) a devalued dollar. As a population, we've become anethesitized into thinking our net income = our gross income. Thanks to the machinations of federal withholding in 1942, we have become what I like to compare to a lobster being dumped into a tepid water pot, versus a boil. If a lobster is thrown into a cauldron of boiling water, they will scream before they die. Conversely, if you raise the temperature of the water slowly, incrementally, there is not even a whimper from the lobster. Metaphorically speaking, think of that lobster as yourself as it pertains to enduring tax increases from various levels of government. I've mentioned this in a few other posts, but it bears repeating: if you were to keep two checkbooks, one that encompassed your gross pay, versus the real one that comprised your net pay, and maintained these records for a year, then reflected upon the balances in your checkbook, you'd be outraged. My parents bought a 1400 sq ft house in Dover in 1967 for $17,900. My dad made $118 gross, and $103 net. My mom stayed home and raised my sister and myself. When the taxes were raised after 1 year on the home that amounted to $60 a year, or $5 a month, my mom feared we would have to move. Comparatively speaking, these are small increases. And the margin of taxation on my dad's paycheck is notable: he was taxed 13% on his income. Nowadays, I am taxed 35% on mine. Meanwhile, that $17,900 home sold for $282,000 2 years ago. Do the math: the house sold for 15.75 times what it was bought for in 1967. Now, if you increase my dad's salary by 15.75 times, 118 x 15.75= 1858.50. 1858.50 x 52 = $96,642 salary in today's dollars. But, in that tax bracket, he'd be subject to a federal income tax rate of 36.7%, or $35,467. Therefore, his net salary would = around $61,000. Could his income alone pay off a $282,000 mortgage? Mind you, this is just the federal portion of the tax burden. Then, when you add the property taxes, and other ancillary taxes on telecommuncations, increased tolls, etc, your burden is increased only more. The second part of this matrix is the purchasing power of the dollar. Today's dollar is worth $6.04 compared to 1967: http://www.measuringworth.com/ppowerus/result.php

However, housing costs have gone up more than 6.04:1 as witnessed by using my mom & dad's original home purchase compared to today. The trend will only continue to worsen, as witnessed by this bar graph:



Now, getting back to the original matter at hand: should you move? If you consider the lion's share of your problem is how much money you get to take home on a federal level versus how much you actually earn, then you will have this problem follow you no matter where you go, it's just a matter of degree.

[nic529]

Originally Posted by sam23

I'm familiar with the Chesterfield area and almost bought one of those new houses built by KHovnanian. There has been a huge influx of people rapidly raising the population in the past 5-6 yrs. The schools simply can't handle the jump. I can guarantee that the reason your taxes are going up is because a new school/schools is/are in the works.

Believe it or not....they have been trying to pass the referendum for the last 4 years ...but it didn't pass unilt last week! Our 1st and 2nd graders are going to CB Lamb now until the new school is built in 2010.

There are a lot of those houses! And they are expensive. The townhouses are selling for 350,000 +!

[Guywithacause]

pirate girl...yiou are just as bad if you believe living in a 3 bedroom 1750sf house is "too small" for a family of 4. People have been living quite happily in much smaller spaces for most of human existence..why is it that you "cannot" live in 1,700sf exactly? That is ludicrous...and that is the attitude that is causing her headaches...you "NEED" more space...when the reality is you "WANT" more space..there is a huge difference.

But I say good luck to you..your hefty mortgage and tax bills, your heating/ac/ bills, your increased time cleaning a larger home...your higher maintenance bills....while I live comfortably in a smaller space, spend less..spend more time with family...and have plenty of money to do things that most cannot..cuz they "NEED" that big house!

[Guywithacause]

Mike..interesting take on all this...It was easy to understand too!

[nic529]

Originally Posted by pirate girl

Nic, I'm sorry for the criticism here. I'm familiar with Chesterfield and it's not an over the top area.

And I live in a 3 bedroom home that is about 1750 sq ft and it's much to small for four of us. And the suggestion to have your kids share a room? Ridiculous- and in some cases, illegal for children of the opposite sex to share a bedroom. Your 14 year old deserves privacy and should not be expected to share her bedroom with a 5 year old. You are not being extravagant by wanting- or even demanding that.

