From the Washington Post:
Americans think owning a home is better for them than it is
Some people never learn: Polls show that Americans still view their homes as the best and safest place to invest their hard-earned cash.
Gallup asked Americans this month to choose the best “long-term investment.” Real estate was the most common pick, ahead of mutual funds, bonds and other options. Similarly, Fannie Mae’s National Housing Survey asked Americans to assess whether various kinds of assets amounted to a “safe investment with a lot of potential.” As has been the case since before the financial crisis, “buying a home” beat out all the alternatives.
The fact that Americans still financially fetishize homeownership baffles me. Never mind that so many people lost their shirts (among other possessions) in the recent housing bust. Over an even longer horizon, owning a home has not proved to be a terribly lucrative investment either. Don’t take my word for it; ask Robert Shiller, winner of the 2013 Nobel Prize in economics who previously became a household name for identifying the housing bubble.
“People forget that housing deteriorates over time. It goes out of style. There are new innovations that people want, different layouts of rooms,” he told me. “And technological progress keeps bringing the cost of construction down.” Meaning your worn, old-fashioned home is competing with new, relatively inexpensive ones.
Over the past century, housing prices have grown at a compound annual rate of just 0.3 percent once one adjusts for inflation, according to my calculations using Shiller’s historical housing data. Over the same period, the Standard & Poor’s 500-stock index has had comparable annual returns of about 6.5 percent.
Yet Americans still think it’s financially savvy to dump all their savings into a single, large, highly illiquid asset.
Perhaps Americans just want to invest in something tangible. Real estate is, after all, real: bricks, mortar, wood, tile. Other kinds of assets seem more abstract, almost imaginary, by comparison. You just have to trust your financial adviser, bank or never-ending, entire-rainforest-killing Vanguard mailings that your other investments actually exist.
Shiller suspects that selective memory may also play a role.
“People remember home prices from long ago better than they remember other prices,” he says. “Ask anybody, ‘What did you pay for your home?,’ and they’ll remember even if it was 50 years ago. It will be some ridiculous number like $30,000. They then compare it to today’s prices, and it makes a big impression, and they forget there has been so much inflation since then.”
Signs of this soft patch in housing were already visible over a month ago when lumber futures experienced a significant decline (see chart). Home prices have risen quickly over the past couple of years, and that combined with higher mortgage rates creates a bit of a sticker shock for many potential buyers. Furthermore builders continue to complain about construction costs and tight credit. The biggest issue however remains household formation. As of the end of last year for example, the number of American households was not growing at all (see chart). This is likely due to record low marriage rates as well as a slew of other factors. Whatever the reason, household formation needs to stabilize before we see stronger results in the US housing market.
where’s the chart?
Essex says:
April 24, 2014 at 6:33 am
decline (see chart). Home
at all (see chart). This
This statement again don’t take on account how much you will spend on rent. On my example yesterday. Numbers adjusted for eddie
A middle class family buying a $360,000 home putting down 20% with 15 year $288,000 mortgage at 3.5%.
Monthly is $2058.86 a month. $1300 goes to principal. Real cost is $758.00
Property tax is $10,000 a year that is $833 a month. Cost of owning against renting is $1592 a month against renting is $2400 according to zillow.
Deduction on tax and mortgage interest is $19,096. If at 25% bracket ,you are getting back $4774 a year.
Now your real cost of owning is only $1,194 against $2400 renting. No more mortgage after 15 years.
To satisfy Eddie:
Add $1200 equal to $100/month for insurance. Assume $100,000 for major repairs depreciate to 30 years is $278 a month
Now your real cost of owning is only $1,572 against $2400 plus increase in renting. No more mortgage after 15 years.
Increase in Property tax will be offset by increasing money going into principal and paying less interest which get computed on cost against renting.
2.If I am paying $1572 against renting at $2400 that means I am saving $828 a month. That is a 52% return on my $1572. Is in it?
“Over the past century, housing prices have grown at a compound annual rate of just 0.3 percent once one adjusts for inflation, according to my calculations using Shiller’s historical housing data. Over the same period, the Standard & Poor’s 500-stock index has had comparable annual returns of about 6.5 percent.”
Housing market dead for next 50-100 years.
Let the gnashing of teeth begin.
What happens to a Frankenstein of a dead market that you dig up, lipstick and electroshock…only to have everyone discover that it’s still dead?
All bets are off now.
Stu: Trinity bull case, but already priced in……also true for U.S.
BUSINESS
Canada Toughens Rules for Carrying Crude Oil by Rail
Ottawa Orders Most Vulnerable Tank Cars Phased Out Immediately
By NIRMALA MENON in Ottawa and BOB TITA in Chicago CONNECT
Canada introduced toughened measures for shipping dangerous goods by rail, ordering railcar owners to phase out the most vulnerable tank cars immediately.
Ottawa’s actions, taken after last summer’s deadly explosion of a train carrying crude oil in Quebec, are likely to increase pressure on U.S. regulators to follow suit. The rail industry depends on common equipment standards to allow for the efficient flow of goods between railroads and across the Canada-U.S. border.
The move to phase out certain tank cars would raise questions about railway capacity if railcar fleets can’t be upgraded fast enough to meet booming demand for crude oil, commodities and other goods.
The Canadian Transport Ministry on Wednesday said railcar owners have 30 days to remove the least crash-resistant tank cars that lack bottom reinforcement. About 5,000 such cars, a general-purpose model known as the DOT-111, are in use in North America. Car owners will have three years to replace or retrofit another 65,000 less vulnerable DOT-11s used to ship crude oil and ethanol.
Most tank cars are owned by leasing companies, shippers and railcar manufacturers. Railroads typically own engines and track but not the tank cars.
The U.S. Transportation Department said Canada’s move was consistent with work under way in the U.S.
Regulators in Canada and the U.S. in January urged tougher standards after the derailment in Lac-Mégantic, Quebec, of a train carrying crude oil killed 47 people.
Oil shipments by rail have surged in recent years amid booming production in North America. Many communities have expressed concern about the growing numbers of trains carrying crude oil, especially since the Quebec derailment and other accidents.
North American railroads have been pushing to phase out substandard tank cars. BNSF Railway Co. is buying up to 5,000 new tank cars to transport crude oil. Canadian National Railway Co. CNR.T -0.30% said last month that it would phase out older tank cars used to transport fuel for its own locomotives and would provide incentives to customers to replace their older tank cars.
Rising demand for tank cars for carrying crude oil has strained car production. There is a backlog of 50,500 tank cars, about 18 months’ worth of output in North America.
Analysts said Canada’s schedule for replacing or retrofitting tank cars will further pressure car makers and repair shops.
“Is there enough excess capacity to replace all these cars? It will be very difficult,” said Eric Starks, president of logistics consulting firm FTR Associates. “But once push comes to shove, it’s amazing how adaptive the industry can be.”
The Railway Supply Institute, whose members build more than 95% and own or lease over 70% of North American tank cars, said it would review Canada’s regulations and work closely with the railroad industry and the government to improve safety.
Car manufacturers in recent years have built about 50,000 tank cars with sturdier designs and features than the DOT-111s.
Canadian National and Canadian Pacific Railway Ltd. CP.T -1.23% said they were reviewing Canada’s plan.
The Canadian Association of Petroleum Producers said the immediate impact of the rules would be limited because the cars facing immediate decommissioning accounted for only a small portion of the tank cars being used in Canada to transport crude.
Under the new rules, trains carrying dangerous goods, including crude, won’t be permitted to run at more than 50 miles an hour. Canada also will require that emergency-response plans be drawn up for trains that have even a single tank car loaded with flammable liquids such as crude oil.
—Betsy Morris, Chester Dawson and Russell Gold contributed to this article.
