Now I don't live in the states so i don't really give a crap about the taxation policy but as long as the upfront tax cut you're getting is more than the increase in capital gains tax you're in the money
This is in essence the crux of the problem but it gets a bit complicated since the tax cuts work on all your income, not just the portion that you would invest. The fact that income isn't taxed at a flat % means that a change in marginal tax rates will change the average tax rate paid differently per person depending on their income as this is the weighted average of each marginal tax rate.
Not only that but one must take into account the portion of income an individual puts into savings and that which is used for consumption.
Thus the net benefit from this policy would be the present value of the capital gains lost (actually the formula can be truncated to increase in cap gains tax * amount invested in a relevant instrument) versus the upfront benefit of lower taxes paid in an optimal allocation of income.
One can see now why this is nearly impossible to solve as the optimal allocation is unique to each individual.
It can be generalized however that the more one saves, the more hurt you are by this policy ignoring contributions to 401ks and IRAs which are taxed as income at retirement.
To summarize all of my ranting, if the new tax policy saves you 2% in average tax payable a year your break even point assuming an increase in capital gains tax of 15% would be investing 2/15 of your after tax income in capital assets which are affected by this policy, invest more you are hurt, invest less you are better off.
This is an extreme generalization as it does not take into account the benefits you gain from reallocating your consumption/savings and the type of savings which you can use (tax free investments, bonds which pay interest as opposed to cap gain unless of course you sell them before maturity, etc.)
I'm going to go out on a limb here however and say that this policy is good just because most Americans don't save nearly enough for this policy to hurt them, and not all savings are capital in nature. One also must take into account that the laws affecting capital gains tax may change in the future but the tax savings from lower marginal tax rates are immediate and irreversible.
So to sum up ... again ... the answer to this question is .... wait for it ... MAYBE ...
wow what a political answer, maybe i should run for president
Fill unused freezer space with containers of salt water. Salt water will thaw faster tan your food. It's amazing how long the food will last if the freezer is full of heavy stuff that thaws faster than the food.
Ben-Shahar talks a good bit about finding and emphasizing the things that make you happy in the present while also making progress toward your longer-term goals.
I do that too, actually, especially in my posts about work, such as Find work worth doing.
The main difference is that I lean toward the pie-in-the-sky strategy of doing whatever it takes--changing your life as much as necessary--to get to where your whole life is arranged that way. Ben-Shahar takes a more pragmatic line, offering practial strategies for dealing with those periods in your life where a lot of what you need to do only makes progress toward longer-term goals.
I cant believe anyone is for any type of tax that is basically the redistribution of wealth. I really hate how this country is turning into a socialistic cesspool.
Everyone is all about asking "what is the new president going to do for me?" Whatever happened to caring more about the country as a whole? I really wish a real candidate would talk about the Fair tax, but i know that is only in a fantasy land.
In general, its very foolish to raise taxes for anyone. In general as a country, we need less spending from the government, which in turn means less programs and less taxes. The more money everyone gets to keep out of the paycheck, the better for the economy and population in general.
"Why would we need the Federal Reserve? The whole point is to manipulate the money system in order to have a more stable economy. Tell me… is the economy stable? Was the economy stable in 1929 and the “Dirty 30’s”? The Federal Reserve has never done a good job."
You can only defer happiness so long. I try to do what is best at the time AND for later. It's the best of both worlds, the same is true of my investing, I want good short and long term rewards.
Just for those who expressed some sadness about buying things this way, a comment from the other side of the fence.
My mother when she was 97 finally had to leave her home and come and live with us . She passed away just a few weeks ago and the six months prior we started sorting her things and especially the furniture etc giving away via Freecycle. Of course she was sad about finally having to leave her home but it really was offset by knowing just where her things were going.
Without exception the people who came and took different items all sent such lovely emails of thanks, many of them have kept in contact to say how they were re-finishing some of the old furniture items etc. Althugh she had some regrets my mother actually was so happy to see that there were people who valued and appreciated her things so it really wasn't "graverobbing" or macabre or anything like that. Her view was that she had no need of these things now but it pleased her to think that they were getting a new lease of life and would be part of the cycle.
So. . . I am sure that many elderly people have this attitude too and so please I don't think it is morbid at all to be making use of the circumstances where people have to sell some their things when they go into retirement homes or after they have passed.
