santa fe demographics (change)

[Devin Bent]

Mortimer posted a list in another thread of NM ZIP codes.
http://www.city-data.com/forum/new-m...zip-codes.html

What's interesting to me is where is the greatest income? The list below is by family income:

Albuquerque (87122) at 150K,
Los Alamos (87544) at 116K,
Corrales (87048) at 110K,
Placitas (87043) at 100K,
Sandia Park (87047) at 96K,
Cedar Crest (87008) at 94K,
Santa Fe (87508) at 89K

Santa Fe breaks into the list only at number seven and then the income is only 3/5 of the income in the ritziest ABQ zip code.

[santafescribe]

Could that be because many of the people with higher income who live in that Santa Fe zip code actually file taxes somewhere else?

[Devin Bent]

Originally Posted by santafescribe

Could that be because many of the people with higher income who live in that Santa Fe zip code actually file taxes somewhere else?

By taxes, you mean federal income tax? Aren't you a realtor? So you must know better than me. But I would think that you might find a higher percentage of people like that in Cedar Crest -- isn't that something of a retirement community? -- yet Cedar Crest still has a higher income than 87508 in Santa Fe.

For Santa Fe part-time residents filing taxes elsewhere I would have guessed 87501 (roughly north City) or 87506 (roughly north County)?? 87506 includes Pojoaque Valley and we file our taxes here, but it also includes Tesuque and Las Campanas.

Might Ruidoso or one of the towns near Taos crack the list, if you could include the people who file taxes in another state?

Again, I suspect that you would know better than me.

Do you know the proportion of part-time residents who file taxes elsewhere?

Is income data based on census or federal income tax returns? If it's census, then doesn't residence depend on where you are in April? Not where you file your taxes?

[jsc23]

A person living on the proceeds from sales of assets would not necessarily report the funds as income. For example, a retiree in Santa Fe who realized a nice capital gain from selling a house in San Jose, has a healthy IRA he is cashing in, and has mutual funds tied to a money market account could maintain a hefty cash flow, yet report an income based solely on his Social Security payments.

[Devin Bent]

Originally Posted by jsc23

A person living on the proceeds from sales of assets would not necessarily report the funds as income. For example, a retiree in Santa Fe who realized a nice capital gain from selling a house in San Jose, has a healthy IRA he is cashing in, and has mutual funds tied to a money market account could maintain a hefty cash flow, yet report an income based solely on his Social Security payments.

Mortimer provided the data and a citation but not a link, and I have not been able to access the publication. However, what you say makes sense only if the data is based on income tax reports. However, if it is based on census data, then all money coming in should be counted. I suspect that it is census data for 2006 -- based on a sample. If you know the answer, please share it with me.

But suppose for the purpose of discussion that you are correct and the rankings are based on income tax reports. My house sale proceeds went into my place in Santa Fe. I deferred taxes on my IRA type funds and I am paying them now on every cent I take out. And that is the bulk of my income. The non-IRA type mutual funds and stocks -- only the original investment has was taxed before it went it. The gains are taxable. So it seems to me that the pot of non-reportable income is not as big as one might think.

But again supposing that retirees have large flows of non-taxable income. Las Cruces says it is a mecca for retirees with its warm income. So wouldn't they also have flows of non-reported (for income tax) income? And since us retirees in SF poured huge sums into our homes, don't we have less cash flow? So if we start supposing, shouldn't a Las Cruces zip code be up there on the ranking? And what about Ruidoso and Eagle Nest? So if we want to continue supposing, then we can put them up near the top. After all, do we really believe that Santa Fe's state employees are anywhere near as wealthy as the Texans who buy homes in NM's ski resorts?

And talking about non-reportable income -- what about the developers, architects, engineers, lawyers, bankers, et al., who are amassing wealth off the rapid growth of ABQ, LC, Ruidoso, Eagle Nest -- don't you think they have found some ways to hide that income from the tax people? (Somehow I think that these people are better at avoiding taxes than I am.)

The point is -- a lot of nonsense is posted on this board about how different Santa Fe is from everywhere else -- we have wealth. As if we are to imagine that prosperous, rapidly expanding cities and second home/ retirement meccas are all middle-class --with no wealth. Does anyone actually believe that?

I'll believe it when I see data. So far, I believe that we in SF do spend more on housing because there is something here that we are willing to pay for. But -- so far -- I see no reason to doubt that other cities have wealthier zip codes.

[Devin Bent]

Originally Posted by jsc23

A person living on the proceeds from sales of assets would not necessarily report the funds as income. For example, a retiree in Santa Fe who realized a nice capital gain from selling a house in San Jose, has a healthy IRA he is cashing in, and has mutual funds tied to a money market account could maintain a hefty cash flow, yet report an income based solely on his Social Security payments.