Dead due to the voracious appetites of the locusts. After they frack away all of the gas, poison all of the land, pollute the water, they still want top dollar for their foot jam smelling old worn out house so they can rest their corn crusted feet down south.
Don’t forget they have left you a massive debt bill to pay as a gift. The bill they refused to pay each month. You should pay it and like it. As in the classic Judge Judy, ” I’m Me!”
The problem with all of these opinion/analysis about homeownership is they generally assume alternative housing options come at zero cost. Or, if they do consider the cost of renting, they go down the path of comparing dissimilar properties. Generally folks would rent lower quality properties than they would consider buying, so if you look at the median 3/2 rental vs the median 3/2 sale, the sale will be of significantly higher quality. Adjusting for apples, the calculus becomes much different when looking at equivalents from a quality standpoint versus a numbers standpoint. On the pro-housing side, most everything spit out comes from the NAR, specifically intended to convince you to buy, whether it is in your favor or not.
In the mid 90s, the calculus was clearly in favor of buying, in the mid 2000s, the calculus was clearly in favor of renting (or selling, depending on your position).
None of this will matter when we’re roaming the country in armed packs.
@EpicureanDeal: Prior quote from @mattyglesias’s interview of Piketty, here: http://t.co/Gl7F1dVUnf
@NYTimeskrugman: Piketty at CUNY http://t.co/BCYhTSwLFI
“Now what I would propose is to transform it into a progressive tax on net wealth. That means that I would reduce the property tax for all those who have low net worth, and increase it on those who have billions. The way it would work is,that if you own a house worth $500,000, but you have a mortgage of $490,000, then your net wealth is $10,000 so in my system you would owe no tax. Under the current system, you pay as much property tax as someone who inherited his $500,000 home or who paid off his debt a long time ago.”
Piketty:
“Pretty much everywhere, including in the US, what you see is that the top of the wealth distribution is rising two, three times as fast as the average wealth, and as the size of the economy, which is certainly evidence fo r bigger than g [i.e., a rate of return on existing wealth that’s higher than the overall growth rate of the economy], at least for a large wealth portfolio.
This means that we are, right now, in a stage of rising concentration of wealth. It will stop somewhere, but this “somewhere” can be anywhere. That’s a problem, because I don’t think we can just wait for, again, for an incredible coincidence to happen.
I’m not saying the future will necessarily be the worst possibility. There are different forces at play, but I think the fact that there is so much uncertainty about how far it can get is, in itself, a problem. I think we want to find institutions and rules so that we can keep control of these problems.”
10 – This is idiotic – how do people like this actually get press?
[12] grim,
“This is idiotic – how do people like this actually get press?”
This is brilliant. It has little chance of passing, zero chance of collecting more revenue than it destroys, but it generates lots of business for the tax planning community.
I would LOVE to see the sort of tax that Krugman/anon advocate. It is one of the easiest taxes to avoid. I would especially love it at the state level or if it only taxed certain forms of wealth or ownership. That makes avoidance even easier though the distortion effects would be awful. And if it was a comprehensive tax designed to uncover every rock and tax everything beneath it, don’t be standing near any exits and cover your ears. The giant sucking sound would be deafening.
Krugman tax is a joke and his lack of not even thinking about its consequences speaks to his lack of thought. It’s no wonder Anon is eating it up.
Anyone want to open a mortgage brokerage with me?
Lib can we be an underhanded boiler room like countrywide if not I’m not interested
[10] anon,
For a Nobel laureate, Krugs is a lousy historian. Manipulation of property for valuation purposes is older than the system he wants to change and it is actually evident in how it distorted architecture.
In the Netherlands, you see old rowhomes in the cities that are very narrow and tall. The reason is that back when they were built, owners were taxed on frontage. So you kept very narrow frontage and built up and back.
In colonial times, property taxes were based on the number of rooms in a house. Go into old colonial houses and you will see there are no closets. They also had wide passageways between walls. This was because closets were considered rooms and things like extra wide passages or demi-walls between “rooms” meant that two distinct spaces could be classified as one room. By keeping the room count down, you kept your taxes down.
Or you could go to this tax planning event starting today:
http://www.caribbeanbusinesspr.com/news/pr-investment-summit-this-week-95242.html
[14] libturd,
Make sure you get enough unrelated “partners” to avoid ownership under the attribution rules. Then under a Krugman regime, each partner takes out a mortgage from the company, which is now an unrelated entity for attribution purposes, and lowers their net wealth. Of course, they now have net assets in the mortgage co. but if that doesn’t count toward the property tax, it is avoided. And the “interest” one pays to the mortgage co. is tax deductible.
It also serves as a useful vehicle for employing Ellery and Graydon, who can draw nominal salaries that are taxed at a lower rate. So it is a form of income-shifting as well.
[17] redux,
Yes, I know, it will be attacked as a sham transaction but not if it actually does third party mortgage business.
@NYMag: How do you pronounce economist Thomas Piketty’s name, anyway? “Tome-AH PEEK-et-ee” http://t.co/SJW4v4FRIO
grim says:
April 24, 2014 at 8:55 am
10 – This is idiotic – how do people like this actually get press?
By the way. Gator Jr. got a taste of commuting on NJ Transit today. Gator took him to work with her and they diverted all trains to Hoboken. It’s a good thing we all woke up 30 minutes earlier than usual just for Gator and son to arrive 5 minutes late to the orientation which started around the time Gator would normally get into work on her normal train which leaves 30 minutes later.
NJ Transit blows!!!
Fare history…
May 2010 – 25 percent
June 2007 – 9.6 percent
July 2005 – 11.5 percent
April 2002 – 10 percent
July 1990 – 9 percent
May 1989 – 12.5 percent
May 1988 – 9 percent
July 1986 – 10.6 percent
Sept. 1983 – 9 percent
July 1982 – 17.5 percent
July 1981 – 22 percent
July 1980 – 11 percent
Typo of the Day
You would think that if it is your own law, and you work with it all the time, and the actual text is right in front of you, that you would be able to come up with the correct acronym. From the Federal Register:
“This notice is provided in accordance with IRC section 6039G of the Health Insurance Portability and Accountability Act (HIPPA)”
HIPPA?
This is brilliant. It has little chance of passing, zero chance of collecting more revenue than it destroys, but it generates lots of business for the tax planning community.
I would spawn an entirely new form of mortgage for wealthy individuals – Flexible equity – 100% IO – as your home value rises, they send you a check to ensure 0 equity at any given time.
Why maintain any equity in the home if it is so easily taxed? One that equity is liberated there are many ways to redeploy it elsewhere, in places that offer significantly more tax flexibility.
16 CND
Most of the costs for workers in PR are already being paid by S. Security.
They claim disability, get free medical bennies, then work under the table. Saves employers lots of money. That alone makes it business friendly
Nine of the 10 top U.S. zip codes for workers collecting Social Security disability benefits are in Puerto Rico, according to government data.
http://online.wsj.com/news/articles/SB10001424053111903532804576564543481258206
Wow…that fare increase history is mind boggling. from 2002 to 2010, fares increased 75%. This is incredulous for an industry that should gain huge economies of scale as it grows.
[19] anon (le trouduc)
Thanks for the PSA. We already knew that you know how to pronounce it correctly.
Wish I could go long train fares.
@greenhousenyt: Economist Piketty says if West can use million troops to oust Saddam from Kuwait, it can end tax havens for ultrarich http://t.co/o8RW6T4zPV
@Chris_Colford: “Thomas Piketty Is Absolutely Right” — Robert Solow, Nobel Prize-winning economist at MIT, in New Republic @tnr http://t.co/TONkOBbhnQ
@meltonannie1: The 700-page “Capital in the 21st Century” by French economist Thomas Piketty is Amazon’s current no. 1 bestseller http://t.co/65dOsn783y
@meltonannie1: The 700-page “Capital in the 21st Century” by French economist Thomas Piketty is Amazon’s current no. 1 bestseller http://t.co/65dOsn783y
@Chris_Colford: “Thomas Piketty Is Absolutely Right” — Robert Solow, Nobel Prize-winning economist at MIT, in New Republic @tnr http://t.co/TONkOBbhnQ
[22] grim,
In actuality, such a tax would not stop at just real estate. Otherwise, it would be painfully easy to defeat it by simply taking out a mortgage and paying 1-2% after deductions to avoid a much higher tax.