As my mother said, her memories are in her head and not in physical items, but each of the items has been part of a very long and happy life and therefore she felt pleased that they would go on to someone else and maybe bring into other lives some of the happy "vibes" they had absorbed over the years!
To the iron stain: have you tried shaving off the burnt part of the rug with a razor? My friends and I did this to a white carpet after scrubbing too hard to get the wine stains out; any disposable razor works, but it does take a lot of time.
For lime build up, the only thing I've ever used that works is CLR (Calcium, Lime, Rust) remover. It worked on getting the limescale out of the toilet (without ruining the toilet), and also works on hard water stains. It didin't, however, remove the crusted on soap I found on the glass door at my in-laws; a razor is likely the only thing that would remove it (I even tried a soft pumice stone, which eventually worked, but took 20 minutes for a 2" area).
I have read several books on a similar subject recently and they really have helped me happier by just reading them. What i have realised though is we all already know this stuff we just seem to convenietly forget it in our day to day lives.
I haven't read this particular book but from the sounds of it it would be well worth reading.
Republicans are more business friendly when it comes to taxation policies, however the Republicans squandered public trust in their party with eight incompetant years. Obama will talk about doubling capital gains, but won't get that far. He'll probably raise it slightly, but small business owners and large corporate executives will fight him tooth and nail and keep the increase small.
The populist rhetoric is dangerous, people like the idea of depending on government, but governments are incompetant. Giving my money to the government to help the poor or the elderly sounds great, except that people working for the government can't work anywhere else. That sort of stupidity keeps me from being liberal in my economic views. Increasing taxes won't help the public, it'll only help the government.
When I was a kid I got an allowance, but it was always as credit. I never had cash in my hand, unless I pestered my parents to give it to me, and I was never really sure how much I had available to me. We would go to the toy store to cash out my allowance in the form of Barbie's or whatever else I wanted. I really don't think it was the best way for me to learn about money.
I have found, as an adult, that paying for things with cash that I've worked hard for and saved, is a lot different than paying for things with credit. I really wish that my parents had allowed me to discover this on my own at an earlier age. I also wish that they had encouraged me to open a savings account and deposit money in it.
These are all things that I plan on doing differently when I have children of my own.
Being a fairly recent college student (I just graduated) there were times that I would run out of money, cash or in the bank, and was forced to pay for things with the quarters that I raided from my piggy bank. I got lots of nasty looks and lots of laughs for carrying around my $30 worth of change in a plastic baggie, but change spends the same as cash and I wasn't willing to pay the Coinstar fee to change it into cash.
If you live in Cali, try Straus. They don't homogenize their milk, but it's the best I've found. They're also big on the humane treatment of their cows, which is my only concern when purchasing dairy products. Please check out their site for more information. It does cost a lot more, but I find it to be well worth it.
Because thrift stores get donations from certain groups - you can sort of scope out what sort of merchandise to look for - My husband has taken to shopping in a certain thrift shop in the W. Valley in L.A., for example - because he finds great deals in men's clothing there! My local Out of the Closet has fashionable items - and a Salvation Army in Pasadena gets extra new merchandise from wholesalers, it seems. (I got a jacket there for $7 I saw in Ojai for $80!!) There are also lots of imports - shoes lately...so I look for that. Other shops catering to senior citizen donors may have collectibles - old books, etc. Some have good paperbacks - At a thrift shop in Bakersfield I got good deals on vintage and esoteric things because the demand was for practical items like baby clothes! And there are a lot of retirees in the Oxnard/Ventura area that are downsizing - or donating estates....(Lots of great golf shirts for my husband there.) You get the idea - you also can see pricing trends...And whether they have sales or not -
Wow, I did this with a nevada address and it saved at least 5$ in the taxes and fees for my verizon service! is this even legal? Maybe its just sneaky. But it worked!
On the surface, this sounds great and feels good. Upon further reflection, it feels and reads like the "wisdom" of a young, naive person. Good luck to you.
a key scratch is paint removed so it is not really a dent, if you have a dent al or most material is still there, if you have a (key) scratch there is material gone.
