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Old 01-15-2012, 11:45 AM
 
7,150 posts, read 10,836,109 times
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Quote:
Originally Posted by Ultrarunner View Post
I wouldn't call Sales Tax a productivity tax...

Although, given the option, I would much prefer a tax that is based on some type of active activity... i.e the more I spend or earn the greater my tax contribution...
Although the term "sin-tax" raises hackles for some reason among flag wavers -- as if any level of consumption is acceptable for Americans, indeed over-consumption seems a badge of honor -- this to me is the only reasonable stair-stepping of taxes beyond a basic graduated tax for earnings. There are a plethora of ridiculously unnecessary consumptions that our culture indulges in which not only are injurious to the individual consumers (and thus taking some toll on society at large) but which are grossly injurious to the environment we leave to future generations.

Quote:
Originally Posted by Ultrarunner View Post
Taxing someone based solely on opinion of value is just wrong...
No kidding! If one is to accept taxation based on opinionation, see above comment on sin tax. While difficult to create a precise accounting of one "sin" relative to another, the basic worth of something clearly destructive vs. beneficial is not hard to arrive at. Cigarettes, booze, sugar and salt snacks, -- and even gasoline beyond a basic allotment -- are examples of huge revenue sources based on choice of lifestyle rather than need.

Quote:
Originally Posted by user_id View Post
... younger workers are already supporting those that are retired. ...
Yeah, and?

Quote:
Originally Posted by Ultrarunner View Post
...
Just as those that came before them built the cities and infrastructure for future generations to enjoy... I look at it as paying my dues...
Exactly. Thank you.

 
Old 01-15-2012, 01:28 PM
 
Location: Conejo Valley, CA
12,460 posts, read 19,991,104 times
Reputation: 4365
Quote:
Originally Posted by Ultrarunner View Post
Only if the old buy and hold and CA stats say the typical family moves every 7 years... don't know if this is still true as it was from 2008.
That number is more an urban myth than anything, try to find the source for that "stat". Every year around 9% of homeowners move, from this it would seem that "every 7 years" is a reasonable estimate...but it really isn't. Younger families tend to move more and particular people (because their careers) tend to move more as well, that is most of the moving is done by a particular cohort and not the whole.

Population Profile of the United States (http://www.census.gov/population/www/pop-profile/geomob.html - broken link)

Quote:
Originally Posted by Ultrarunner View Post
The beauty is the young can buy and hold too and they can do it today with 30 year mortgages in the 4% range which is unbelievable
The young, as a whole, don't have this pleasure since they have far higher employment turnover. Also, at least in California, the lower interest rates merely offset the inflated prices. The current situation puts home buyers in a bad situation as any increase in interest rates is going to put downward pressure on the value of their home.

Quote:
Originally Posted by Ultrarunner View Post
My neighbor bought in 82 with a 17% mortgage rate... talk about limiting ones options.
How is that? The high interest rates during that period put downward pressure on property values (adjusted for inflation) and this buyer could always refinance down the road. This is a far better situation than the one young buyers are in today.

Quote:
Originally Posted by Ultrarunner View Post
Just as those that came before them built the cities and infrastructure for future generations to enjoy...
The boomers, the current generation going into retirement, cut funding for infrastructure, cut funding for higher education, etc.....and now they want their full benefits and to shift the tax burden to younger workers. Though I don't blame them for trying to suck the young dry, its at the end of the day not going to happen and they are making their situation worse.
 
Old 01-15-2012, 01:39 PM
 
Location: Conejo Valley, CA
12,460 posts, read 19,991,104 times
Reputation: 4365
Quote:
Originally Posted by nullgeo View Post
No kidding! If one is to accept taxation based on opinionation, see above comment on sin tax.
He was referring to property taxes and property taxes aren't based on opinions...rather estimated value.

I don't have anything against "sin taxes", but they aren't a good revenue generator. Instead they should be used to deal with negative externalities. Property taxes on the other hand can provide sufficient revenue and distort the economy the least. Furthermore, they make the most sense, why exactly are we allowing people to make huge profits on natural resources? The value of land is derived from the entire community, yet we allow individuals and companies to collect the profit. But the current system is stable since we allow the masses to, in principle, own a small plot of land...


Quote:
Originally Posted by nullgeo View Post
Yeah, and?
Umm....the "and" can be found in the part that you omitted. Shifting the tax burden to the young in addition to the current benefits increase the burden on them. The young should never be asked to support older generations at higher standards of living than they can achieve......that is just generational theft.

