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Cost of Living and Taxation or Something

ElJeffeElJeffe Moderator, ClubPA mod
edited July 2011 in Debate and/or Discourse
From the Debt Ceiling Ho! thread:
ElJeffe wrote:
Urcbub wrote:
ElJeffe wrote:
If you see two movies per month, eat out once per week, buy a video game or two, go to a bar, maybe hit Starbucks each morning, suddenly that $400 is gone.

Begin able to do all that each month sounds pretty sweet to me. But still, that is still a choice-over-necessity lifestyle. Starbucks every morning? Brew your own coffee and that expense is cut by 95%, etc. (except the first month where the cost of a coffeemaker will cut it by only 50%).

Oh, for fuck's sake, people.

Yes, it is nice to be able to do all that! I would like to be able to do all that!

That doesn't mean that doing all that is anything approaching "ridiculous", as Than is trying to portray it. Kids growing up in the ghetto don't sit there and go, "Man, someday I'm gonna be fuckin rich and you know what I'm gonna do? Every morning I'm gonna go to Starbucks and get me a fuckin coffee! Yeah man, I'mma be latte-rich! Fuck, maybe if my album goes double platinum I'll even get a scone up in this bitch!"

I think the useful distinction to draw is that $100,000 is wealthier than the average family by a considerable amount, but it isn't wealthy enough that the utility of additional funds is essentially nonexistent.

If someone is making $1,000,000 a year, they probably wouldn't notice if they suddenly made $900,000 a year or $1,100,000 a year so long as somebody came along and made some anonymous adjustments to their lifestyle to keep them out of debt. Maybe their $10,000 a year personal limo is replaced by a slightly cheaper $8,000 a year one? Whatever, at a certain income level additional money is worth virtually nothing, the only things to spend it on are status symbols. More money than that and its even sillier, you really think some CEO pulling in 30 million a year would notice if they only received 29 million or accidentally got 31 million? Only if their accountant told them.

On the other hand, someone making $100,000 a year, while certainly above average, would absolutely notice if they suddenly made $0 a year or $200,000 a year.

So let's just agree that if you're spending $30k a year on rent you've made a conscious choice to spend more on rent than is necessary, and $100,000 a year is above average but does not confer the "immunity to money" effect that significantly greater yearly incomes do.

Well, one might suggest that how much you spend on rent is only semi-voluntary, especially on the lower end. Moving is expensive and is a non-trivial decision to make. It's actually beyond the capacity of lower-income folks oftentimes, though admittedly it's generally possible for someone in the $100k income bracket to absorb the costs associated with moving.

That said, I'm not really comfortable calling that sort of thing a "luxury". It's not generally just a matter of moving two blocks and suddenly your rent drops by 50%. It often requires moving away from a metropolis, which can mean you're a good couple hours away from where you work. So now the "luxury" means not spending an extra four hours of your day sitting in traffic. "Well, just get a different job!" Okay, but that might not be possible, especially given what the economy might look like. (For example, anyone who says "well, just get a different job!" in the current environment and expects it to be trivial is likely either stupid or crazy.) It may also be the case that accepting a different job means taking a serious pay hit such that the money you save on housing is largely eaten up by the drop in income anyway, making the move nonsensical. Move far enough, end you're not just giving up the nice neighborhood, you may be giving up ready access to friends and family, too.

Yes, yes, this is all choice. But I think it's a bit much to refer to things like "sacrificing hours per day with your wife and kids because you're commuting" and "moving away from everybody you know" as luxuries in the same sense as things like fancy cars and expensive watches.

And that aside, how are we establishing the benchmark for "luxury", anyway? You can probably find a giant house somewhere in the country for well under $1000/month. Since it's possible to live in a large house for that price, why don't we consider that to be the baseline, and declare living in any place other than Bumfuck, Utah to be a luxury? You're living in a modest house in Illinois for $1200/month? Suck it up, Richie Rich, and pay more taxes! You shouldn't be paying more than $800/month, because that's what you would pay in Utah! You live in luxury, and we're going to tax you as such!

If you want to get really wacky, figure that you could live in some third-world country for pennies on the dollar. If you can find the money to pay off the local warlord, you can probably find a good 3/2 and just telecommute. Isn't living in the US at all a luxury?

Looking at the median cost of living and median income is a fairly arbitrary means of determining what constitutes "luxury". The cost of a house in Alabama means precisely dick to the guy living in the Bay Area, because no sane person considers living in Alabama a reasonable course of action for such a person.

I'm not saying that we need tweak our tax code around every regional cost of living quirk. I am saying that for purposes of determining what tax brackets to really nail with high rates by reason of representing genuinely well-off people, we should consider such things though, and make sure that an upper-class tax rate only hits upper-class people. I think the current national dialog sort of assumes a cut-off of $250k, and I think that's reasonable, because there is nowhere in the nation where that is not well above "very comfortable".

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ElJeffe on
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Posts

  • Muse Among MenMuse Among Men Suburban Bunny Princess? Its time for a new shtick Registered User regular
    I don't understand why someone would pay money for a large house. But it is a fairly popular luxury, at least where I live. McMansions, I think they are called. Bigger homes mean bigger rooms mean everything is spaced out further.

    "Dude I really gotta piss where's the john?"

    "Yeah totally its like 10 yards down the corridor past the monkey room and giant cat palace."

    I spent some nights with family that lived in large homes and I disliked having to run up and down stairs and through empty useless rooms just to get things.

  • LilnoobsLilnoobs Alpha Queue Registered User regular
    A 3k/month apartment in New York is a luxury. $150 jeans are a luxury. An Expedition or Navigator in downtown Chicago is a luxury.

    You are certainly making a lot of points everywhere that really don't help matters anywhere.