I remember when I was a kid, my father seemed like the owner of his company. He worked so hard that I thought he was making tons of money. I didn't realize that he wasn't making as much or nearly close to as much as I had once thought.
In fact I lived a fairly simple life. As a kid I had everything I needed. I would play out back I had a tree I climbed, played baseball with my friends and I was involved in recreational activities. I remember the first time that I realized we didn't have the money I once thought. It was Christmas and I had asked for my first electronic gaming system, which at that time it seemed like everyone in my neighborhood had one. When Christmas rolled around and I didn't get my gift I was depressed. I was young and naive and asked my parents about it and they said they were unable to get it, but if I saved my money up I could buy one for myself. It was from that point on that I began saving money. In fact a couple of years later I started my own company numbering curbs in my neighborhood.
I think it is kind of funny how vivid this memory plays out in my head. I hope my kids learn the value of money the same way I did.
After searching most of the thrift and vintage stores in Manhattan for a blouse to wear to the Tony Awards and coming up empty, I scored the perfect blouse the day before the event for $5 at a sidewalk sale in my neighborhood! You never know where you will find a bargain.
Your daughter sounds a lot like my 9 year old, Edgertonsc.
I pointed out many of the things you identified in past discussions with my daughter too. She once freaked out when she overheard me discussing the credit card bills after the holidays with my hubby- and she was very worried about us losing our home. I had to explain to her how we do live within our means- but we needed to get back on track after some extra purchases during the holidays.
I used to go shopping for goods when I would go out for a themed night. I usually found some great outfits and more when I went shopping. In one instant I found a pair of boots that were just my size. I also found some other trinkets that I probably shouldn't have bought. It was cheap, though so I don't feel too guilty.
Here are two things that will erode thrift store things in an area. Lots of people buying particle board furniture and people buying clothes at Walmart.
Most people don't really want those second hand because they don't really last and they were cheap to begin with. Some thrift stores end up selling these items for the same price as designer clothes and good wood furniture.
Great information here, especially with the possibility of so much stormy weather in the summer.
Also, props to MSU. Go Green! :-P
Now I don't live in the states so i don't really give a crap about the taxation policy but as long as the upfront tax cut you're getting is more than the increase in capital gains tax you're in the money
This is in essence the crux of the problem but it gets a bit complicated since the tax cuts work on all your income, not just the portion that you would invest. The fact that income isn't taxed at a flat % means that a change in marginal tax rates will change the average tax rate paid differently per person depending on their income as this is the weighted average of each marginal tax rate.
Not only that but one must take into account the portion of income an individual puts into savings and that which is used for consumption.
Thus the net benefit from this policy would be the present value of the capital gains lost (actually the formula can be truncated to increase in cap gains tax * amount invested in a relevant instrument) versus the upfront benefit of lower taxes paid in an optimal allocation of income.
One can see now why this is nearly impossible to solve as the optimal allocation is unique to each individual.
It can be generalized however that the more one saves, the more hurt you are by this policy ignoring contributions to 401ks and IRAs which are taxed as income at retirement.
To summarize all of my ranting, if the new tax policy saves you 2% in average tax payable a year your break even point assuming an increase in capital gains tax of 15% would be investing 2/15 of your after tax income in capital assets which are affected by this policy, invest more you are hurt, invest less you are better off.
This is an extreme generalization as it does not take into account the benefits you gain from reallocating your consumption/savings and the type of savings which you can use (tax free investments, bonds which pay interest as opposed to cap gain unless of course you sell them before maturity, etc.)
I'm going to go out on a limb here however and say that this policy is good just because most Americans don't save nearly enough for this policy to hurt them, and not all savings are capital in nature. One also must take into account that the laws affecting capital gains tax may change in the future but the tax savings from lower marginal tax rates are immediate and irreversible.
So to sum up ... again ... the answer to this question is .... wait for it ... MAYBE ...
wow what a political answer, maybe i should run for president
Fill unused freezer space with containers of salt water. Salt water will thaw faster tan your food. It's amazing how long the food will last if the freezer is full of heavy stuff that thaws faster than the food.
Ben-Shahar talks a good bit about finding and emphasizing the things that make you happy in the present while also making progress toward your longer-term goals.
I do that too, actually, especially in my posts about work, such as Find work worth doing.
