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Old 07-21-2009, 08:18 AM
 
1,310 posts, read 2,169,216 times
Reputation: 423
Quote:
Originally Posted by luckyshoes View Post
Yeah, I know, but that's not the way it works. What you are paying now is funding the benefits being paid out and healthcare for retirees today. It's not being put away for you in the future.
I am aware of that. Which is why SS is going to be broke in the years to come (without some major changes) and why it is a badly designed program.

And if you allow me to save 90% of my property taxes paying for your kids education and allow me to stop paying into SS for other people and let me save/keep all that money? WIN WIN for me.
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Old 07-21-2009, 08:52 AM
 
744 posts, read 846,944 times
Reputation: 177
Quote:
Originally Posted by The Michigan Man View Post
Not everyone who makes a poor investment is an idiot. Investments/markets aren't totally in your control. And this is more evident the longer you hold the property.
Rental and property markets move slowly enough that I think you would have to make a serious mistake to get caught out. Other than investing in a town that goes belly up quickly (one business towns that see the business shut down, for example).

Yes property prices have recently fallen quickly, but rents haven't seen the same pace, and in the previous 5 years investing in a rental property was clearly a highly risky investment given property price levels and rent levels.

In the long term, assuming a reasonable entry point, then yes there may be some time periods where market rents are so low that the landlord is taking a loss (and market prices too low to offload) but those should be balanced out by the times rents are high and the landlord is putting aside the extra income to cover those lean times. In which case renters are still paying more than their "fair share" of property taxes (if the vacancy rate is 10% then renters are effectively paying 10% extra in property taxes since the rents are high enough to cover the unoccupied periods but the renter doesn't spend 10% of their time homeless).
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Old 07-21-2009, 09:04 AM
 
1,235 posts, read 2,341,483 times
Reputation: 258
Quote:
Originally Posted by NatasNJ View Post
I am aware of that. Which is why SS is going to be broke in the years to come (without some major changes) and why it is a badly designed program.

And if you allow me to save 90% of my property taxes paying for your kids education and allow me to stop paying into SS for other people and let me save/keep all that money? WIN WIN for me.
Deal. As long as you don't sign up for SS or Medicare when it's your turn to collect. I would take the same deal and I have kids.
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Old 07-21-2009, 09:26 AM
 
1,310 posts, read 2,169,216 times
Reputation: 423
Quote:
Originally Posted by luckyshoes View Post
Deal. As long as you don't sign up for SS or Medicare when it's your turn to collect. I would take the same deal and I have kids.
Well I want the money I already put into SS and Medicare.

And your taxes would probbaly increase dramatically to cover the cost of people not funding your children.
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Old 07-21-2009, 10:19 AM
 
1,235 posts, read 2,341,483 times
Reputation: 258
Quote:
Originally Posted by NatasNJ View Post
Well I want the money I already put into SS and Medicare.

And your taxes would probbaly increase dramatically to cover the cost of people not funding your children.
Sorry, the old people already spent that.
And then some.

I don't care about my kids' education, I can afford private school if I didn't have to pay property taxes.
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Old 07-21-2009, 10:26 AM
 
1,310 posts, read 2,169,216 times
Reputation: 423
Quote:
Originally Posted by luckyshoes View Post
Sorry, the old people already spent that.
And then some.

I don't care about my kids' education, I can afford private school if I didn't have to pay property taxes.
We need to get rid of these old people so we can get our money back.
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Old 07-21-2009, 10:46 AM
 
Location: Montgomery County, PA
2,771 posts, read 3,682,356 times
Reputation: 594
Quote:
Originally Posted by luckyshoes View Post
Yeah, I know, but that's not the way it works. What you are paying now is funding the benefits being paid out and healthcare for retirees today. It's not being put away for you in the future.
yes, it's what's known as an "unfunded" plan. Actually, all defined benefit plans (including state pensions) are either unfunded or underfunded. I wrote a detailed post on this,

http://www.city-data.com/forum/9779069-post79.html

However, in the big scheme of things, when you think about it, there isn't really a way to "put away" benefits for you in the future (not short of stockpiling preserved food)

Even retirement savings in 401k are not what people expect -- they expect stored consumption when in fact what they are ultimately getting is a claim on a slice of future production.

Whether your retirement comes from 401k or social security, the country in aggregate cannot sustain consumption above 100% GDP regardless of how much you think you have "put away". The 401k, much like social security, depends on sustained economic growth and depends on consumption to be matched by production, to offer good returns.

There isn't a way to have a viable society that has a large consumer/non-producer class, even if members of this class "put away" something.
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Old 07-21-2009, 12:43 PM
 
744 posts, read 846,944 times
Reputation: 177
Quote:
Originally Posted by elflord1973 View Post
There isn't a way to have a viable society that has a large consumer/non-producer class, even if members of this class "put away" something.
There are two ways to pull that off:

1. The standard of living is in decline.
2. Productivity is improving faster than the standard of living does.


Now obviously in both these cases the consumer/non-producer class is free-riding on the producers, but humans have a built in acceptance of this for the elderly. I suspect you are correct in the long term, the producers will revolt at some point when they notice they are effectively slaves of the consumers, but in the long term we are dead anyway....

The "put away" part does actually help. If those savings are invested they will result in more production in the future than would happen if they were not, that could actually cause society to be better off than it would have been if nobody saved and everyone was executed at retirement age.

Of course if the idiot bankers pour those savings into bidding up the prices of houses instead of into productive economic assets, then we get the worst of both worlds. But such a thing is so ridiculously stupid it could never happen!
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Old 10-20-2011, 05:51 AM
 
27 posts, read 151,827 times
Reputation: 48
Property tax is just wrong. It means the government owns all the land. Spend years paying for your house, making improvements to your house, lose your job, can't pay your taxes and the government takes it. It's hard to believe we put up with such an outdated system. A single mother pays the same tax as the two income couple next door. Land value can exceed the value of the home. This allows the government to force the poor out of their homes when neighborhoods are rebuilt. I understand paying tax on income, I dont understand paying tax year after year on something I bought and paid for. I want to own the land my house sits on, not rent it from the government.
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Old 10-20-2011, 09:05 AM
 
27,365 posts, read 20,716,917 times
Reputation: 24718
Quote:
Originally Posted by mumbles View Post
Property tax is just wrong. It means the government owns all the land. Spend years paying for your house, making improvements to your house, lose your job, can't pay your taxes and the government takes it. It's hard to believe we put up with such an outdated system. A single mother pays the same tax as the two income couple next door. Land value can exceed the value of the home. This allows the government to force the poor out of their homes when neighborhoods are rebuilt. I understand paying tax on income, I dont understand paying tax year after year on something I bought and paid for. I want to own the land my house sits on, not rent it from the government.
Sorry, but technically, the government DOES own all the land.
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