  • AtomikaAtomika not a robot. does not eat bugs!Registered User regular
    ElJeffe wrote:
    I'm not saying that we need tweak our tax code around every regional cost of living quirk. I am saying that for purposes of determining what tax brackets to really nail with high rates by reason of representing genuinely well-off people, we should consider such things though, and make sure that an upper-class tax rate only hits upper-class people. I think the current national dialog sort of assumes a cut-off of $250k, and I think that's reasonable, because there is nowhere in the nation where that is not well above "very comfortable".

    After seeing some of the data pertaining to income medians and top national rates, I probably wouldn't lose a lot of sleep over people being taxed heavier at the $250k+ range, single or combined really.

    Like you, I don't think "geographic proximity" is an inherent luxury, especially considering how often people switch employers in this economy. I, myself, have had three employers in the last 5 years, as far as an hour away, and as near as 10 minutes away.

    Not all jobs are available in all areas, and I don't think an hour+ commute is reasonable to ask of someone just to afford housing around the area they work within.

  • UrcbubUrcbub Registered User
    I was involved in the original, and my point remains the same:

    I don't see why you should receive tax breaks (or "considerations") because you choose to live in an expensive area (or made other choices that increased your cost of living). As I see it that is the same as rewarding people for making financially irresponsible decisions, and it's essentially a reward for choosing to live outside your means (or barely within them).

    100k was the sum we discussed, I think because another poster said it was his household income and he was living paycheck to paycheck in an expensive NYC apartment. And as such, 100k wasn't the income everyone else said it was, and it wasn't fair to tax him the same as a Dallas 100k person since cost of living in Dallas is lower.

  • JustinSane07JustinSane07 __BANNED USERS regular
    edited July 2011
    I took a 60% raise but increased my commute from 10-15 minutes to 1-1.5 hours. That's what, a 600% increase in my commute? Ridiculous.

    But at the same time, I was able to buy a new PC, a PS3, an expensive car and have a cruise planned with my room in the suites. I improved my quality of life considerably. All of these things also feel luxurious to me. They're not, in reality, but from where I was to where I am now? It's an incredible jump.

    JustinSane07 on
  • Muse Among MenMuse Among Men Suburban Bunny Princess? Its time for a new shtick Registered User regular
    edited July 2011
    After seeing the commutes some of my family take (so they can continue to live in their McMansions in the middle of nowhere) I have decided I would never live so far away from work, even if it meant living someplace more expensive that was smaller and not as nice.
    Not all jobs are available in all areas, and I don't think an hour+ commute is reasonable to ask of someone just to afford housing around the area they work within.

    I think that is what bothered me most about some of the arguments offered.

    Muse Among Men on
  • monikermoniker Registered User regular
    The thing is, a lot of COLA stuff takes assumptions that are almost impossible to really make a lot of the time. I mean, living in a city means you get way more public services available to you which cuts down on costs that a rural life has to actively take into account. However, rural life also means massive government subsidies and so forth which are even more total bullshit.

    There's also the question of how much your'e paying for scarce resources when the scarce resource is actually a tangible thing (safer neighborhood, better schools, better transit connection) versus an intangible thing such as status (I simply must live in the Gold Coast, not Lakeview or Wicker Park) which goes into decisions that really can't be taken into account for a lot of stuff. I'll definitely concede that commuting costs, especially time, are way undervalued in people's minds and statistics. However, unless you literally live above your shop you're going to be doing some sort of commute and I simply do not believe that holding time/travel type options constant it's impossible to find drastically variable rent/mortgage costs.

    So while cost of living is definitely a variable concern, there are still a lot of decisions that go into crossing various thresholds of luxury/necessity. And that's completely ignoring the fact that none of this holds constant over periods of time. Student loans get paid off and then that becomes pocket money. Mortgage payments + property tax eventually just become property tax + new appliances. Your assets are able to accrue without having that impact your overall tax rate. So maybe something is a relatively unfair rate when you're just starting out in your career, but a decade or two on it becomes far less burdensome.

  • PotatoNinjaPotatoNinja Fake Gamer Goat Registered User regular
    ElJeffe wrote:

    And that aside, how are we establishing the benchmark for "luxury", anyway?

    I think "luxury" means different things in an economics context and a general discussion content. "Luxury" isn't meant to imply that you should or shouldn't have something. Having a $30,000 a year apartment is a "luxury" in the sense that it isn't necessary by human standards or by our social standards. You can rent an apartment for less than $30,000 a year and you won't sacrifice any necessary elements of housing nor will you fall beneath the generally accepted standards of society. My apartment is in many ways a "luxury," I could rent someplace nearby for less or I could rent someplace further away (but still close enough to work to keep my job) for less, or someplace worse further away for significantly less. "Luxury" doesn't mean I've wasted my money or I'm a bad person or I don't deserve my apartment, only that I've devoted significant amounts of my disposable income towards housing costs in order to live where I want to in addition to living where I need to.

    If we discuss "luxury" in the sense of whether someone morally ought to have something, we're really just going to be throwing our own personal tastes at housing against one another. "I like to live where its warm," someone says! "I like to live close to work!" "I like to live where I can have a large lawn, so that my children can play in it!" Obviously none of those are truly necessary for habitation, but each is also obviously a quality in a home that many would find highly desirable.

    It is a "luxury" good in the sense that it is not necessary and/or you are spending more than is necessary for it.

    More specifically, many individuals have claimed (and will continue to claim) that you "can't find housing near X without spending Y amount of money!" This is almost always better described as "you can't find housing near X that also has quality Z that I really want without spending Y amount of money!" Which is fine, but when you make an argument that Y amount of money should be considered a baseline, people will look at your quality Z to analyze if its actually necessary. If it isn't, people might say "why not live somewhere without Z? Why not live a little further away from X?"
    I'm not saying that we need tweak our tax code around every regional cost of living quirk. I am saying that for purposes of determining what tax brackets to really nail with high rates by reason of representing genuinely well-off people, we should consider such things though, and make sure that an upper-class tax rate only hits upper-class people. I think the current national dialog sort of assumes a cut-off of $250k, and I think that's reasonable, because there is nowhere in the nation where that is not well above "very comfortable".