The mortgaged money would have to go somewhere. If you put it into the house, then you have to increase the mortgage to keep equity down so it’s circular. If you put it into other investments, those are going to be taxed as well.
It becomes a game of whack-a-mole until the tax is so comprehensive that you simply follow your money overseas, stroll into an embassy one day, complete a CLN application and hand over your passport.
The other major issue with taxing net worth is … what the hell is a retiree on a fixed income supposed to do?
The whole concept of investing in your retirement is to generate sufficient assets to throw off enough income to live on until you die.
Now you are going to tax the very mechanism that makes retirement possible?
Let just say, for example, right now I have approximately $500k saved towards retirement, I am 37.
Are you saying I should be taxed on my net worth? How the hell am I supposed to save for retirement? Once the effective tax rate exceeds my potential reinvestment return, this is a losing proposition. Why the hell would I bother saving for retirement?
Let’s say I am risk averse and only throw off 2% return a year on that $500k. What do you propose to tax my “net worth” at? 5%? So I pay the government $25,000, and my investment return is only $10,000. At the end of the year I now only have $485k saved.
Yet Americans still think it’s financially savvy to dump all their savings into a single, large, highly illiquid asset.
They never had savings to begin with. They were victims of a money laundering scheme. They signed on a dotted line to ensure that proceeds can be passed from one entity to another, leaving them with a dump truck full of sh1t debt.
A sea of underwater bag holders ensures that this will be a decades long slog. I remember in 2009 when it was said that not only were we not even in the early innings, but the pitchers were just beginning to warm up. Nothing has changed since 2009. Not a thing. We’re still in the same spot 5 years later despite zero interest rates and unprecedented money printing.
I’m not even talking about investments. The majority of the muppets have no idea what an index fund is or how to automatically reinvest earned dividends. This stuff is not rocket science yet the investment strategy of the pudgy populace is to make a dollar, spend a dollar.
And you expect guys like us, who understand the ruse to drop 600 large for a f.ucking dump?
Nom even worse it is HIPAA very topical I actually have 45 CFR 160 open in front of me right now
they are profound idiots at the federal register a somone who comments on 21 CFR all the time it is a miracle they make it to work daily as their crap is usually rife with errors once it is passed on from the alphabet agencies
and presumably you do know what they are? how is that knowledge working out for you? because it seems you still are not able to afford your dream house
” The majority of the muppets have no idea what an index fund is or how to automatically reinvest earned dividends. This stuff is not rocket science yet the investment strategy of the pudgy populace is to make a dollar, spend a dollar.”
[33] anon (le cul)
“how is that knowledge working out for you?”
Funny, I was about to ask you and your fellow travelers the same thing.
@pegobry: Tocqueville saw steep death taxes as vital to the democratic character of America.
Grim [12];
10 – This is idiotic – how do people like this actually get press?
Simple; people like anon eat it up with a spoon.
@Lib 20 – Orientation started 5 minutes after our normal train is supposed to get to Penn. We never make it in on time and today that train ran even more delayed. We would have been 45 minutes late if we didn’t take the earlier train.
Can’t wait to show Lil Gator the hot pink watches and gold mini purse that came in his event “goody bag”. He’s gonna love them. I heard there’s an egg timer in the sealed box too.
[32] pain,
FR only publishes. They get their submissions from the agencies.
My favorite FR fcukup story had to do with a notice that the Fed sent in for publication on a transaction I was handling. The transaction required notice in the FR; this was to come from the Fed.
The Fed sent the notice over on a disk (yep, even in 2002) and the GPO nuked it during the 9-11/anthrax hysteria. By the time it was discovered, nearly two months had passed. I got a very apologetic call from the Fed about it, but when I asked if the waiting period was tolled (bad result for us), they said yes and there wasn’t anything they could do about it.
Our client, a foreign bank, was furious. This meant that the required waiting period would expire after the closing date, so the closing would be held up. Highly unacceptable. I felt like crap over this but then literally had an epiphany and came up with a temporary bank restructuring solution that would avoid the waiting period. The partner and client were incredulous but eventually agreed it would work. The problem was the Fed–the partner and I agreed that the partner (a former Fed attorney) had to pitch it to them because they wouldn’t give me, an associate, the time of day. The Fed was resistant but blessed it, probably because their fcukup caused the issue in the first place.
The lone protester on the deal went nuts, threatening all kinds of legal action. The partner had me draft a letter outlining the new transaction. The protester dropped his opposition, the transaction closed normally, and the client was exceedingly grateful.
Later, a Fed attorney I knew mentioned the deal and told me how everyone thought the PARTNER’S idea was “brilliant.” So he got all the credit with the regulators. All I got out of it was lunch at Oceana and the thanks of a small group of Japanese.
had never said to have investment prowess. but I wouldn’t be as unstable as chifi if I knew about indexes and stuff
Comrade Nom Deplume, Guardian of the Realm says:
April 24, 2014 at 10:25 am
[33] anon (le cul)
“how is that knowledge working out for you?”
Funny, I was about to ask you and your fellow travelers the same thing.
(9) None of this will matter when we’re roaming the country in armed packs.
Clot, please stop shuffling your deck. We need new predictions.
[35] anon,
This is true and it is a near universal sentiment among philosophers and tax theorists.
However, it is also avoidable and at odds with the understood tenets of American exceptionalism and a meritocratic culture.
A wealth tax (which would presumably replace it) would make avoidance much harder, but in Toqueville’s or Bentham’s time, wealth wasn’t mobile. Today, it is. So you also need capital controls. That is the 800 lb canary in the coal mine. Our two most recent capital controls are FATCA and the HEART Act. FATCA doesn’t restrict capital flow, it only requires universal reporting. HEART Act is a MTM tax scheme. Neither are true “capital controls” in the sense that they actually inhibit or prevent cross-border transfers.
Ironically, Toqueville and Bentham would have permitted the wealthy to distribute their estates intervivos and avoid tax because it was serving the distributive function and putting capital back to work. Perversely, our tax code encourages intervivos accumulation by either removing tax preferences for broader distribution (caps on charitable deductions) or heavily taxing noncharitable gifts (gift taxes).
@EpicureanDeal: I’ve worked with a few business owners who would avoid earning a dollar of revenue in order to avoid paying 60¢ in tax. Me, I’d take the 40¢
[39] anon,
Didn’t this come from your side of the aisle?
http://www.treasurydirect.gov/readysavegrow/start_saving/retirementaccountfactsheetenglish.pdf
@libtard: I’ve worked with a ton of government agencies that spend 49¢ to mail me a check for a quarter.
[40] anon
Epicurean doesn’t understand the Law of Diminishing Returns.
I will wait for Piketty to write a book on the rising inequality of the world’s population’s ability to hit baseballs, dunk basketballs, write computer programs, and distinguish economic thought from envy-fed flimflam written by demagogues.
@EpicureanDeal: “No thanks, I’d rather stay non-wealthy than pursue my chance to pay 2% of my millions to the government.” – Nobody sane, anywhere
Taco Bell is launching a new upscale taco chain.
The restaurant, called U.S. Taco Co. and Urban Taproom, will feature a menu of 10 premium tacos, thick-cut fries, milkshakes, craft beer, and wine, according to Nation’s Restaurant News, an industry publication.
are they going after chipotle?
