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Yep, I've done this myself. The risks are too high for the potential reward especially after government takes its cut. If you do take the risk plus hire more employees there are more responsibilities and expenses. That means that I don't keep putting money back into the business to grow it, alot because the government takes a portion of what could have been put back in.
I was going to do a few renovations, hiring a contractor and people to do the work but decided against it, instead opting to hold off if do it at all.
Many studies of human behavior have been done. I've read that the consensus is that by the time tax reaches 10%, it significantly influences our behavior in terms of decisions. At 30%, most simply will not work any harder to get the 70% left.
Yep, I've done this myself. The risks are too high for the potential reward especially after government takes its huge cut. If you do take the risk plus hire more employees there are more responsibilities and expenses. That means that I don't keep putting money back into the business to grow it, alot because the government takes a portion of what could have been put back in.
Back in early 2012 I was going to do a few renovations, hiring a contractor and people to do the work but decided against it, instead opting to hold off if do it at all.
Another key is having no debt.
No debt means you need less to live on.
Get rid if some discretionary spending.
No landline phone..only have cellphone and not a smartphone either since I only use it to actually make phone calls
No cable..I use the internet since most of the shows are online a week or so after being on TV.
I live on ag exempt property with a well and septic.
I have 4 bills a month I pay and no debt.
Good grief, there are so many confused people talking about this, who really don't have any idea what they mean when they mouth the platitudes... .so, let's try something that makes sense.
For a moment, let's make an assumption that you can't be any more "broke" than to have nothing - and by nothing, I mean nothing of any significant economic value. You can have clothes, even a cheap PC or tablet, a tv, and appliances, family keepsakes, etc, and it has a real value that approaches nothing. You could not sell it all in a rush sale and buy a car, a house, or pay rent for an extended period of time, etc.
So, let's say that if that's all you have, you have an economic worth of zero. You cannot get be worth less than that. Debts are obligations, but those can be discharged or remain unpaid - so, you can't be worth any less than nothing.
So, being worth nothing is poverty. But you have a job. So, you work at that menial job, and pays you $9.00 per hour, that's $1440 for 160 hour month. The home you live in (house, apartment, condo, mobile home... doens't matter) costs you $600 per month and you and your spouse consume the rest to eat, have clothes and heat and lights and water.
How much are you worth, economically? Still nothing.
Imagine your landlord agrees to sell you, on payments, your home. You make 600 dollar payments for 7 years and the apartment is yours. Now, what are you worth? My guesstimation? About $30,000. Now that you no longer pay rent, you can take your 1200 / mo (after taxes) and use what's left of it elsewhere. So, you begin to put that $600/mo into an investment. After 15 years of investing that money carefully, you are now worth about $250,000. Enough to start some pretty profitable businesses, or just keep saving for your future.
In 23 years, did you become middle class, or are you still in poverty? While your income would be, by all political standards, "poverty", you are, in fact, worth quite a bit. You became, despite a low income, "middle class". By living frugally, by judicious decisions, and by discipline and careful choices.
So why are so few blue collar people not middle class? It isn't the pay scale.
It's the fact that their house... they now pay 30 years of interest to buy a home that's overpriced by 2 to 20 times what they should, they pay all 600 a month in property and sales taxes instead of saving it. In that case, the state is 18,000 dollars richer... BUT you are 230,000 dollars poorer.
Where has the middle class gone? It has been taxed away, by taxing ownership. It's precisely that simple. The difference between the poor and middle class is not income, it is ownership and investment in ownership. And the difference between 30, 40, 50, 60 years ago, and today, is taxation.
In the 50's, the average person paid 2% of his income in federal income taxes. Property taxes were a little more, but not much. Limited availability of cheap loans kept the price of real estate from skyrocketing in most places. Thus, ownership was within reach of most who wanted. And once ownership was achieved, taxation of ownership was small and easily affordable.
Across the street from me is a house for sale. It's been for sale for 1.5 years. I live in a blue collar neighborhood. The payments would only be $750 / mo to own it. Except for the taxes. The taxes push the cost of ownership to 1100/mo and it goes up every other year, by quite a bit.