    I'm certain you will not need to look far to find someone arguing that $250k isn't "really rich." I think this just goes back to the marginal utility of a dollar. Discussion about who is "really rich" is basically "who should we tax without feeling bad about it, because they don't really get much use of of money considering how much of it they already have."

    I do find it strange that we max out our tax brackets so low, why should someone making $400,000 a year be in the same bracket as someone making $40,000,000 a year? If we're relying on the utility of a dollar, $400,000 is enough money that the utility of a dollar is probably pretty damn low, but at $40,000,000 the utility of a dollar is probably literally undetectable.

    Two goats enter, one car leaves
  • monikermoniker Registered User regular
    I don't understand why someone would pay money for a large house. But it is a fairly popular luxury, at least where I live. McMansions, I think they are called. Bigger homes mean bigger rooms mean everything is spaced out further.

    "Dude I really gotta piss where's the john?"

    "Yeah totally its like 10 yards down the corridor past the monkey room and giant cat palace."

    I spent some nights with family that lived in large homes and I disliked having to run up and down stairs and through empty useless rooms just to get things.

    Mortgage interest tax deduction is based on the size of the mortgage (since it's based on the interest rates). The bigger the loan the more the savings. Though we've really gone past the deep end with this since most large homes are just horribly designed boxes of cubic feet rather than putting the same amount of cash into quality of construction and layout. But to a large extent that's because the way we finance and build things today if really fucking stupid. You can't buy something better even if you want to because it isn't available from a builder.

  • AtomikaAtomika not a robot. does not eat bugs!Registered User regular
    Urcbub wrote:
    I was involved in the original, and my point remains the same:

    I don't see why you should receive tax breaks (or "considerations") because you choose to live in an expensive area (or made other choices that increased your cost of living). As I see it that is the same as rewarding people for making financially irresponsible decisions, and it's essentially a reward for choosing to live outside your means (or barely within them).

    100k was the sum we discussed, I think because another poster said it was his household income and he was living paycheck to paycheck in an expensive NYC apartment. And as such, 100k wasn't the income everyone else said it was, and it wasn't fair to tax him the same as a Dallas 100k person since cost of living in Dallas is lower.

    Well, the number was $75k, but whatever.


    I think the question is, what is the purpose and aim of increasing the tax burden on people making salary $X? In NYC, I was not spending discretionary funds on luxury items more expensive than $2 wine at Trader Joe's. I didn't own a car, period, let alone a luxury car. The neighborhood and proximity to transportation/work was the biggest plus of my accommodations, given that it was a small and cramped place without central air. I had very little income that was freed up.

    In Texas, I have a decent bit of discretionary income that I quite often blow on whatever. I have a mortgage on a nice house, two modestly-priced cars, and can go do pretty much anything in the city whenever I feel like. I pay $2000/year for a membership to an outdoor club that I go to maybe once or twice, if at all. TL;DR: I have money now. Not gobs, but plenty to get by on.

    However, there's every chance that the version of me in NYC would be taxed at a much higher rate than the version of me in Texas, despite the fact the NYC-Me has far less money to put back into the economy. If the purpose of taxing higher income levels is to put more money back into the functional everyday economy and not the economy of yachts and caviar, who has more money to give up?

  • Muse Among MenMuse Among Men Suburban Bunny Princess? Its time for a new shtick Registered User regular
    Seeing those McMansions was an unwanted foray into bad design. What is this room doing here by the foyer? It exists ineffectually, like a vestigial organ. You don't use it but you payed for it.

    Huh, I don't know what I would do if I suddenly became super rich.

  • monikermoniker Registered User regular
    Not all jobs are available in all areas, and I don't think an hour+ commute is reasonable to ask of someone just to afford housing around the area they work within.

    I definitely agree with this, however there is an incredible amount of diversity within areas in terms of pricing even if you hold your commute time more or less sacred. While there are a few insane places where this is not necessarily the case (chiefly San Fran and DC) the problem is not with failing to incorporate COLA into the income tax code &c. but rather due to local laws and restrictions that make those places ungodly expensive for no reason other than being conservative NIMBY dillweeds. And also, to a lesser though by no means inconsequential extent, thanks to our incredibly underfunded transportation network that continues to defy common sense. If things are too expensive by L stations or metro stations or subway stations maybe we should make some new subway stations in order to make land adjacent to them less scarce, ey? And also promote increased density on that limited supply of land so that while the amount of earth may stay constant the amount of occupiable square footage does not.

  • Kipling217Kipling217 Registered User regular
    So if we are going to be talking about CoL, we should get one thing out of the way: 5K$/a month will get you a much better place to live in East Texas, then it will in NYC. The downside is that one of these places will be in East Texas.

    Where you live has a monetary value in itself. Pretending that living in East Texas and NYC are the same thing is wrong.

    Communicating from the last of the Babylon Stations.
  • PotatoNinjaPotatoNinja Fake Gamer Goat Registered User regular
    Housing is a good, it interacts with supply and demand like other goods. NYC has limited supply and extremely high demand, so housing there costs more.

    The demand exists for a reason, because there are legitimate benefits to living in NYC. Its more complicated than "New York rules so rent is higher!" but part of the costs are because people would rather live in NYC than Texas. Why? All sorts of reasons, maybe none you're interested in, maybe none you're willing to pay substantial amounts of money for, but the demand exists for a reason, and if we acknowledge that the cost varies because of the intersection of supply and demand, we must also acknowledge that said demand is high and there would, logically, be some reason for the high demand.