Essex says:
April 24, 2014 at 11:01 am
Taco Bell is launching a new upscale taco chain.
The restaurant, called U.S. Taco Co. and Urban Taproom, will feature a menu of 10 premium tacos, thick-cut fries, milkshakes, craft beer, and wine, according to Nation’s Restaurant News, an industry publication.
“I want to tell you one more thing I know about the Negro,” he said. Mr. Bundy recalled driving past a public-housing project in North Las Vegas, “and in front of that government house the door was usually open and the older people and the kids — and there is always at least a half a dozen people sitting on the porch — they didn’t have nothing to do. They didn’t have nothing for their kids to do. They didn’t have nothing for their young girls to do.
“And because they were basically on government subsidy, so now what do they do?” he asked. “They abort their young children, they put their young men in jail, because they never learned how to pick cotton. And I’ve often wondered, are they better off as slaves, picking cotton and having a family life and doing things, or are they better off under government subsidy? They didn’t get no more freedom. They got less freedom.”
Cliven Bundy
http://www.nbcnews.com/politics/politics-news/gop-scrambles-condemn-ranchers-remarks-race-n88556
This Bundy Guy makes some excellent points. Though score 0 for his political correctness.
anon (good one),
and presumably you do know what they are? how is that knowledge working out for you? because it seems you still are not able to afford your dream house.
Afford it? If houses doubled tomorrow, I could still make a move. See, your view of “affording” it is different than mine which is why… well… I can “afford” it and you can’t. Enjoy your view from the one horse town in which you live.
Nom I am aware they just do the printing but some of the errors are so egregious I have had regulators at the FDA call them the monkeys in the print shop. Transposed letters on regs and guidelines, off typeset. Just really stupid stuff but when you put it in the context of government your not entirely surprised.
Essex i I thought one of the names was Urban TAPEWORM and thought to myself wow truth in advertising
anon (good one),
You know nothing about investments, thus your stance on left-leaning dependence and your disdain for those who work hard and succeed. I understand completely. It’s a combination of fear and weakness. And the elites who reside in isolated, ivory towers become heroes because they justify their followers inadequacies.
“You know nothing about investments, thus your stance on left-leaning dependence and your disdain for those who work hard and succeed. I understand completely. It’s a combination of fear and weakness. And the elites who reside in isolated, ivory towers become heroes because they justify their followers inadequacies.”
Because buying a computer program that enables you to skim billions off other people’s trades is harder and more productive work than standing on your feet for 8 hours serving entitled a$$holes who think they succeeded without the benefits of government investment in education, protection, health, transportation, and technology.
Or by “hard work” do you mean spending the entire work day commenting on real estate blogs?
Libturd in Union says:
April 24, 2014 at 11:36 am
This Bundy Guy makes some excellent points. Though score 0 for his political correctness.
Leave it to the entitled rich welfare queens to blame racial minorities for their perceived troubles. Of course, only a racist would ignore the fact that blacks have been targeted disproportionately by the war on drugs, thus destabilizing their family lives and communities.
@libtard: I’ve worked with a ton of government agencies that spend 49¢ to mail me a check for a quarter.
Banks do this too. Had a fight with my bank because they refused to stop sending paper copies of our monthly statements. we also have $100 in a credit union so we can use their services and they mail statements each month for 40 cents telling us our account gained a penny in interest.
Ottoman,
My day doesn’t begin at 9:00 AM and end at 5:00 PM. When you’re tucked in your little liberal bed at 3:00 AM, I’m probably getting a phone call to look into a failed system job… mostly likely related to a computer program that skims billions off of other peoples trades. Don’t cry any tears for me though, I choose my profession and earn a decent dollar at it. And I stood on my feet and served those so-called entitled @ssholes and even cleaned the bathrooms where they took a sh1t. Tell your followers to stop whining over the rich and have the b@lls to cut their own path. You don’t like the game being played? Invent a new one but be sure to use your own dime instead of crying that the other guy next has two shiny dimes and you deserve one.
Ragnar says:
April 24, 2014 at 10:58 am
I will wait for Piketty to write a book on the rising inequality of the world’s population’s ability to hit baseballs, dunk basketballs, write computer programs, and distinguish economic thought from envy-fed flimflam written by demagogues.
The only envy I see is from right wing libertarian tools that ignore the advantages of living in a society that provides protections, education, and other benefits funded by taxes that enable them to succeed. And they think they’ve got a shot of joining the 1% of the 1% so they don’t have to drink West Virginia tap water like the lazy coal miners.
Gary,
This advice would be fine if it wasn’t for the fact that for me to invent a new game, it would ultimately entail violent confrontations with entrenched interests and their state mercenaries.
60.Fast Eddie says:
April 24, 2014 at 12:27 pm
You don’t like the game being played? Invent a new one
Why don’t you call their bluff and cut them off from these “invaluable” services while simultaneously stop taking property from them?
Ottoman says:
April 24, 2014 at 12:30 pm
The only envy I see is from right wing libertarian tools that ignore the advantages of living in a society that provides
Ottoman,
And why is it that those “entitled a$$holes” succeeded using the so-called “benefits of government investment in education, protection, health, transportation, and technology” yet others never take advantage of it? Why didn’t they use the same “government” resources as the “entitled a$$holes?” Your an “entitled a$$hole” when you succeed but a vict1m of the environment when sit on your @ss and live on slurpies. I never knew anyone in my life who failed to better themselves by reaching for a higher rung.
Otto,
Be careful about not getting paper statements. Most don’t take the time to read their bills, nor their HUD-1s for that matter. I read all of mine on the sh1tter for the most part. Not a big fan of playing turds with friends while in there. I have caught a costly mistake or two over the years. Plus, how many blue collar guys in the printing industry do you want to lay off so another Asian can leave his farm to work in such deplorable conditions that suicide often appears a better option than going to work the next day?
How’s the Prius running?
Oh…and baa!
“right wing libertarian tools”
Last I checked Gitmo was still open!
The government exists to take money from the majority directly and indirectly and give its favored sons. It exists to protect the already established & entrenched. Why do we look for this bastion of corruption this den of thieves and butchers to ever turn the tide?
If you remove the legitimacy and perception of authority that this organization has, it can’t do favors and take/give money to the evil corporations and billionaires. For example, the only reason Wall Street et al is ridiculously profitable with ridiculous compensation is due to the FED/gov.
Go after the source…
By today’s’ PC standards what Bundy said is easily derided the sad fact is he is not far off he just held it to one specific class. I think it was some Jewish guy in the Mideast who said something about men and fishing to that effect.
I just think there is a whole lot of irony in someone from a class of welfare queens vilifying another class of welfare queens.
Right Pain. The problem with providing welfare is not really the cost. Nor do I blame those that receive it as most were dealt a bad hand at birth. Though Bundy nailed it by restating the whole teach a man to fish proverb. I’ve said it here before. You could spend a million dollars per kid in Jersey City to educate them, but there still will be a sub 50% graduation rate. Would rather pay to have that school system shut down and bus the kids to a successful district where some of their peers who respect an education might rub off on them. Hell, give them full scholarships at any school they choose in return for 95% attendance. Instead, we pay people not to work. And the lefties know they’ll stay in power as long as they continue to provide these crumbs to their voting block. And Otto chooses to ignore the game his so-called liberal heroes are playing.
Libturd [69],
Exactly.
Taxpayers are subsidizing CEO pay
when Starbucks (SBUX) paid its chief Howard Schultz $236 million in “performance pay” in 2012 and 2013, it received about $82 million in tax credits, according to a report released Tuesday by the left-leaning Institute for Policy Studies.
http://buzz.money.cnn.com/2014/04/24/ceo-pay/?iid=Lead
yome not taking is giving. Tax credits are not subsidies but I’ll leave that for others to argue.