Last edited by Ultrarunner; 01-15-2012 at 02:19 PM.. Reason: Mod Error
 
Old 01-15-2012, 02:05 PM
 
28,107 posts, read 63,380,777 times
Reputation: 23222
Quote:
Originally Posted by user_id View Post
That number is more an urban myth than anything, try to find the source for that "stat". Every year around 9% of homeowners move, from this it would seem that "every 7 years" is a reasonable estimate...but it really isn't. Younger families tend to move more and particular people (because their careers) tend to move more as well, that is most of the moving is done by a particular cohort and not the whole.

Population Profile of the United States (http://www.census.gov/population/www/pop-profile/geomob.html - broken link)
The statistic was sourced from the National Association of Realtors... the reason I mentioned it might be dated is because it is several years old and I personally know block after block of homes in my city where home owners walked away... many only "Owning" 3 or 4 years tops.


Quote:
The young, as a whole, don't have this pleasure since they have far higher employment turnover. Also, at least in California, the lower interest rates merely offset the inflated prices. The current situation puts home buyers in a bad situation as any increase in interest rates is going to put downward pressure on the value of their home.
I bought my first home while in college and working 3 jobs... sure it was in East Oakland and marked for condemnation... but, I bought it against the odds and it was mine... I see exactly the same situation existing today as when I started... record unemployment, economic uncertainty and a glut of homes on the market... with one huge difference... my first loan after I fixed the place was over 13% and today's rates are in the mid 3's

People have choices... if the price asked is too high... no one will buy and then prices will fall... self correcting system and exactly why supply and demand fluctuate.


Quote:
How is that? The high interest rates during that period put downward pressure on property values (adjusted for inflation) and this buyer could always refinance down the road. This is a far better situation than the one young buyers are in today.
Refinancing down the road isn't a given and many that take this route don't use the option prudently as the last decade proved by the flurry of serial refinances.

If you are interested in Real Estate in Oakland... I can show you homes, just like the one I bought that are selling today for the same price as in the late 80's and 90's and with interest rates at record lows... sounds like a win/win for someone wanting to own a home in one of the most expensive metro areas of the country.


Quote:
The boomers, the current generation going into retirement, cut funding for infrastructure, cut funding for higher education, etc.....and now they want their full benefits and to shift the tax burden to younger workers. Though I don't blame them for trying to suck the young dry, its at the end of the day not going to happen and they are making their situation worse.
Retirement is a foreign concept to me... no one in my family has ever received a pension... ever. We basically work till we can't up into our 70's or 80's and then die.

If you really want to see where money goes... look at the entire subsidized housing... my city has 80,000 plus...

A single parent, early 20's, a couple of kids, never worked a day and never filed a tax return receives the equivalent of between 60 and 65k income...

Housing
Food Subsidies
Health Insurance
Discount Utilities
School Meals
Day Care
Tuition Assistance
Job Training
Discount Phone
Credit Card for benefits
Discount Public Transportation

So a person that has never paid a dime into the system from monies earned gets a pass? Contrast that to the person that takes care of their family, has a modest home that is his/her pride and joy is vilified as not paying enough or isn't paying their fair share???

I do think the stage is being set and can see a time where those that do the right things and pay their own way will say enough is enough...

That line will be reached should the time come when taxes again drive people from their homes.
 
Old 01-15-2012, 02:26 PM
 
28,107 posts, read 63,380,777 times
Reputation: 23222
Quote:
Originally Posted by user_id View Post
He was referring to property taxes and property taxes aren't based on opinions...rather estimated value.
Best Guess or Informed Opinion of the county assessor was the basis of assessment prior to Prop 13.

Which in and of itself presents a problem...

The Law provides Specific Performance as an option in Real Estate Disputes because each parcel of Real Estate is seen as Unique...

Prop 13 addresses this by establishing the base line value at the time of transfer... not 5 or 10 years down the line... the process is put into motion by the transfer which is a real event...

Anything that relies on an Estimate is only an informed opinion at best.

The second point is comparables only deal with property that has been sold... it is no longer available so it does not make for an accurate estimation...

It this were not the case... I could easily argue the last home on my street sold in 2007 for $300 a square foot which has no bearing on what it would sell for today...
 
Old 01-15-2012, 04:02 PM
 
Location: Conejo Valley, CA
12,460 posts, read 19,991,104 times
Reputation: 4365
Quote:
Originally Posted by Ultrarunner View Post
The statistic was sourced from the National Association of Realtors...
I've never seen the report from them that contained it. The "stat" seems to be derived from the census information I cited in my last post using some odd assumptions. But I'd love to see the source for it!