Where has the middle class gone? It is being taxed out of existence. Instead of owning, the middle class rents from either the state or the bank, or wealthy person, enriching them, but impoverishing himself.
Question answered.
Now what is your solution? More debt? Easier loans? It's worked so well up to now, hasn't it?
Most of your posts are pretty good.
You're not going to get this one past anyone who has seen their 40th birthday and hasn't spent the last 20 years in hibernation.
Good grief, there are so many confused people talking about this, who really don't have any idea what they mean when they mouth the platitudes... .so, let's try something that makes sense.
For a moment, let's make an assumption that you can't be any more "broke" than to have nothing - and by nothing, I mean nothing of any significant economic value. You can have clothes, even a cheap PC or tablet, a tv, and appliances, family keepsakes, etc, and it has a real value that approaches nothing. You could not sell it all in a rush sale and buy a car, a house, or pay rent for an extended period of time, etc.
So, let's say that if that's all you have, you have an economic worth of zero. You cannot get be worth less than that. Debts are obligations, but those can be discharged or remain unpaid - so, you can't be worth any less than nothing.
So, being worth nothing is poverty. But you have a job. So, you work at that menial job, and pays you $9.00 per hour, that's $1440 for 160 hour month. The home you live in (house, apartment, condo, mobile home... doens't matter) costs you $600 per month and you and your spouse consume the rest to eat, have clothes and heat and lights and water.
How much are you worth, economically? Still nothing.
Imagine your landlord agrees to sell you, on payments, your home. You make 600 dollar payments for 7 years and the apartment is yours. Now, what are you worth? My guesstimation? About $30,000. Now that you no longer pay rent, you can take your 1200 / mo (after taxes) and use what's left of it elsewhere. So, you begin to put that $600/mo into an investment. After 15 years of investing that money carefully, you are now worth about $250,000. Enough to start some pretty profitable businesses, or just keep saving for your future.
In 23 years, did you become middle class, or are you still in poverty? While your income would be, by all political standards, "poverty", you are, in fact, worth quite a bit. You became, despite a low income, "middle class". By living frugally, by judicious decisions, and by discipline and careful choices.
So why are so few blue collar people not middle class? It isn't the pay scale.
It's the fact that their house... they now pay 30 years of interest to buy a home that's overpriced by 2 to 20 times what they should, they pay all 600 a month in property and sales taxes instead of saving it. In that case, the state is 18,000 dollars richer... BUT you are 230,000 dollars poorer.
Where has the middle class gone? It has been taxed away, by taxing ownership. It's precisely that simple. The difference between the poor and middle class is not income, it is ownership and investment in ownership. And the difference between 30, 40, 50, 60 years ago, and today, is taxation.
In the 50's, the average person paid 2% of his income in federal income taxes. Property taxes were a little more, but not much. Limited availability of cheap loans kept the price of real estate from skyrocketing in most places. Thus, ownership was within reach of most who wanted. And once ownership was achieved, taxation of ownership was small and easily affordable.
Across the street from me is a house for sale. It's been for sale for 1.5 years. I live in a blue collar neighborhood. The payments would only be $750 / mo to own it. Except for the taxes. The taxes push the cost of ownership to 1100/mo and it goes up every other year, by quite a bit.
Where has the middle class gone? It is being taxed out of existence. Instead of owning, the middle class rents from either the state or the bank, or wealthy person, enriching them, but impoverishing himself.
Question answered.
Now what is your solution? More debt? Easier loans? It's worked so well up to now, hasn't it?
Wages for the middle and lower class are much lower than they should be, but aside from that I agree about property taxes. That's why I consider Texas to be a high tax state. The property taxes are about 3%. Over 30 years, you've paid the value of your house in taxes.
Since I"m well beyond 40 myself. Tell me why demonstrating how and why taxes on ownership destroy the middle class is incomprehensible.
Because the masses are being told they aren't being taxed.
The taxes are being put on the wealthy people, not them.