The main difference is that I lean toward the pie-in-the-sky strategy of doing whatever it takes--changing your life as much as necessary--to get to where your whole life is arranged that way. Ben-Shahar takes a more pragmatic line, offering practial strategies for dealing with those periods in your life where a lot of what you need to do only makes progress toward longer-term goals.
I cant believe anyone is for any type of tax that is basically the redistribution of wealth. I really hate how this country is turning into a socialistic cesspool.
Everyone is all about asking "what is the new president going to do for me?" Whatever happened to caring more about the country as a whole? I really wish a real candidate would talk about the Fair tax, but i know that is only in a fantasy land.
In general, its very foolish to raise taxes for anyone. In general as a country, we need less spending from the government, which in turn means less programs and less taxes. The more money everyone gets to keep out of the paycheck, the better for the economy and population in general.
@Joe,
Well said.
"Why would we need the Federal Reserve? The whole point is to manipulate the money system in order to have a more stable economy. Tell me… is the economy stable? Was the economy stable in 1929 and the “Dirty 30’s”? The Federal Reserve has never done a good job."
We need a revolution!
You can only defer happiness so long. I try to do what is best at the time AND for later. It's the best of both worlds, the same is true of my investing, I want good short and long term rewards.
Just for those who expressed some sadness about buying things this way, a comment from the other side of the fence.
My mother when she was 97 finally had to leave her home and come and live with us . She passed away just a few weeks ago and the six months prior we started sorting her things and especially the furniture etc giving away via Freecycle. Of course she was sad about finally having to leave her home but it really was offset by knowing just where her things were going.
Without exception the people who came and took different items all sent such lovely emails of thanks, many of them have kept in contact to say how they were re-finishing some of the old furniture items etc. Althugh she had some regrets my mother actually was so happy to see that there were people who valued and appreciated her things so it really wasn't "graverobbing" or macabre or anything like that. Her view was that she had no need of these things now but it pleased her to think that they were getting a new lease of life and would be part of the cycle.
So. . . I am sure that many elderly people have this attitude too and so please I don't think it is morbid at all to be making use of the circumstances where people have to sell some their things when they go into retirement homes or after they have passed.
As my mother said, her memories are in her head and not in physical items, but each of the items has been part of a very long and happy life and therefore she felt pleased that they would go on to someone else and maybe bring into other lives some of the happy "vibes" they had absorbed over the years!
To the iron stain: have you tried shaving off the burnt part of the rug with a razor? My friends and I did this to a white carpet after scrubbing too hard to get the wine stains out; any disposable razor works, but it does take a lot of time.
For lime build up, the only thing I've ever used that works is CLR (Calcium, Lime, Rust) remover. It worked on getting the limescale out of the toilet (without ruining the toilet), and also works on hard water stains. It didin't, however, remove the crusted on soap I found on the glass door at my in-laws; a razor is likely the only thing that would remove it (I even tried a soft pumice stone, which eventually worked, but took 20 minutes for a 2" area).
Here is a another good site for DIY cleaners: http://www.cdc.gov/nasd/docs/d001201-d001300/d001243/d001243.html
I have read several books on a similar subject recently and they really have helped me happier by just reading them. What i have realised though is we all already know this stuff we just seem to convenietly forget it in our day to day lives.
I haven't read this particular book but from the sounds of it it would be well worth reading.
Republicans are more business friendly when it comes to taxation policies, however the Republicans squandered public trust in their party with eight incompetant years. Obama will talk about doubling capital gains, but won't get that far. He'll probably raise it slightly, but small business owners and large corporate executives will fight him tooth and nail and keep the increase small.
The populist rhetoric is dangerous, people like the idea of depending on government, but governments are incompetant. Giving my money to the government to help the poor or the elderly sounds great, except that people working for the government can't work anywhere else. That sort of stupidity keeps me from being liberal in my economic views. Increasing taxes won't help the public, it'll only help the government.
omg these are the most ugliest shoes ever!!!
When I was a kid I got an allowance, but it was always as credit. I never had cash in my hand, unless I pestered my parents to give it to me, and I was never really sure how much I had available to me. We would go to the toy store to cash out my allowance in the form of Barbie's or whatever else I wanted. I really don't think it was the best way for me to learn about money.