Quote:
Originally Posted by Ultrarunner View Post
I see exactly the same situation existing today as when I started... record unemployment, economic uncertainty and a glut of homes on the market... with one huge difference...
Unless you grew up in the Depression then no, the situation isn't the same. There has been no period since the depression that has resulted in a liquidity trap that has depressed the economy for years:

Calculated Risk: BLS Employment Revisions on Feb 4th

It is disappointing the degree to which older Americans discount the amount problems this recession is causing for younger generations.

Quote:
Originally Posted by Ultrarunner View Post
People have choices... if the price asked is too high... no one will buy and then prices will fall... self correcting system and exactly why supply and demand fluctuate.
Except of course that the government is doing its best to keep the housing market from falling. The fed has purchased $1.2 trillion in mortgage securities, around 50% of mortgages in California are originated by FHA and VA, etc. If you removed the government support house prices in California would collapse...

But people are making choices, home sales in California have been anemic since the housing bubble collapsed as people are choosing to rent or move out of the state.

Quote:
Originally Posted by Ultrarunner View Post
Refinancing down the road isn't a given and many that take this route don't use the option prudently as the last decade proved by the flurry of serial refinances.
You're conflating cash-out refinancing with just a standard refinancing of your mortgage, two rather different animals. So long as someone still is gainfully employed and has good credit they will be able to refinance their mortgage once rates declined. Indeed, I think you'd find very very few people that had mortgages with ~15% rates in the 90's as everyone refinanced by then.

Quote:
Originally Posted by Ultrarunner View Post
If you are interested in Real Estate in Oakland... I can show you homes, just like the one I bought that are selling today for the same price as in the late 80's and 90's and with interest rates at record lows... sounds like a win/win for someone wanting to own a home in one of the most expensive metro areas of the country.
There are currently some areas in California where real estate has gotten rather cheap (back to 90's pricing), but these areas are also the areas with profound employment problems. What good does cheap real estate do for you if you can't get a job in the area? Though its certainly a good opportunity for retirees. A recent retiree that I know just bought a home for $75,000 in the Inland Empire....not a great house but not too bad either. But you can find $75,000 homes across the nation...so there is nothing particularly special about this.

Quote:
Originally Posted by Ultrarunner View Post
A single parent, early 20's, a couple of kids, never worked a day and never filed a tax return receives the equivalent of between 60 and 65k income...
These stories are just myths.... I have a number of relatives that have done rather poorly during this recession and nobody is receiving anything close to $60~$65k in state aid. One is a single parent with kids as well....

But how sick is this? Throwing the poor under the bus to justify the existence of unfair tax policies that give older and wealthier Californians large tax breaks?
 
Old 01-15-2012, 04:05 PM
 
7,704 posts, read 12,540,083 times
Reputation: 12300
Why don't Californians just vote Brown out?
 
Old 01-15-2012, 04:37 PM
 
28,107 posts, read 63,380,777 times
Reputation: 23222
Quote:
Originally Posted by user_id View Post
I've never seen the report from them that contained it. The "stat" seems to be derived from the census information I cited in my last post using some odd assumptions. But I'd love to see the source for it!
I read it in a NAR news letter... I've never been a Realtor in the interest of full disclosure...


Quote:
Unless you grew up in the Depression then no, the situation isn't the same. There has been no period since the depression that has resulted in a liquidity trap that has depressed the economy for years:

Calculated Risk: BLS Employment Revisions on Feb 4th
The early 80's had record unemployment not seen going all the way back to the Great Depression... firms were not hiring and interest rates were coming down from all time record highs... people were ecstatic to be able to get rid of 17% mortgage for a 14% mortgage.

Quote:
It is disappointing the degree to which older Americans discount the amount problems this recession is causing for younger generations.
I was thinking exactly the same thing about younger Americans...

Many seem to discount the time when every male was subject to the draft... the two nationwide energy crisis that paralyzed the country and people could not heat their homes in winter because fuel was simply not available... and of course the impossible cost of money if you could get a loan...

Many also conveniently forget that the typical home buyer had to have 20% down plus closing costs, 6 months living expenses in the bank, 3 years steady employment, 2 years for the same employer, the home had to appraise and have roof, pest and chimney clearances...


Quote:
Except of course that the government is doing its best to keep the housing market from falling. The fed has purchased $1.2 trillion in mortgage securities, around 50% of mortgages in California are originated by FHA and VA, etc. If you removed the government support house prices in California would collapse...