Tell us something we don’t know yome. If our government is bought by the highest bidder (regardless of party), why do you think they would change the rules to favor the least likely to purchase favor? Yes, executive pay is outrageous. Yes, corporate subsidies are outrageous. Yes, you are dumber than a box of rocks if you think either of the two major parties is going to change a damn thing about it.
Libturd,
http://www.mememaker.net/meme/oh-no-he-didnt/
Hah, the spring market is officially dead in CT. The guy who would not budge even two percent 6 months ago from 530k has now dropped to 495k since he relisted in March. I offered 460k cash. F that arrogant old pr*ck. Sellers are shaking out there. Buyers hold tight. This summer will be good. The recovery narrative has lost its audience.
Pain
We need to change the tax code and close all loop holes. I am for lowering with graduated tax brackets, like it is now.Eliminate all tax deductions corporate and individual. No more capital gains tax. Everything becomes income. The poorest wil be taxed 1 to 2 percent of income. Bring the highest bracket to 25 percent for billionaires. 20 percent for millionaires. 15 percent for above 300k to a million.10 for 60 to 300.I dont favor everybody pays one bracket. Everyone will be paying something. No more gaming the system.
[71] yome
You lie. Deductions are not credits. Not even the same thing under a different name. Completely different animal. That piece you posted is probably one of the more egregious examples of fabrication posing as analysis.
And the IPS is, in effect, advocating tax on gross, not net, revenues. So, under the scheme it envisions, a company could be losing money but still owe tax. Not a very good business model.
Finally, the report, and you, conveniently ignore the fact that the pay deducted by the corp is taxed on the individual. At a higher marginal rate.
You didn’t have much credibility on taxes before, but after posting that trash, you have none now. Do yourself a favor and admit to bring ignorant and duped; it’s a damn sight better than the rep you just gave yourself.
Also remember, according to the most influential psychologist of the 20th century, B.F. Skinner, humans have no free will, so never deserve praise or criticism. Didn’t you read one of these lefties’ Mother Jones link last week? They couldn’t help it.
In addition skinner said: “It is a mistake to suppose that the whole issue is how to free man. The issue is to improve the way in which he is controlled”
Sound familiar?
yome while it may seem noble and I agree with you on your whole close loopholes thing but a progressive tax bracket system is neither equitable nor does it prevent gaming the system.
I never tried to show I know about taxes. I copied and paste that article. I know what outrage me is companies using loop holes after loopholes to avoid paying taxes and cry we have the highest corporate tax in the world. Does any company really pay the 40 percent corporate tax rate?
How can it not prevent on gaming the system if you receive a dollar amount exceeding a certain amount is considered as an income. Again I am not pretending I know about the subject but I know congress needs to start debating on how to close loop holes
The right complains about the 50 percent not paying taxes, lets make them pay 1 percent. No more refunds during tax time just pay what you owe.
Such statutes delegitimatize the idea of regulation, by making it look merely like a way for governments to indulge special interests.
http://www.newyorker.com/talk/financial/2014/04/21/140421ta_talk_surowiecki
Where do I sign? But do you think that has a chance of happening, that would be an enormous effective tax increase on that group. What about FICA?
82.yome says:
April 24, 2014 at 2:07 pm
The right complains about the 50 percent not paying taxes, lets make them pay 1 percent. No more refunds during tax time just pay what you owe.
[80] yome
“Does any company really pay the 40 percent corporate tax rate?”
Why would they? Fed top rate is 35% so you can stay under 40% just by going to the right state.
BTW, our State and Fed average is 39%. The OECD average is 25%.
And what you complain of is the commonly used Section 162 business expense. Hardly a “loophole.” But abolish it and see what happens; it’ll be fun.
Logan man not hired by Salem County school district because he is white, lawsuit contends
http://www.nj.com/salem/index.ssf/2014/04/lawsuit_logan_man_wasnt_hired_by_penns_grove-carneys_point_school_district_because_he_is_white.html#incart_m-rpt-1
You are making too much sense, stop. Renting is for fools. Sometimes the market dictates that you must rent, but this is only during a huge bubble in real estate prices. No one should be buying real estate period during the bubble part of the real estate cycle, just like nobody that can afford a house right now should be renting. You are throwing away money, plain and simple. Anyone that makes a life of renting has no knowledge of how money works, otherwise they wouldn’t be throwing away money. I have never met someone that rents and is wealthy. True story.
yome says:
April 24, 2014 at 7:53 am
This statement again don’t take on account how much you will spend on rent. On my example yesterday. Numbers adjusted for eddie
A middle class family buying a $360,000 home putting down 20% with 15 year $288,000 mortgage at 3.5%.
Monthly is $2058.86 a month. $1300 goes to principal. Real cost is $758.00
Property tax is $10,000 a year that is $833 a month. Cost of owning against renting is $1592 a month against renting is $2400 according to zillow.
Deduction on tax and mortgage interest is $19,096. If at 25% bracket ,you are getting back $4774 a year.
Now your real cost of owning is only $1,194 against $2400 renting. No more mortgage after 15 years.
To satisfy Eddie:
Add $1200 equal to $100/month for insurance. Assume $100,000 for major repairs depreciate to 30 years is $278 a month
Now your real cost of owning is only $1,572 against $2400 plus increase in renting. No more mortgage after 15 years.
Increase in Property tax will be offset by increasing money going into principal and paying less interest which get computed on cost against renting.
2.If I am paying $1572 against renting at $2400 that means I am saving $828 a month. That is a 52% return on my $1572. Is in it?
“Over the past century, housing prices have grown at a compound annual rate of just 0.3 percent once one adjusts for inflation, according to my calculations using Shiller’s historical housing data. Over the same period, the Standard & Poor’s 500-stock index has had comparable annual returns of about 6.5 percent.”
Historically renting was assumed to carry a premium over buying due to the owner of the property bearing significantly more risk.
It isn’t about renting being more of less expensive, it’s about renting carrying significantly less risk for the renter, and the renter paying an additional fee for the owner as compensation for bearing that risk.
It isn’t that the renter doesn’t pay when the toilet breaks, or the roof leaks, it’s that the renter is always paying for the toilet to break and the roof to leak. They pay for it every month with a portion of their rent check.
Now, whether or not managing the rental is financially beneficial for the owner or not, is based on their ability to have priced that risk accordingly.
I guess a simple tax system is not really what we are aiming for.
joyce fica is for an insurance that majority of americans are in favor for. I will change the way payments are being paid, like working for 10 years entitiles you to get paid ss. It has to be atleast 20 years. Ssi should not be paid from ss fund. Eliminate spousal benefits giving the spouse to be able to collect from a living husbands pay. Collect what you put in. Spouse dies collect the larger amount. You did not work while the spouse was providing collect half not the full amount.
lol….great posts.
Just a comment, but it’s funny that the wealthy call being poor on welfare with no chance at a job an “entitlement”. What is so entitling about living in the streets of newark or paterson, in a roach infested apartment, grabbing a monthly check from uncle sam? That’s hell, imo.
Ottoman says:
April 24, 2014 at 12:15 pm
“You know nothing about investments, thus your stance on left-leaning dependence and your disdain for those who work hard and succeed. I understand completely. It’s a combination of fear and weakness. And the elites who reside in isolated, ivory towers become heroes because they justify their followers inadequacies.”
Because buying a computer program that enables you to skim billions off other people’s trades is harder and more productive work than standing on your feet for 8 hours serving entitled a$$holes who think they succeeded without the benefits of government investment in education, protection, health, transportation, and technology.
Ottoman says:
April 24, 2014 at 12:30 pm
Ragnar says:
April 24, 2014 at 10:58 am
I will wait for Piketty to write a book on the rising inequality of the world’s population’s ability to hit baseballs, dunk basketballs, write computer programs, and distinguish economic thought from envy-fed flimflam written by demagogues.