And they go off on their merry way.
AMT now hits people making about $50K a year..that's now "wealthy" ?
Those younger folks don't know the history of AMT and now think $50K IS wealthy.
Those younger folks don't know that we used to be able to deduct all interest paid on all types of loans.
Sure your property value went down but then the city/county raises the tax.
I got priced out of the Austin area. My property taxes more than doubled in about 10 years due to all the growth and additional services.
Those younger than 40 don't see the creep of taxes. They accept the taxes, pay the taxes and then listen to the government tell them the rich aren't paying enough taxes.
Since I"m well beyond 40 myself. Tell me why demonstrating how and why taxes on ownership destroy the middle class is incomprehensible.
Well we could start with asking on what planet do "you make 600 dollar payments for 7 years and the apartment is yours."? Ridiculous is not a sufficient word.
Look, if you're well past 40, you know better, but nonetheless choose to carry water for the Big Business multi-nationals....who have been pillaging at will for 25+ years. Channeling massive amounts of wealth away from average Americans through offshore and illegal labor exploitation - an evil that, beginning early in the last century, we spent many decades getting under some semblance of control. Then along came Ronald Reagan with his pledge to get the government "off the backs" of business, naively trusting them to do the right thing. They didn't....and now we have this.
Sure - taxes are too high. But blaming taxes for the disappearance of the middle class is like blaming the dearth of lifeboats for the collision of Titanic with the iceberg.
Well we could start with asking on what planet do "you make 600 dollar payments for 7 years and the apartment is yours."? Ridiculous is not a sufficient word.
Look, if you're well past 40, you know better, but nonetheless choose to carry water for the Big Business multi-nationals....who have been pillaging at will for 25+ years. Channeling massive amounts of wealth away from average Americans through offshore and illegal labor exploitation - an evil that, beginning early in the last century, we spent many decades getting under some semblance of control. Then along came Ronald Reagan with his pledge to get the government "off the backs" of business, naively trusting them to do the right thing. They didn't....and now we have this.
Sure - taxes are too high. But blaming taxes for the disappearance of the middle class is like blaming the dearth of lifeboats for the collision of Titanic with the iceberg.
If you are going to blame Reagan for making a mistake you should also blame succeeding Presidents for not fixing that mistake.
Well we could start with asking on what planet do "you make 600 dollar payments for 7 years and the apartment is yours."? Ridiculous is not a sufficient word.
The planet I live on. I sold my old house in Oregon for smaller payments... but longer term, to some folks hit hard who would never be able to qualify for a loan.
Is is the message that makes you angry, so you nitpick, or do you just want a verbal fight?
Quote:
Look, if you're well past 40, you know better, but nonetheless choose to carry water for the Big Business multi-nationals....who have been pillaging at will for 25+ years. Channeling massive amounts of wealth away from average Americans through offshore and illegal labor exploitation - an evil that, beginning early in the last century, we spent many decades getting under some semblance of control. Then along came Ronald Reagan with his pledge to get the government "off the backs" of business, naively trusting them to do the right thing. They didn't....and now we have this.
Well, you're going to have to explain the mechanisms of how this happens. Having run a corporation before, I dreadfully failed at finding a way to seize people's money and channel it off somewhere. So, teach me how to do it.
Quote:
Sure - taxes are too high. But blaming taxes for the disappearance of the middle class is like blaming the dearth of lifeboats for the collision of Titanic with the iceberg.
Are you going to attempt to make a logical argument that taxes are NOT responsible, or are you just stuck on making silly metaphors?
And, while you're at it, perhaps you could acknowledge a WHO LOT OF OTHER things that are in there as well. Like government sponsored debt, inflated real estate, etc, etc, etc.
If you are going to blame Reagan for making a mistake you should also blame succeeding Presidents for not fixing that mistake.
I'm not blaming Reagan personally - it's just that that sea change in our direction happened under his watch.
I have no reason to doubt his good intentions. But his zealous idealism and naivete led to misplaced trust that has crippled this nation.
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