But people are making choices, home sales in California have been anemic since the housing bubble collapsed as people are choosing to rent or move out of the state.
I have never been a fan of buying only on credit... the policy of this country was we as a nation needed to encourage home ownership so that all citizens could realize the "Dream" People need to have some skin in the game... hard to fathom... but their are adults that have never filed an Income Tax return and others that receive back more than paid in... if anything.


Quote:
You're conflating cash-out refinancing with just a standard refinancing of your mortgage, two rather different animals. So long as someone still is gainfully employed and has good credit they will be able to refinance their mortgage once rates declined. Indeed, I think you'd find very very few people that had mortgages with ~15% rates in the 90's as everyone refinanced by then.
Not necessarily so... the home still had to appraise and if going FHA... it had to meet stricter guidelines... many were denied because unless they upgraded electrical service, installed earthquake retrofit measures and the big one... upgraded foundations... they no longer qualified... this was particularly a problem in areas with large amounts of older pre-WWII housing such as my city.


Quote:
There are currently some areas in California where real estate has gotten rather cheap (back to 90's pricing), but these areas are also the areas with profound employment problems. What good does cheap real estate do for you if you can't get a job in the area? Though its certainly a good opportunity for retirees. A recent retiree that I know just bought a home for $75,000 in the Inland Empire....not a great house but not too bad either. But you can find $75,000 homes across the nation...so there is nothing particularly special about this.
I wouldn't call the Bay Area a place with profound unemployment... and yet areas of Richmond and Oakland, the heart of the Bay Area, have seen huge price declines as other areas served by BART... like Pittsburg/Antioch.

Quote:
These stories are just myths.... I have a number of relatives that have done rather poorly during this recession and nobody is receiving anything close to $60~$65k in state aid. One is a single parent with kids as well....
The newspaper article went to great lengths to show why low income families are struggling and ran the numbers by showing a comparison to those receiving aid and why it is so hard to get out of the system...

Just the housing voucher for a family of 4 is $2,000 a month... then add health insurance which is close to another $1000... then add meal programs for another $400... etc.

Just these 3 examples total over $40,000

EDIT... might not have been clear... the story was comparing a family earning $60k to one maximizing assistance... remember a family earning 60k does not take home 60k... just the employee part of Social Security would take away a couple of thousand. In fact, the cut off for rent assistance for a family of 4 is around 60k in income.

Quote:
But how sick is this? Throwing the poor under the bus to justify the existence of unfair tax policies that give older and wealthier Californians large tax breaks?
Not sure what you mean?

Last edited by Ultrarunner; 01-15-2012 at 06:15 PM..
 
Old 01-15-2012, 06:29 PM
 
7,150 posts, read 10,836,109 times
Reputation: 3806
Quote:
Originally Posted by user_id View Post
He was referring to property taxes and property taxes aren't based on opinions...rather estimated value.

I don't have anything against "sin taxes", but they aren't a good revenue generator. Instead they should be used to deal with negative externalities. Property taxes on the other hand can provide sufficient revenue and distort the economy the least. Furthermore, they make the most sense, why exactly are we allowing people to make huge profits on natural resources? The value of land is derived from the entire community, yet we allow individuals and companies to collect the profit. But the current system is stable since we allow the masses to, in principle, own a small plot of land...

Umm....the "and" can be found in the part that you omitted. Shifting the tax burden to the young in addition to the current benefits increase the burden on them. The young should never be asked to support older generations at higher standards of living than they can achieve......that is just generational theft.
I knew what Ultra was referring to and I agree with him ... my experience over 40+ years of property ownership and taxpaying is that the estimated values are often very poorly estimated and amount to opinionation.

I disagree that sin taxes can't be a good revenue generator ... very much.
 
Old 01-16-2012, 02:41 AM
 
Location: Conejo Valley, CA
12,460 posts, read 19,991,104 times
Reputation: 4365
Quote:
Originally Posted by nullgeo View Post
I disagree that sin taxes can't be a good revenue generator ... very much.
You can disagree all you wish, but they are still poor revenue generators. Increasing sin taxes will alter people's consumption of the item being taxed as a result you can never get significant revenue from them. Just look at the revenue for tobacco taxes, despite high taxes the revenue keeps going down.

But there are moral issues as well, though it makes sense to use sin taxes to deal with negative externalities, using them to simply publish certain activities goes against a free society.

Last edited by user_id; 01-16-2012 at 03:11 AM..
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