    Two goats enter, one car leaves
  • monikermoniker Registered User regular
    Urcbub wrote:
    I was involved in the original, and my point remains the same:

    I don't see why you should receive tax breaks (or "considerations") because you choose to live in an expensive area (or made other choices that increased your cost of living). As I see it that is the same as rewarding people for making financially irresponsible decisions, and it's essentially a reward for choosing to live outside your means (or barely within them).

    100k was the sum we discussed, I think because another poster said it was his household income and he was living paycheck to paycheck in an expensive NYC apartment. And as such, 100k wasn't the income everyone else said it was, and it wasn't fair to tax him the same as a Dallas 100k person since cost of living in Dallas is lower.

    Well, the number was $75k, but whatever.


    I think the question is, what is the purpose and aim of increasing the tax burden on people making salary $X? In NYC, I was not spending discretionary funds on luxury items more expensive than $2 wine at Trader Joe's. I didn't own a car, period, let alone a luxury car. The neighborhood and proximity to transportation/work was the biggest plus of my accommodations, given that it was a small and cramped place without central air. I had very little income that was freed up.

    In Texas, I have a decent bit of discretionary income that I quite often blow on whatever. I have a mortgage on a nice house, two modestly-priced cars, and can go do pretty much anything in the city whenever I feel like. I pay $2000/year for a membership to an outdoor club that I go to maybe once or twice, if at all. TL;DR: I have money now. Not gobs, but plenty to get by on.

    However, there's every chance that the version of me in NYC would be taxed at a much higher rate than the version of me in Texas, despite the fact the NYC-Me has far less money to put back into the economy. If the purpose of taxing higher income levels is to put more money back into the functional everyday economy and not the economy of yachts and caviar, who has more money to give up?

    Well the answer to that is kind of impossible to give since it's basically 'what should the government spend money on' and nobody can ever agree on the answer to that. However, ideally, the money would be going into decreasing the scarcity of moderately sized and un-cramped places with central air nearby job centers or fast transportation links with job centers.

    Right now 'nice' neighborhoods in cities like New York are super expensive because there aren't nearly enough of them. We should make more. Chiefly with tax monies collected in a progressive manner.

  • PotatoNinjaPotatoNinja Fake Gamer Goat Registered User regular
    moniker wrote:
    Not all jobs are available in all areas, and I don't think an hour+ commute is reasonable to ask of someone just to afford housing around the area they work within.

    I definitely agree with this, however there is an incredible amount of diversity within areas in terms of pricing even if you hold your commute time more or less sacred. While there are a few insane places where this is not necessarily the case (chiefly San Fran and DC) the problem is not with failing to incorporate COLA into the income tax code &c. but rather due to local laws and restrictions that make those places ungodly expensive for no reason other than being conservative NIMBY dillweeds. And also, to a lesser though by no means inconsequential extent, thanks to our incredibly underfunded transportation network that continues to defy common sense. If things are too expensive by L stations or metro stations or subway stations maybe we should make some new subway stations in order to make land adjacent to them less scarce, ey? And also promote increased density on that limited supply of land so that while the amount of earth may stay constant the amount of occupiable square footage does not.

    Essentially, local ordinances restrict supply and that means prices spike.

    Supply can't be unlimited, prices will always reflect demand until we develop quantum-teleportation-housing, but the "NIMBY" effect does make housing costs higher than they need be.

    Two goats enter, one car leaves
  • UrcbubUrcbub Registered User
    ElJeffe wrote:

    And that aside, how are we establishing the benchmark for "luxury", anyway?

    I think "luxury" means different things in an economics context and a general discussion content. "Luxury" isn't meant to imply that you should or shouldn't have something. Having a $30,000 a year apartment is a "luxury" in the sense that it isn't necessary by human standards or by our social standards. You can rent an apartment for less than $30,000 a year and you won't sacrifice any necessary elements of housing nor will you fall beneath the generally accepted standards of society. My apartment is in many ways a "luxury," I could rent someplace nearby for less or I could rent someplace further away (but still close enough to work to keep my job) for less, or someplace worse further away for significantly less. "Luxury" doesn't mean I've wasted my money or I'm a bad person or I don't deserve my apartment, only that I've devoted significant amounts of my disposable income towards housing costs in order to live where I want to in addition to living where I need to.

    If we discuss "luxury" in the sense of whether someone morally ought to have something, we're really just going to be throwing our own personal tastes at housing against one another. "I like to live where its warm," someone says! "I like to live close to work!" "I like to live where I can have a large lawn, so that my children can play in it!" Obviously none of those are truly necessary for habitation, but each is also obviously a quality in a home that many would find highly desirable.

    It is a "luxury" good in the sense that it is not necessary and/or you are spending more than is necessary for it.

    More specifically, many individuals have claimed (and will continue to claim) that you "can't find housing near X without spending Y amount of money!" This is almost always better described as "you can't find housing near X that also has quality Z that I really want without spending Y amount of money!" Which is fine, but when you make an argument that Y amount of money should be considered a baseline, people will look at your quality Z to analyze if its actually necessary. If it isn't, people might say "why not live somewhere without Z? Why not live a little further away from X?"
    I'm not saying that we need tweak our tax code around every regional cost of living quirk. I am saying that for purposes of determining what tax brackets to really nail with high rates by reason of representing genuinely well-off people, we should consider such things though, and make sure that an upper-class tax rate only hits upper-class people. I think the current national dialog sort of assumes a cut-off of $250k, and I think that's reasonable, because there is nowhere in the nation where that is not well above "very comfortable".

    I'm certain you will not need to look far to find someone arguing that $250k isn't "really rich." I think this just goes back to the marginal utility of a dollar. Discussion about who is "really rich" is basically "who should we tax without feeling bad about it, because they don't really get much use of of money considering how much of it they already have."