I have found, as an adult, that paying for things with cash that I've worked hard for and saved, is a lot different than paying for things with credit. I really wish that my parents had allowed me to discover this on my own at an earlier age. I also wish that they had encouraged me to open a savings account and deposit money in it.
These are all things that I plan on doing differently when I have children of my own.
This sounds like a book everyone should read. I think I'll have to pick up a copy at the library. Thanks Philip!
Being a fairly recent college student (I just graduated) there were times that I would run out of money, cash or in the bank, and was forced to pay for things with the quarters that I raided from my piggy bank. I got lots of nasty looks and lots of laughs for carrying around my $30 worth of change in a plastic baggie, but change spends the same as cash and I wasn't willing to pay the Coinstar fee to change it into cash.
If you live in Cali, try Straus. They don't homogenize their milk, but it's the best I've found. They're also big on the humane treatment of their cows, which is my only concern when purchasing dairy products. Please check out their site for more information. It does cost a lot more, but I find it to be well worth it.
http://www.strausfamilycreamery.com/
Because thrift stores get donations from certain groups - you can sort of scope out what sort of merchandise to look for - My husband has taken to shopping in a certain thrift shop in the W. Valley in L.A., for example - because he finds great deals in men's clothing there! My local Out of the Closet has fashionable items - and a Salvation Army in Pasadena gets extra new merchandise from wholesalers, it seems. (I got a jacket there for $7 I saw in Ojai for $80!!) There are also lots of imports - shoes lately...so I look for that. Other shops catering to senior citizen donors may have collectibles - old books, etc. Some have good paperbacks - At a thrift shop in Bakersfield I got good deals on vintage and esoteric things because the demand was for practical items like baby clothes! And there are a lot of retirees in the Oxnard/Ventura area that are downsizing - or donating estates....(Lots of great golf shirts for my husband there.) You get the idea - you also can see pricing trends...And whether they have sales or not -
Wow, I did this with a nevada address and it saved at least 5$ in the taxes and fees for my verizon service! is this even legal? Maybe its just sneaky. But it worked!
On the surface, this sounds great and feels good. Upon further reflection, it feels and reads like the "wisdom" of a young, naive person. Good luck to you.
a key scratch is paint removed so it is not really a dent, if you have a dent al or most material is still there, if you have a (key) scratch there is material gone.
I remember when I was a kid, my father seemed like the owner of his company. He worked so hard that I thought he was making tons of money. I didn't realize that he wasn't making as much or nearly close to as much as I had once thought.
In fact I lived a fairly simple life. As a kid I had everything I needed. I would play out back I had a tree I climbed, played baseball with my friends and I was involved in recreational activities. I remember the first time that I realized we didn't have the money I once thought. It was Christmas and I had asked for my first electronic gaming system, which at that time it seemed like everyone in my neighborhood had one. When Christmas rolled around and I didn't get my gift I was depressed. I was young and naive and asked my parents about it and they said they were unable to get it, but if I saved my money up I could buy one for myself. It was from that point on that I began saving money. In fact a couple of years later I started my own company numbering curbs in my neighborhood.
I think it is kind of funny how vivid this memory plays out in my head. I hope my kids learn the value of money the same way I did.
After searching most of the thrift and vintage stores in Manhattan for a blouse to wear to the Tony Awards and coming up empty, I scored the perfect blouse the day before the event for $5 at a sidewalk sale in my neighborhood! You never know where you will find a bargain.
Your daughter sounds a lot like my 9 year old, Edgertonsc.
I pointed out many of the things you identified in past discussions with my daughter too. She once freaked out when she overheard me discussing the credit card bills after the holidays with my hubby- and she was very worried about us losing our home. I had to explain to her how we do live within our means- but we needed to get back on track after some extra purchases during the holidays.
I used to go shopping for goods when I would go out for a themed night. I usually found some great outfits and more when I went shopping. In one instant I found a pair of boots that were just my size. I also found some other trinkets that I probably shouldn't have bought. It was cheap, though so I don't feel too guilty.
Here are two things that will erode thrift store things in an area. Lots of people buying particle board furniture and people buying clothes at Walmart.
Most people don't really want those second hand because they don't really last and they were cheap to begin with. Some thrift stores end up selling these items for the same price as designer clothes and good wood furniture.