The only envy I see is from right wing libertarian tools that ignore the advantages of living in a society that provides protections, education, and other benefits funded by taxes that enable them to succeed. And they think they’ve got a shot of joining the 1% of the 1% so they don’t have to drink West Virginia tap water like the lazy coal miners.
Imagine a world where we take Michael’s advice.
hey mikey, if all when out and bought multi’s and/or primary residences… do you see any flaws in your plan?
Alex Jones interview with Cliven Bundy
https://www.youtube.com/watch?v=wCJ59tls0vc
Yome I’m all for a simplified tax code but don’t underestimate the ability of people to game a system when they think someone is getting a fairer deal than they are.
It’s my understanding that chicagofinance was renting a beautiful home from someone who bought during the bubble. The landlord was losing money each month. Landlords don’t come up with rental prices on a cost plus basis.
87.Michael says:
April 24, 2014 at 2:22 pm
I have never met someone that rents and is wealthy. True story.
I guess you hate minorities too.
89.yome says:
April 24, 2014 at 2:27 pm
… that majority of americans are in favor for.
These are the idiots that think being a landlord is a terrible idea, the one’s who buy a rental property in a bubble.
If renting was financially better than owning, nobody would decide to buy a property. You would be a fool. In reality it’s quite the opposite, the renter is the idiot. I should reword that, the renter who could afford to own is an idiot. The other renters, I feel bad for, they are in a crappy situation, in which they have no choice but to pay the man.
If renting was financially better than owning, every single wealthy person would be renting! To the guy who wrote the article, stop spreading bs, that it’s financially better to rent over owning a home in the long run. Yome forgot to add, that after you finish paying your house off, you are only left with the taxes. How can a renter compete with that?
“Now, whether or not managing the rental is financially beneficial for the owner or not, is based on their ability to have priced that risk accordingly.”
Black Conservative: I don’t care if Cliven Bundy is a racist
https://www.youtube.com/watch?v=wCJ59tls0vc
Ottoman says:
April 24, 2014 at 12:22 pm
Libturd in Union says:
April 24, 2014 at 11:36 am
This Bundy Guy makes some excellent points. Though score 0 for his political correctness.
Leave it to the entitled rich welfare queens to blame racial minorities for their perceived troubles. Of course, only a racist would ignore the fact that blacks have been targeted disproportionately by the war on drugs, thus destabilizing their family lives and communities.
The real advantage of renting is the freedom of mobility and the savings that come when one is forced to move. Due to the amortization table on mortgages, one barely pays down their principle until about 7 years into a 30-year loan. Even on a 15 year, one doesn’t really start chipping away at the nut until about 4 years in. When you consider how frequently first time home buyers in their 20s and early 30s move, in most cases, regardless of the housing cycle, they would have been better off renting. Throw in move in costs each time you buy vs. rent and renting really becomes a no brainer.
As to Michael’s argument that RE is a better investment than stocks or bonds, he is simply on crack. He will learn this the hard way unfortunately. And I own two homes!
Sums up the bottom line problem with every govt and economic system…..people always trying to scam their way out of paying. A few people start doing it, than a few more, and eventually you have anyone who makes money, hiring an accountant to get out of paying the full amount. It’s crazy.
Comrade Nom Deplume, Guardian of the Realm says:
April 24, 2014 at 9:25 am
[12] grim,
“This is idiotic – how do people like this actually get press?”
This is brilliant. It has little chance of passing, zero chance of collecting more revenue than it destroys, but it generates lots of business for the tax planning community.
I would LOVE to see the sort of tax that Krugman/anon advocate. It is one of the easiest taxes to avoid. I would especially love it at the state level or if it only taxed certain forms of wealth or ownership. That makes avoidance even easier though the distortion effects would be awful. And if it was a comprehensive tax designed to uncover every rock and tax everything beneath it, don’t be standing near any exits and cover your ears. The giant sucking sound would be deafening.
Too bad the taxpayers unwillingly bailed out the stock market in 2008, than all you fools would be singing a different tale. You don’t get it, because you never went through it, but a stock market can crash at any got damn moment. A house still is worth something no matter what. Keep thinking the stock market can’t crash. It always crashes, it’s not about whether it will or not, but when. Name one country in which the stock market didn’t crash in the past 100 years? In reality, the stock market isn’t even run on fundamentals anymore, it is one big ponzi scheme.
“As to Michael’s argument that RE is a better investment than stocks or bonds, he is simply on crack. He will learn this the hard way unfortunately. And I own two homes!”
I haven’t been on this damn board for awhile and I come back here and see the same damn “woe is me wringing my damn hands” over damn real estate. Look, they’re not making any more of it and people are gonna want to buy it, so put a damn sock in it. Do you really know what the real threat is in the damn world? It’s the stinking commie Ruskies. They just grabbed part of damn Ukraine and the damn pantywaist in the White House didn’t do shlt. That damn Putin is running the hell all over him and now is talking a bunch of crap about taking even more of the damn country. That’s a bunch of bullspit and my damn blood is boiling. We should have put our damn soldiers over there and marched right the hell to the gates of damn Moscow and dragged his ass off to Guantanamo Bay so we could “talk” with him. But no, we wanted to sanction him. Real men don’t mess around with that sanction crap. Real men fight. The only way this thing might possibly turn out good is if I can flip some damn real estate in Ukraine–but that’s tough because the damn commies want everyone owning every damn thing. I put real estate terrorists, Putin, Islamic militants, snakes and stinking cats in the same damn category—they’re all lowlifes and can’t be trusted. I hate them all.
Michael. I watched my multi, which cost me nearly 600K go down to almost 300K. How is this different than the stock market crash we just experienced in 2008? The major indexes have all recovered fully and then some (accept the Nasdaq, but only a fool puts all their eggs in one basket). My house is only worth 480K at best today. Plus, the carry costs have been phenomenal. Guess what I’ve added to my stock investments? Nothing.
Real estate is historically a terrible investment. Is it cheaper than renting for long-term shelter? Sure.
And don’t think the gubmint didn’t bail out a whole bunch of losers who signed on the dotted line for loans they couldn’t afford. How many rounds of mortgage modifications and loan forgiveness programs were there? More than I could count on two hands.
100- also, I want to clear this up. Real estate, as in owning one home that you live in will never compete with stocks, it’s not an investment, it’s your home. Multiple properties, in good locations, bought at the right price, collecting RENT, will beat out the stock market avg.
You know what’s a joke? That Apple is up 9% on that POS earnings report.
Though I’m not complaining. My investment club sells it’s last chunk in a couple of weeks.
“Multiple stockss, in good sectors, bought at the right price, collecting DIVIDENDS, will beat out the housing return average ten times over.”
Multiple anything, bought at the RIGHT price, collecting earnings on the go, beat everything else.
Silly kids.
Lib are you selling pre or post split?
Per Michael’s decrees, now that I am in my 50’s, the only thing I really know for sure, is that I really don’t know much, except I know more than I did in my 30’s!!!!
Renting provides mobility but you are at the mercy of your dumbest, unsafest or most annoying building mate.
Owning a home provides some privacy, security, safety, but if the area (block, town, city, state) gets a negative impact (jobs, finances, terror, natural disaster) you can not extricate yourself easily or cheaply.
[99] Michael
“A few people start doing it, than a few more, and eventually you have anyone who makes money, hiring an accountant to get out of paying the full amount. It’s crazy.”
No, it’s perfectly rational. If hiring me helps you to determine what your legal minimum obligation is, or how you can change things to reduce it further, and your tax savings is more than my bill, it is completely, purely, ruthlessly rational.
? Sorry I did not get that
joyce says:
April 24, 2014 at 2:39 pm
I guess you hate minorities too.
89.yome says:
April 24, 2014 at 2:27 pm
… that majority of americans are in favor for.