    I do find it strange that we max out our tax brackets so low, why should someone making $400,000 a year be in the same bracket as someone making $40,000,000 a year? If we're relying on the utility of a dollar, $400,000 is enough money that the utility of a dollar is probably pretty damn low, but at $40,000,000 the utility of a dollar is probably literally undetectable.

    This was a good explanation of things.

    I don't know the exact definitions, but I see the situation as "need - want - luxury", a specific example would be cars:

    Need: A car that drives reliably with close to average gas consumption
    Want: A new car and/or a big car
    Luxury: A BMW/Mercedes/2 seat sports car

    I don't see luxury in itself as a bad thing. Good for you that you can afford a nice big house, nice cars for your family etc, I assume you have earned it. But I have no sympathy when the same people start complaining that they can't afford everything, and that they are taxed too much, etc. And that is for the simple reason that they choose to live in luxury, and thus need to take responsibility for their own actions.

    250k is definitely enough that you don't need any kind of tax breaks due to cost of living.

  • AtomikaAtomika not a robot. does not eat bugs!Registered User regular
    Kipling217 wrote:
    So if we are going to be talking about CoL, we should get one thing out of the way: 5K$/a month will get you a much better place to live in East Texas, then it will in NYC. The downside is that one of these places will be in East Texas.

    Where you live has a monetary value in itself. Pretending that living in East Texas and NYC are the same thing is wrong.

    Dallas is not East Texas.

    My parents live in East Texas. It's unfathomably inexpensive to live in East Texas. It's also one of the worst places in the world.

  • UrcbubUrcbub Registered User
    edited July 2011
    Urcbub wrote:
    I was involved in the original, and my point remains the same:

    I don't see why you should receive tax breaks (or "considerations") because you choose to live in an expensive area (or made other choices that increased your cost of living). As I see it that is the same as rewarding people for making financially irresponsible decisions, and it's essentially a reward for choosing to live outside your means (or barely within them).

    100k was the sum we discussed, I think because another poster said it was his household income and he was living paycheck to paycheck in an expensive NYC apartment. And as such, 100k wasn't the income everyone else said it was, and it wasn't fair to tax him the same as a Dallas 100k person since cost of living in Dallas is lower.

    Well, the number was $75k, but whatever.


    I think the question is, what is the purpose and aim of increasing the tax burden on people making salary $X? In NYC, I was not spending discretionary funds on luxury items more expensive than $2 wine at Trader Joe's. I didn't own a car, period, let alone a luxury car. The neighborhood and proximity to transportation/work was the biggest plus of my accommodations, given that it was a small and cramped place without central air. I had very little income that was freed up.

    In Texas, I have a decent bit of discretionary income that I quite often blow on whatever. I have a mortgage on a nice house, two modestly-priced cars, and can go do pretty much anything in the city whenever I feel like. I pay $2000/year for a membership to an outdoor club that I go to maybe once or twice, if at all. TL;DR: I have money now. Not gobs, but plenty to get by on.

    However, there's every chance that the version of me in NYC would be taxed at a much higher rate than the version of me in Texas, despite the fact the NYC-Me has far less money to put back into the economy. If the purpose of taxing higher income levels is to put more money back into the functional everyday economy and not the economy of yachts and caviar, who has more money to give up?

    Your number was 75k. Someone said theirs were 100k.

    Edit: In NYC you choose to spend your income on rent etc. instead on things like going out and cars. Still a choice and therefore shouldn't give you any tax breaks. You should note that I don't think taxes should be so high that living like you did would be impossible, but I don't see a reason why you should get a specific tax break just because you choose to live in an expensive city.

    Urcbub on
  • monikermoniker Registered User regular
    moniker wrote:
    Not all jobs are available in all areas, and I don't think an hour+ commute is reasonable to ask of someone just to afford housing around the area they work within.

    I definitely agree with this, however there is an incredible amount of diversity within areas in terms of pricing even if you hold your commute time more or less sacred. While there are a few insane places where this is not necessarily the case (chiefly San Fran and DC) the problem is not with failing to incorporate COLA into the income tax code &c. but rather due to local laws and restrictions that make those places ungodly expensive for no reason other than being conservative NIMBY dillweeds. And also, to a lesser though by no means inconsequential extent, thanks to our incredibly underfunded transportation network that continues to defy common sense. If things are too expensive by L stations or metro stations or subway stations maybe we should make some new subway stations in order to make land adjacent to them less scarce, ey? And also promote increased density on that limited supply of land so that while the amount of earth may stay constant the amount of occupiable square footage does not.

    Essentially, local ordinances restrict supply and that means prices spike.

    Supply can't be unlimited, prices will always reflect demand until we develop quantum-teleportation-housing, but the "NIMBY" effect does make housing costs higher than they need be.

    Not unlimited, no, but most people don't want a 3 bed 2 bath apartment housed in ∞ sq. ft.

    It's unrealistic to expect 100 storey skyscrapers ringing every subway station, but there is a massive amount of underutilized land in areas that are already nice as well as a woefully inadequate amount of investment in infrastructure that would increase the stock of land that constitutes a 'good area' more or less. I mean, even just turning 2 storey walk ups into Harlem like 4 storey brownstones would effectively double a lot of areas' population density without really drastically impacting current resident's quality of life meanwhile a few hundred/thousand people just got a big boost to theirs.

  • Kipling217Kipling217 Registered User regular
    Kipling217 wrote:
    So if we are going to be talking about CoL, we should get one thing out of the way: 5K$/a month will get you a much better place to live in East Texas, then it will in NYC. The downside is that one of these places will be in East Texas.

    Where you live has a monetary value in itself. Pretending that living in East Texas and NYC are the same thing is wrong.