I'm assuming that in his next post Guy with a Cause will tell you that you were irresponsible to think that you could afford another child five or so years ago.

If taxes and insurances are such in NJ that you can't afford to live a comfortable lifestyle with a few extras, I don't blame you for wanting to leave. Just make sure that there is a job for your husband- make sure that lower costs of living are not negated by lower salaries.

I grew up in Burlco (and have relatives in Chesterfield) but now live in Florida. So often I hear of families who struggled up north moving here thinking the lower costs will make life easy. The sad reality is that a $60K job in NJ is a $30K job in Florida in many cases.

I wish you luck.

Thank you very much. I appreciate your advice. I have a couple of other posts out there to see if anyone has any insight on GM Parts Manger positions and Executive Assistants and the salary ranges. I realize moving may not be the right choice......just wanted to get some opinions on the matter! Thanks so much!

[nic529]

Mike - that was very interesting. Thank you. I understand exactly what your saying.
I appreciate you taking the time to write all of that for me.

[tahiti]

Originally Posted by mike0421

Nowadays, I am taxed 35% on mine. Meanwhile, that $17,900 home sold for $282,000 2 years ago. Do the math: the house sold for 15.75 times what it was bought for in 1967. Now, if you increase my dad's salary by 15.75 times, 118 x 15.75= 1858.50. 1858.50 x 52 = $96,642 salary in today's dollars. But, in that tax bracket, he'd be subject to a federal income tax rate of 36.7%, or $35,467. Therefore, his net salary would = around $61,000. Could his income alone pay off a $282,000 mortgage? Mind you, this is just the federal portion of the tax burden. Then, when you add the property taxes, and other ancillary taxes on telecommuncations, increased tolls, etc, your burden is increased only more. The second part of this matrix is the purchasing power of the dollar. Today's dollar is worth $6.04 compared to 1967: http://www.measuringworth.com/ppowerus/result.php

Mike: one little quibble with this paragraph. The tax rate at that level of income is 25% (amount over about 60K, 14% at the first 60K) . 35% is income over $180k' ish (again, a smaller percentage up to that point, and 33% over it).

However - your effective tax rate is not near this, assuming as a recent homeowner, you have enough in deductions to have more than the standard. I can tell you with 2 kids, house, blah blah blah, with 2 good incomes coming in - my effective tax rate is around 12% - and trust me, I don't "do" loopholes or have tons of writeoffs (no medical or tax shelters to speak of). I don't think it's bad, I do realize I'm in the minority though.

[nic529]

I think Mike is right though - the taxes have gone up, the housing costs have gone up, but the salaries have not gone up enough to cover them ...not to mention property taxes. The question is.....is it like that - or soon to be like that everywhere?

[ScranBarre]

Originally Posted by Guywithacause

SWB...its all about Square Footage...its the draw of a large home and the connection of big home = success/happiness/self-esteem. You can get much more home in places like NC....and everything else is seen as unimportant...that is the draw.

As I stated...nobody is addressing the underlying problem..but instead running to somewhere where they can maintain/acquire a lifestyle that they can no longer afford here. Instead of adjusting to the changing times..running to soemwhere that they can still have their cake and eat it too is much easier.

Guywithacause, I both agree and disagree with you. I agree that the United States is becoming a "gimme, gimme" nation where one is unwilling to settle to own less than one's peers, regardless of differences in socioeconomic backgrounds. I see this myself, where I'm the only one out of all of my friends still driving a sedan from the 1990s. However, I want you to realize that this is NOT a problem exclusive to NJ. After all, a good portion of the transplants moving to my area are from either NY, CT, or SEPA, and these folks aren't moving to rowhomes in Scranton's walkable neighborhoods; they're moving to massive McMansions on suburban cul-de-sacs that cost a fraction of what their former homes did.

Schools here are good. Taxes are roughly half of what they are in NJ. Crime, with the exception of some gang-infested pockets in Monroe County, PA isn't a concern. Traffic congestion is no worse than North Jersey. Nevertheless, folks here still flock en masse to NC. Why? NC has to be the POSTER CHILD of poor long-range planning, and I'd rather move to Tehran than Cary. How could that be so much more desirable than PA, DE, Upstate NY, etc.?