If I cash in my tax deferred funds, then I pay taxes on it. An IRA is tax-deferred, not tax free. You start taking the money out, then you pay taxes. I sincerely wish it was otherwise. (Is the IRS robbing me?) And the proceeds from the sale of my house went into a place here. So where is all this unreported income? Nowhere.

I should know. We are talking about me.

[jsc23]

An IRA is tax-deferred but the money put in was reported as income when earned. Capital gains are taxed, but as capital gains, not income. Liquidating stock or mutual fund shares may generate capital gains, but the money is not reported as income. Dividends, interest, rents, wages, etc. are income.

Census data does not tabulate liquid wealth other than income per capita and median household income. I could retire and live quite well if I had $50million in stock to sell (over time) and I could still report zero income....

Las Cruces and Santa Fe both have a lot of part-timers whose legal residences are elsewhere...

Look at the data for Aspen CO (one zip code) for 2005: median household income- $53,800, median house value- $1,167,000.00

Aspen looks downright poverty stricken compared to Los Alamos.

[Devin Bent]

Originally Posted by jsc23

An IRA is tax-deferred but the money put in was reported as income when earned. Capital gains are taxed, but as capital gains, not income. Liquidating stock or mutual fund shares may generate capital gains, but the money is not reported as income. Dividends, interest, rents, wages, etc. are income.

Census data does not tabulate liquid wealth other than income per capita and median household income. I could retire and live quite well if I had $50million in stock to sell (over time) and I could still report zero income....

Point is that I report capital gains on my income tax form. It has a different rate, but it is still taxable income, a type of taxable income, and is still reported.

I handled my investments well and 95% of what I pull out is taxable capital gains -- income.

If you don't believe me that capital gains are income, then read the following:

"There's a vague notion out there that capital gains aren't income because they're taxed at their own special rates. Folks are hoping, perhaps, that capital gains won't count when they determine whether they can deduct an IRA contribution, or how much of their social security benefit is taxable, or how much of their exemptions are phased out, among other things. Unfortunately, capital gains are income. A special calculation provides the lower capital gains rate, but doesn't remove capital gains from your overall income (or adjusted gross income)."

Source: Basic Questions About Capital Gains and Losses

[jsc23]

Originally Posted by Devin Bent

Point is that I report capital gains on my income tax form. It has a different rate, but it is still taxable income, a type of taxable income, and is still reported.

I handled my investments well and 95% of what I pull out is taxable capital gains -- income.

If you don't believe me that capital gains are income, then read the following:

"There's a vague notion out there that capital gains aren't income because they're taxed at their own special rates. Folks are hoping, perhaps, that capital gains won't count when they determine whether they can deduct an IRA contribution, or how much of their social security benefit is taxable, or how much of their exemptions are phased out, among other things. Unfortunately, capital gains are income. A special calculation provides the lower capital gains rate, but doesn't remove capital gains from your overall income (or adjusted gross income)."


Source: Basic Questions About Capital Gains and Losses

My bad... but still, it is more an error of semantics... perhaps I should have written "earned income". Nonetheless, Census stats do not include capital gains in their income reporting-

The following is from the US Census website (emphasis mine):

"Census money income is defined as income received on a regular basis (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, medicare deductions, etc. Therefore, money income does not reflect the fact that some families receive part of their income in the form of noncash benefits, such as food stamps, health benefits, subsidized housing, and goods produced and consumed on the farm. In addition, money income does not reflect the fact that noncash benefits are also received by some nonfarm residents which may take the form of the use of business transportation and facilities, full or partial payments by business for retirement programs, medical and educational expenses, etc. Data users should consider these elements when comparing income levels. Moreover, users should be aware that for many different reasons there is a tendency in household surveys for respondents to underreport their income. Based on an analysis of independently derived income estimates, the Census Bureau determined that respondents report income earned from wages or salaries much better than other sources of income and that the reported wage and salary income is nearly equal to independent estimates of aggregate income.
Census also derives alternative income measures that systematically remove or add various income components such as deducting payroll taxes and federal and state income taxes and including the value of specific noncash benefits B food stamps, school lunches, housing subsidies, health insurance programs, and return on home equity. These alternative measures are derived from information collected in Census surveys along with information from other agencies such as the Centers for Medicare and Medicaid Services (CMS), the U.S. Bureau of Labor Statistics, the U.S. Department of Agriculture, the U.S. Internal Revenue Service, and the U.S. Office of Personnel Management (OPM)."

Income - Overview

[jsc23]

to stave off a debate on what income is "earned"

"earned income" defined by IRS et al as income received as salaries, wages or earnings from employment or occupation.

Personally, I am not claiming gains on investment etc. are unearned