    Dallas is not East Texas.

    My parents live in East Texas. It's unfathomably inexpensive to live in East Texas. It's also one of the worst places in the world.

    Which was my point. There are different prices for different place, but not all place are equally good.

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  • monikermoniker Registered User regular
    As a corollary to a lot of what I'm trying to express here, this is a 'fun' visualization and guessing game with regards to population and urban density. You can have more people in nice neighborhoods without looking like a canyon of stone and steel. This would vastly improve the quality of life for those people who currently do not live in nice neighborhoods, since they now would be, and it would not impact existing residents in the way that they imagine. That's a good thing which should be promoted. Everybody should live somewhere nice. That'd be swell.


  • LawndartLawndart Registered User regular
    Urcbub wrote:
    Edit: In NYC you choose to spend your income on rent etc. instead on things like going out and cars. Still a choice and therefore shouldn't give you any tax breaks. You should note that I don't think taxes should be so high that living like you did would be impossible, but I don't see a reason why you should get a specific tax break just because you choose to live in an expensive city.

    Except that the people that choose to live in the suburbs or rural areas are heavily rewarded for doing so in the form of tax breaks.

    This has been the policy of the federal government for over 50 years, and has created massive amounts of poorly designed suburban sprawl that relies on unsustainably cheap gas in order to function.

    I'd suggest that reversing that trend and increasing planned urbanization would benefit the United States enormously and should be the basis for tax deduction based incentives.

  • devCharlesdevCharles Registered User regular
    My family moved from San Francisco to Florida, so I got to witness a pretty substantial shift in standard of living from one to the other. In San Francisco we were pretty poor. My dad was in the military and my mom was a private school teacher (which commonly pays less than public schools but it got my sister and I free tuition.) My parents never made near 250K when we lived in the Bay Area, but I can actually see a family with a few kids living in the city of San Francisco being subject to all the local, state, and federal taxes and the higher cost of living as not being, what I would consider, rich (I consider that to be the top 1% which is currently above 350K as I recall.) Cost of living in San Francisco is about 68.3% higher than Tampa. So 250K in Tampa is like 420K in San Francisco. I would consider 250K rich in Tampa basically.

    Honestly though, the differential seems like fairly small potatoes because raising taxes on people making over 250K isn't really for the people at 250K or 300 or probably anything below 500K. It's for the people whose opportunity cost is basically pointing them towards the direction of hiding their money as being more worthwhile than paying their tax revenue. The IRS estimated the tax gap at like 450 billion dollars from like 2 trillion dollars of unreported income. I'd say that if you want the equitable tax code, the bigger concern would be getting that revenue first. If you want to equalize it down from there depending on where you live, that seems reasonable.

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  • LilnoobsLilnoobs Alpha Queue Registered User regular
    After seeing the commutes some of my family take (so they can continue to live in their McMansions in the middle of nowhere) I have decided I would never live so far away from work, even if it meant living someplace more expensive that was smaller and not as nice.
    Not all jobs are available in all areas, and I don't think an hour+ commute is reasonable to ask of someone just to afford housing around the area they work within.

    I think that is what bothered me most about some of the arguments offered.

    While true not all jobs are available in all areas, forgive me for not believe that someone who makes double or more of the average family income in the United States doesn't have viable alternatives to their living situation. Until I'm proven wrong, I'm going to think the dude making $75K+ a year has a few choices.

  • ElJeffeElJeffe Moderator, ClubPA mod
    Urcbub wrote:
    I don't know the exact definitions, but I see the situation as "need - want - luxury", a specific example would be cars:

    Need: A car that drives reliably with close to average gas consumption
    Want: A new car and/or a big car
    Luxury: A BMW/Mercedes/2 seat sports car

    There's no distinction between "want" and "luxury", though. Neither "new" nor "big" have anything to do with the functionality of the car. They have to do with completely frivolous desires. A new car is a luxury just like a BMW is. The latter is just more of a luxury.

    So at the end of the day, getting anything bigger than a tiny studio apartment for your family of four, and any neighborhood that isn't technically unsafe, represents a luxury. You are perfectly capable of surviving in that studio apartment, and getting anything more is a luxury by the definition you're using.

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  • ElJeffeElJeffe Moderator, ClubPA mod
    Lilnoobs wrote:
    After seeing the commutes some of my family take (so they can continue to live in their McMansions in the middle of nowhere) I have decided I would never live so far away from work, even if it meant living someplace more expensive that was smaller and not as nice.
    Not all jobs are available in all areas, and I don't think an hour+ commute is reasonable to ask of someone just to afford housing around the area they work within.

    I think that is what bothered me most about some of the arguments offered.

    While true not all jobs are available in all areas, forgive me for not believe that someone who makes double or more of the average family income in the United States doesn't have viable alternatives to their living situation. Until I'm proven wrong, I'm going to think the dude making $75K+ a year has a few choices.

    Of course he does. Nobody says he doesn't. Even really poor people have choices. It's just that those choices are often more difficult than "am I willing to give up my new Mercedes." It often involves things like "do I want to have time to spend with my family" or "do I want to give up my friends."

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  • AtomikaAtomika not a robot. does not eat bugs!Registered User regular
    Honestly, the reasons I had to pay what I did for that apartment were fairly insignificant in almost any other context: proximity to work, school, and transportation, and safety of neighborhood.

    The place wasn't that nice.

  • SanderJKSanderJK Crocodylus Pontifex Sinterklasicus Madrid, 3000 ADRegistered User regular
    Proximity to work is an extreme luxury. Probably the biggest luxury I can imagine. Because it gives you say 5 hours of free time/day instead of 3. Too me, that's probably the largest luxury I can imagine. (It's still a luxury, if you have bills to pay it doesn't matter).