Joyce, I got it. I had to re read my post. No, I dont hate them. It just make sense
Pain…makes no difference pre or post. The sooner the better in my opinion.
But you seem to want to steam-role the minority when you have the same opinion of the majority.
111.yome says:
April 24, 2014 at 4:31 pm
Joyce, I got it. I had to re read my post. No, I dont hate them. It just make sense
Of course, it’s rational. You’re aboslutely right. And speaking of rational, the only answer to the question of what is the correct way to tax (if there could be such a thing), is to keep it all forms of taxation in aggregate simple – limited in number or types – and low as to gain compliance which would require a small cost for oversight.
109.Comrade Nom DePlume says:
April 24, 2014 at 4:16 pm
[99] Michael
“A few people start doing it, than a few more, and eventually you have anyone who makes money, hiring an accountant to get out of paying the full amount. It’s crazy.”
No, it’s perfectly rational. If hiring me helps you to determine what your legal minimum obligation is, or how you can change things to reduce it further, and your tax savings is more than my bill, it is completely, purely, ruthlessly rational.
For all the people who imagine that big bad corporations don’t pay taxes, I just looked up some facts, and found they don’t fit the lefty narrative about how companies don’t pay taxes. Just like in real life I am apparently in the 1% for now and do pay 40%+ taxes, and no there aren’t magical loophole secret codes enabling me to avoid them. I probably pay even more taxes as a % of my income than Warren Buffet’s secretary, because she doesnt’ have to pay the dreaded self-employment tax nor does she pay NJ State income taxes.
On a financial database, I filtered on companies in the S&P1500 composite.
For their last fiscal years, in sum, these companies earned Net Income in US$ million of 1,062,134 (one trillion $). They paid taxes of 358,741 x $1mn (about $360 billion). That means they paid in aggregate about 25% of pretax earnings in taxes.
What company was the most generous contributor to the public welfare via taxes?
Exxon Mobil, paying $24 billion of taxes, a whopping 42% of pretax income. Chevron paid $12bn, also at a high rate.
Is Mother Jones or Daily Kos crowd going to thank these public spirited companies for their taxpaying Gold and Silver medals?
Is Mother Jones or Daily Kos crowd going to thank these public spirited companies for their taxpaying Gold and Silver medals?
They are criminals that are exploiting natural resources that don’t belong to them and polluting the environment on the way to profit. They should be destroyed. We don’t want their blood money.
Lib, you bought during a bubble and you still have your head. Meaning, you bought at the absolute worst time, and if you hold long enough you will still make out. You are telling me you can do this (terrible move) with other investments and still come out alive?
I bought my multi for 200,000. Collect close to 50,000 in rent, please tell me how stocks can give me that kind of return. Hell, even if I paid 250,000, how can stocks compete? Remember I only had to put 40,000 down to make 400,000 in 10 years. The renters payed for the house and some, and buying at the right time netted me an extra 200,000 in my asset more than doubling in value. Got a boost not only from collecting rent, but also from appreciation of the property, which is just icing on the cake. I’m not renting out houses, hoping to make money on the price going up. I’m trying to make money by being a landlord, which means, taking my money and buying an investment vehicle for which I can generate more money. Just because you had one bad experience with real estate investing, don’t give up on it. If there were any multi’s available, I would def recommend buying it, but that’s the thing with real estate, most of the good real estate is taken, if you get an opportunity to buy good properties, don’t second guess yourself, pull the trigger while the opportunity is there.
Libturd in Union says:
April 24, 2014 at 3:17 pm
Michael. I watched my multi, which cost me nearly 600K go down to almost 300K. How is this different than the stock market crash we just experienced in 2008? The major indexes have all recovered fully and then some (accept the Nasdaq, but only a fool puts all their eggs in one basket). My house is only worth 480K at best today. Plus, the carry costs have been phenomenal. Guess what I’ve added to my stock investments? Nothing.
Real estate is historically a terrible investment. Is it cheaper than renting for long-term shelter? Sure.
And don’t think the gubmint didn’t bail out a whole bunch of losers who signed on the dotted line for loans they couldn’t afford. How many rounds of mortgage modifications and loan forgiveness programs were there? More than I could count on two hands.
Exactly!!! Well said!!!
If someone comes and takes a shit on your dinner plate, would you be ok with it? Then why are you ok with companies shitting on the only planet we can live on? Is not the earth, no different than your dinner plate?
grim says:
April 24, 2014 at 4:56 pm
Is Mother Jones or Daily Kos crowd going to thank these public spirited companies for their taxpaying Gold and Silver medals?
They are criminals that are exploiting natural resources that don’t belong to them and polluting the environment on the way to profit. They should be destroyed. We don’t want their blood money.
Thanks Rags.
You know, I had some ultra liberal friends over last year for a holiday dinner. I forgot which one it was. Well the topic was the Iranian nuke reactor. The libs were all about sanctions (like we trade with them) and claimed that if Israel or the US bombed the reactor, WWIII would break loose. I told them that they were all nuts and that Israel has the right to do whatever the f’ they want after what Ahmadinejad has said about the Jews especially in relation to the Holocaust. And that the world would thank Israel privately as they berated them publicly. Fortunately Ahmadinejad term limited out and Iran is probably far from developing a nuke. You would know if they were close. Israel would have taken care of it already.
For a 1%er, you have some crappy financial advice. Go buy things, that will create write offs. How are you a 1%er, and paying over 40% in taxes?
Also, I find it highly unbelievable that Exxon payed 42% of their pre-tax earnings on taxes. Where did you get this from?
April 24, 2014 at 4:42 pm
For all the people who imagine that big bad corporations don’t pay taxes, I just looked up some facts, and found they don’t fit the lefty narrative about how companies don’t pay taxes. Just like in real life I am apparently in the 1% for now and do pay 40%+ taxes, and no there aren’t magical loophole secret codes enabling me to avoid them. I probably pay even more taxes as a % of my income than Warren Buffet’s secretary, because she doesnt’ have to pay the dreaded self-employment tax nor does she pay NJ State income taxes.
On a financial database, I filtered on companies in the S&P1500 composite.
For their last fiscal years, in sum, these companies earned Net Income in US$ million of 1,062,134 (one trillion $). They paid taxes of 358,741 x $1mn (about $360 billion). That means they paid in aggregate about 25% of pretax earnings in taxes.
What company was the most generous contributor to the public welfare via taxes?
Exxon Mobil, paying $24 billion of taxes, a whopping 42% of pretax income. Chevron paid $12bn, also at a high rate.
Is Mother Jones or Daily Kos crowd going to thank these public spirited companies for their taxpaying Gold and Silver medals?
Michael…I’m done trying to explain it to you. Wait a few years and replace the roof, the main drain to the street and a boiler. Then tell me about how profitable it is. And I didn’t buy even close to the top of the bubble. Had I, I would have paid 20% more than I had.
Here ya go Michael.
Rags was 100% right.
https://drive.google.com/file/d/0B4EcY86jtyq6bmM5UlNjczRURU0/edit?usp=sharing
You guys are right, but this helps explain why they actually do. It seems they pay way more in taxes than other corporate industries. They can still suck it, they didn’t invent oil, why should they get to make money off it, if it comes from the ground. That’s like charging someone to breath air. What’s diff about it?
“Based on federal regulations, the corporate federal tax rate is roughly 35% for any company that makes over $18 million a year in income. But just like individuals filling out their tax forms, the amount that is paid is rarely the same as that individual’s effective tax bracket. There are always plenty of deductions and additions that are used to adjust income. With all of these tax benefits, the amount that ultimately goes to the IRS might not even approach that number. Just look at ExxonMobil’s (NYSE: XOM ) and Chevron’s (NYSE: CVX ) income tax levels for 2012.