    Now obviously the situation in the USA is pretty complex, with staggering differences between states in average wages, costs of housing and state taxes, which severely complicates active tax policy by the federal government (Because any chance in taxes is just about guaranteed to mess up a small subsection due to the differing conditions, and another group is probably going to get unintended relative benefits). But the tax increases in general that seem to be floating around are marginal tax increases on upper group. Even at the lowest number discussed (75k), repealing the equivalent of the Bush tax cuts (which were a 2% on all margins iirc?) Would be 25k x 2% = $500 for someone earning $100k. That's peanuts.

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  • UrcbubUrcbub Registered User
    Lawndart wrote:
    Urcbub wrote:
    Edit: In NYC you choose to spend your income on rent etc. instead on things like going out and cars. Still a choice and therefore shouldn't give you any tax breaks. You should note that I don't think taxes should be so high that living like you did would be impossible, but I don't see a reason why you should get a specific tax break just because you choose to live in an expensive city.

    Except that the people that choose to live in the suburbs or rural areas are heavily rewarded for doing so in the form of tax breaks.

    This has been the policy of the federal government for over 50 years, and has created massive amounts of poorly designed suburban sprawl that relies on unsustainably cheap gas in order to function.

    I'd suggest that reversing that trend and increasing planned urbanization would benefit the United States enormously and should be the basis for tax deduction based incentives.

    I don't think suburbanites should get tax breaks either just because they choose to live in a suburb

  • UrcbubUrcbub Registered User
    ElJeffe wrote:
    Urcbub wrote:
    I don't know the exact definitions, but I see the situation as "need - want - luxury", a specific example would be cars:

    Need: A car that drives reliably with close to average gas consumption
    Want: A new car and/or a big car
    Luxury: A BMW/Mercedes/2 seat sports car

    There's no distinction between "want" and "luxury", though. Neither "new" nor "big" have anything to do with the functionality of the car. They have to do with completely frivolous desires. A new car is a luxury just like a BMW is. The latter is just more of a luxury.

    So at the end of the day, getting anything bigger than a tiny studio apartment for your family of four, and any neighborhood that isn't technically unsafe, represents a luxury. You are perfectly capable of surviving in that studio apartment, and getting anything more is a luxury by the definition you're using.

    I think I very clearly stated that this is how I see things without knowing official definitions. But I think there is a difference between wants and luxuries. Now, of course all luxuries are wants.

  • RedTideRedTide Registered User regular
    ElJeffe wrote:
    Lilnoobs wrote:
    After seeing the commutes some of my family take (so they can continue to live in their McMansions in the middle of nowhere) I have decided I would never live so far away from work, even if it meant living someplace more expensive that was smaller and not as nice.
    Not all jobs are available in all areas, and I don't think an hour+ commute is reasonable to ask of someone just to afford housing around the area they work within.

    I think that is what bothered me most about some of the arguments offered.

    While true not all jobs are available in all areas, forgive me for not believe that someone who makes double or more of the average family income in the United States doesn't have viable alternatives to their living situation. Until I'm proven wrong, I'm going to think the dude making $75K+ a year has a few choices.

    Of course he does. Nobody says he doesn't. Even really poor people have choices. It's just that those choices are often more difficult than "am I willing to give up my new Mercedes." It often involves things like "do I want to have time to spend with my family" or "do I want to give up my friends."

    A family living on 100-150k in New Jersey is pretty far off from living the high life. And by far off, I mean barely able to afford living in a moderately safe area within decent proximity to the job(s) that would provide such an income. Being a homeowner in said area may be out of the question even.

    This state being incredibly backwards on tax collection (and being the most shorted on federal taxes doesn't really help things). Property taxes in the cities are so high that it almost guarantees a decline of most neighborhoods into section 8 hell holes. Someone I work with owns a 2 family rental property in Elizabeth. He collects 1k a month from each unit in rent (24k a year) and pays about 10k a year in property taxes (a number which has increased each year since he's bought the house). Every year he fails to cover his mortgage based on rents alone and that also leaves him paying for any repairs and maintenance out of pocket.

    Tangent here:
    Before anyone jumps on me for griping about a two family investment property (the same numbers apply for people living in these things as primary homes) I'll post a photo of a typical one either tomorrow or saturday to show what kinda place I'm talking about. These things aren't anything like the duplex I grew up in, that's for sure.

    But what makes these type arrangements such a blight is that they basically encourage two types of behavior by landlords:
    1) Magically turn the 2 family home into a 3 or 4 family by illegally making extra apartments (hello basement) or
    2) Buy it and then never invest a single unnecessary cent into it in the hopes that you'll somehow stay closer to being in the black
    End result: Cities with even greater decay

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  • TastyfishTastyfish Registered User regular
    I don't understand why someone would pay money for a large house. But it is a fairly popular luxury, at least where I live. McMansions, I think they are called. Bigger homes mean bigger rooms mean everything is spaced out further.

    "Dude I really gotta piss where's the john?"

    "Yeah totally its like 10 yards down the corridor past the monkey room and giant cat palace."

    I spent some nights with family that lived in large homes and I disliked having to run up and down stairs and through empty useless rooms just to get things.

    Depends how good the designer is, a proper big house which has been well designed is pretty incredible - and this is from someone who probably lives in half the square footage you do (the US Shameless is surreal in how big the house is).
    Check out the SE++ design thread, or ask any designer (or architect) on the importance of space. Basically a properly designed mansion is all about not sacrificing anything for ultility or comfort. Nothing is in the way of something else and the movement of 2+ people within a space feels natural and uninhibited. McMansions, from my understanding, are where you just scale up a normal house or add "fancy bits" in which case I can understand why you wouldn't want them. There's an optimum size of house, which assumes that if you're getting a really big mansion that you want people to stay that adds a whole punch of other requirements, but there is a reason why large houses are nice.

  • monikermoniker Registered User regular
    RedTide wrote:
    ElJeffe wrote:
    Lilnoobs wrote:
    After seeing the commutes some of my family take (so they can continue to live in their McMansions in the middle of nowhere) I have decided I would never live so far away from work, even if it meant living someplace more expensive that was smaller and not as nice.
    Not all jobs are available in all areas, and I don't think an hour+ commute is reasonable to ask of someone just to afford housing around the area they work within.

    I think that is what bothered me most about some of the arguments offered.

    While true not all jobs are available in all areas, forgive me for not believe that someone who makes double or more of the average family income in the United States doesn't have viable alternatives to their living situation. Until I'm proven wrong, I'm going to think the dude making $75K+ a year has a few choices.

    Of course he does. Nobody says he doesn't. Even really poor people have choices. It's just that those choices are often more difficult than "am I willing to give up my new Mercedes." It often involves things like "do I want to have time to spend with my family" or "do I want to give up my friends."

    A family living on 100-150k in New Jersey is pretty far off from living the high life. And by far off, I mean barely able to afford living in a moderately safe area within decent proximity to the job(s) that would provide such an income. Being a homeowner in said area may be out of the question even.

    This state being incredibly backwards on tax collection (and being the most shorted on federal taxes doesn't really help things). Property taxes in the cities are so high that it almost guarantees a decline of most neighborhoods into section 8 hell holes. Someone I work with owns a 2 family rental property in Elizabeth. He collects 1k a month from each unit in rent (24k a year) and pays about 10k a year in property taxes (a number which has increased each year since he's bought the house). Every year he fails to cover his mortgage based on rents alone and that also leaves him paying for any repairs and maintenance out of pocket.

    Tangent here:
    Before anyone jumps on me for griping about a two family investment property (the same numbers apply for people living in these things as primary homes) I'll post a photo of a typical one either tomorrow or saturday to show what kinda place I'm talking about. These things aren't anything like the duplex I grew up in, that's for sure.

    But what makes these type arrangements such a blight is that they basically encourage two types of behavior by landlords:
    1) Magically turn the 2 family home into a 3 or 4 family by illegally making extra apartments (hello basement) or
    2) Buy it and then never invest a single unnecessary cent into it in the hopes that you'll somehow stay closer to being in the black
    End result: Cities with even greater decay

    Well, if the structural asset isn't providing the same return as the property asset maybe he should replace the structure with something that will. A 6 unit building, say. Or, since he'd have to amortize it over a longer period of time go for something closer to 12 that way you can build in a bit of a future proof buffer. Now there are 10 new families able to live in his property's presumably nice neighborhood and he's still able to rake in tha moolah.

  • KiplingKipling Registered User regular
    SanderJK wrote:
    Proximity to work is an extreme luxury. Probably the biggest luxury I can imagine. Because it gives you say 5 hours of free time/day instead of 3. Too me, that's probably the largest luxury I can imagine. (It's still a luxury, if you have bills to pay it doesn't matter).

    No, it's an opportunity cost. If you value your time over some sum of money, then you choose to live close to work. COLA arguments always make it sound like you get nothing for the extra money. You get benefits - you are just paying for it. Rich urban schools have much easier times fundraising, generally better public services, nightlife, culture, etc.

    I've always thought the best way to structure tax rates would have been based on an average median income (about 40k). Make "x" times the median, you get taxed more. So if both the husband and wife work, you would need to make 3x the median income before you hit 250k. A single person, you make 6x the median income of the United States before you get to 250k. And if the rich want to pay less, raise the median income.

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  • SanderJKSanderJK Crocodylus Pontifex Sinterklasicus Madrid, 3000 ADRegistered User regular
    The thread this discussion came out of showed that there are only 6 counties in the entire USA where the median family income is above $100k, and none of those are far above it. So all who earns above that, are at least in the upper half of his extended area, no matter where they live. And they are far above the country median.

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  • AtomikaAtomika not a robot. does not eat bugs!Registered User regular
    SanderJK wrote:
    The thread this discussion came out of showed that there are only 6 counties in the entire USA where the median family income is above $100k, and none of those are far above it. So all who earns above that, are at least in the upper half of his extended area, no matter where they live. And they are far above the country median.

    That statistic says nothing about how taxation policy should be implemented. The poverty line for a family of four is half the income of the median national average. I wouldn't argue 4(Poverty)=$Wealth.


    The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.

  • devCharlesdevCharles Registered User regular
    Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.

    Better luxury taxes might be more efficient at getting that money from people who are already heavy on tax avoidance, but it would probably be a bitch to implement what you define "luxury" as.

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  • ElJeffeElJeffe Moderator, ClubPA mod
    Kipling wrote:
    COLA arguments always make it sound like you get nothing for the extra money. You get benefits - you are just paying for it. Rich urban schools have much easier times fundraising, generally better public services, nightlife, culture, etc.

    Well, the problem is that you aren't always getting anything for your money. San Jose, for example, is extremely expensive compared to the rest of the US. And yet a lot of it is a giant ghetto with high crime and it's ugly as fuck. And public transit isn't so great that far south. Nightlife? Culture? Those aren't really absolute benefits - you could just as easily argue that a rural area has "culture" - it's just a different one.

    Now, if you live in an expensive area, you also generally get paid more. So to a point, everything works out in the end. But the problem is that tax rates don't scale. So someone living in San Jose is likely living the same quality of lifestyle as someone living in the middle of Arkansas. The only real difference is that San Jose guy pays in a higher tax bracket.

    Honestly, I don't think it's a huge issue. I don't think the tax issue is so big that it's really pounding people who live in expensive urban areas. I just think that the "luxury" of living in a high-cost slum in the middle of some metropolis is often overrated.

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