Company Earnings Before Taxes (USD Millions) US Income Taxes (USD Millions) Percent of Income
Exxon 84,585 2,977 3.5%
Chevron 46,332 4,665 10%
Source: Company 10-Ks
Tax rates like that are more than enough to enrage individuals who see a much larger part of their paycheck get taken away, and it certainly gives plenty of firepower for someone who wants to argue that oil companies don’t pay enough.
There are a couple things to consider when looking at these numbers. First, these are global oil companies, and not all of the taxes they pay are in the United States. Also, there are several taxes that are specific to the oil and gas industry that are not normally accounted for in income taxes. For example, oil companies need to pay $0.08 per barrel of oil for a trust fund that’s used to pay for oil spills, and they need to pay royalties for any oil that produced on federal lands. When you figure in these additional taxes to Exxon’s tax bill, you get a figure in the U.S. of $12.1 billion.
That brings the tax rate up to about 14%, which still seems pretty paltry for the world’s largest company. What you also need to consider, though, is the word “world.” With operations in more than 43 countries, each country wants a piece of that pie through its own taxes, royalties, and so on. When all of these things are tallied up worldwide, Exxon dolled out $102 billion to governments in 2012. ”
“What a Fool believes
The thing about numbers is that they can be easily presented in a way that gives credence to any argument, and any fact or truth can be produced to back up a claim. Do big oil companies like Exxon pay considerably lower U.S. income taxes than individuals? Yes. But do they pay a high tax rate that would seem unfair to other sectors? Yes. So if the Obama administration thinks the oil industry should pay its fair share, they can find a way to frame that argument, and the opposition can give its own side just as well.”
http://www.fool.com/investing/general/2013/04/27/do-oil-companies-pay-enough-in-taxes-or-too-much.aspx
Of course, it’s rational. You’re aboslutely right. And speaking of rational, the only answer to the question of what is the correct way to tax (if there could be such a thing), is to keep it all forms of taxation in total simple – limited in number or types – and low as to gain compliance which would require a small cost for oversight.
109.Comrade Nom DePlume says:
April 24, 2014 at 4:16 pm
[99] Michael
“A few people start doing it, than a few more, and eventually you have anyone who makes money, hiring an accountant to get out of paying the full amount. It’s crazy.”
No, it’s perfectly rational. If hiring me helps you to determine what your legal minimum obligation is, or how you can change things to reduce it further, and your tax savings is more than my bill, it is completely, purely, ruthlessly rational.
in moderation?
I do find this obnoxious though. So they call putting away money for a spill a tax? Also, they need to pay royalties for any oil on federal land….oh cry me a river, you are taking your product from federal lands and then cry about having to pay extra for it. What babies.
“For example, oil companies need to pay $0.08 per barrel of oil for a trust fund that’s used to pay for oil spills, and they need to pay royalties for any oil that produced on federal lands. When you figure in these additional taxes to Exxon’s tax bill, you get a figure in the U.S. of $12.1 billion.”
Michael,
You are truly the dumbest box of rocks this blog has seen. Grim’s comment about blood money was sarcasm.
126- thanks for calling me dumb. That must make you intelligent. How am I supposed to know if he is being sarcastic? He drives an electric car, how was I supposed to know he was being sarcastic?
Context, perhaps. Remember other comments on the same/similar subjects. Are you able to remember comments from one day to the next?
Of course it’s rational, when you are profiting from it.
It’s also certainly rational that our tax system makes absolutely no sense. It’s like a game of catch me if you can.
Call me a hypocrite, I do the same thing. That was the reason I bought my first house, so I would be able to write stuff off. That’s my problem with the tax system, and what I meant when I said it starts out with one guy, and eventually it’s almost everyone. Even people like me that don’t agree with it, participate in it, what am I going to pay more taxes than the next guy out of principle, hell no, I’m going to have to do the same thing. This is why our tax system is a joke.
109.Comrade Nom DePlume says:
April 24, 2014 at 4:16 pm
[99] Michael
“A few people start doing it, than a few more, and eventually you have anyone who makes money, hiring an accountant to get out of paying the full amount. It’s crazy.”
No, it’s perfectly rational. If hiring me helps you to determine what your legal minimum obligation is, or how you can change things to reduce it further, and your tax savings is more than my bill, it is completely, purely, ruthlessly rational.
I’m too dumb, remember?
joyce says:
April 24, 2014 at 6:17 pm
Context, perhaps. Remember other comments on the same/similar subjects. Are you able to remember comments from one day to the next?
[126] Joyce,
I think that’s a bit harsh. At the very least, Michael has opinions and can engage. anon, OTOH, is as dumb as a box of rocks, IMHO.
Comrade,
Don’t forget Ottoman… the king (or queen) of not engaging.
I do, do you
131.Michael says:
April 24, 2014 at 6:20 pm
I’m too dumb, remember?
I have owned my multi since 99, screw roofs, I can build a new house with the equity I have created from that investment.
Libturd at home says:
April 24, 2014 at 5:24 pm
Michael…I’m done trying to explain it to you. Wait a few years and replace the roof, the main drain to the street and a boiler. Then tell me about how profitable it is. And I didn’t buy even close to the top of the bubble. Had I, I would have paid 20% more than I had.
134- Had the waterline to the street replaced a couple years ago. Boilers shouldn’t be a big deal. Had the boiler replaced on the rear unit this past winter. The main house will need three boilers within 10 years.
You are going to hate me for this, but my brother is a licensed plumber with his own business.
131- we might not always see eye to eye, but you are a good guy. You are very open minded and a very reasonable man.
A stunning piece of insanity came out of Uncle Warren’s mouth today…..
He was asked about the CocaCola resolution put before the shareholders (Berkshire has a big position) and how he was voting on it. He said he “abstained.”
But it was the next statement that left me speechless.
He said that “It’s kind of un-American to vote ‘No’ at a Coke meeting”; adding that “taking them on is a bit like belching at the dinner table.”
WHAT?
Worse, in a follow-up he asked if he silently sat for — or worse, voted for — other compensation plans he didn’t like and he said not only had he but he had never seen anyone in his 55 years speak out against them at a boardroom table!
So exactly what, may I ask, is the purpose of a corporate board if the directors will not vote as the believe is in the best interest of the firm, and worse, what purpose is holding shares in the first place if shareholders won’t vote their interests?
What Warren said, in short, is that despite being one of the richest men in the world, despite wielding enormous power through Berkshire’s holdings in various companies, far more than you ever will, even for a man like him corporate governance is nothing more than a joke and not only will boards do whatever the hell they want they will also do whatever operating management wants, despite it being their fiduciary duty to act in the best interest of shareholders, not management.
In short not only do you have no voice in the public political sphere you have none in the corporate sphere either.
For extra credit you may attempt to explain why any sane person would comply with the “reasonable requests” of either corporations or government, given these facts.
http://market-ticker.org/akcs-www?post=228960
Joyce,
Lol! I love reading your stuff. :)
I left out your best characteristics….highly intelligent and extremely well thought out arguments
Nom why would you insult a box of rocks like that they may at least have some minerals with value
HEY OTTOMAN, WHERE ARE YOU? I’M LOGGED ONTO WORK AFTER GETTING HOME FROM THE OFFICE!! I COULDN’T EVEN FINISH MY DINNER!
KNOCK, KNOCK!! OTTOMAN? OTTOMAN?
You are also very intelligent, and dare I say, can debate with the best of them. You put together a great argument (most of the time). I just wish you weren’t always on your period. It doesn’t make you a better person.
Btw, do you have photographic memory, it’s incredible some of the stuff you remember.
joyce says:
April 24, 2014 at 6:58 pm
I do, do you
131.Michael says:
April 24, 2014 at 6:20 pm
I’m too dumb, remember?
Michael, too bad that with you, it’s your brain that’s bleeding.
Clots’s the best!