What budget? Why worry? How do people do it?

[dvcgirl]

Very well said!

I love your vent, it's the same thing that's always aggrivated me. When you're on the high tax bracket end of things, then you see how unfair it is to work so hard and pay so much taxes while you're surrounded by people who honestly think welfare is a way of life, and not just a temporary form of help for those who fall on a hard time. In all honesty it scares me to think about the future of our country if the rate of people who take from the system continues to grow faster than the rate of people who pay into the system.

I understand your frustration. My DH and I are 14 years older than you and your DH and our income puts us in the highest tax bracket. I really used to get fired up about paying what I felt like was "more than my fair share" of taxes. Even up until the recent financial crisis....I'd still get upset and feel like, "where's my government handout?"

However, with the last crisis we had millions of Americans who were following the rules and got caught up in the net. Sure, we have people who are always going to milk the system. But the older I get, the more I look at the small percentage of "serial offenders" and think..."what do they really have?" Most if not all are living below the poverty line. They're always living life on the edge.

And I wouldn't want to be dependent on these programs, as cuts are coming....they have to come. The Entitlement programs (SS, medicare, medicaid and welfare/unemployment/food stamps) and the military make up 75% of our Federal budget. To even come close to balancing our budget and remotely think about beginning to pay down the Federal debt, taxes will have to go up (on everyone) and these programs will have to be cut. We aren't going to grow our way out of this one.

We'll just continue to work hard, save and invest. And as always, we will not factor Social Security into our retirement plans. I do believe we'll receive something, but anything we do get we'll consider a bonus. And that bonus will likely go towards the much higher Medicare premiums that we'll face in the future.

 

[crisi]

High tax bracket end of things??? Taxes for the high end are at a historical low. For the last 10 years there has been tax cut upon tax cut upon tax cut. Maybe instead of cutting taxes for the "job creators" they should pay the taxes and those funds should used to actually create jobs - then you won't have to worry about people sitting around on a lifetime of welfare, but instead can offer jobs with living wages.
People aren't looking to be lesligated into prosperity, the just want a fair wage in which they can support their family. Nothing wrong with that.

I just did mine. My federal income tax burden - 19%. Its been less when we've had more capital gains - last year we sold almost no stock. We make well into six figures. I feel like walking around with a sign "please raise my taxes." Dollar wise, its a lot of money. Relative to how much money flows through our house. Not much at all.

We also luck out on social security since our incomes are above the cap. So everyone else is paying, what? 9% now. We pay closer to 7%. Our proportional property tax is really low since we live in a pretty darn middle class house compared to our income. We live in a high tax state, so that comes in a little hefty, but not too bad. And sales tax wise - I buy so little that has sales tax on it - Minnesota doesn't tax clothing or food, and what else do I need at this point?

I'm sure everyone railing against government handouts has saved adequately for their kid's college and so won't need to send their kids to a subsidized public school or require federal aid. Because by the logic here, unless you have done this and don't need those hand outs, you really shouldn't be taking these Disney trips.

 

[Muushka]

For anyone who agreed with the OP and has Netflix, Atlas Shrugged Part 1 now streams.

 

[dvcgirl]

For anyone who agreed with the OP and has Netflix, Atlas Shrugged Part 1 now streams.

Ugh, that was painful to watch. They did a terrible job with it....really cheesy and poorly made.

 

[Muushka]

Ugh, that was painful to watch. They did a terrible job with it....really cheesy and poorly made.

I agree with you somewhat, with a but. The funding for this movie was extremely limited. They knew that it would not be something that the masses would run out to see.
I watched it again last night (first time I saw it was in the theater) and I still thought it was a pretty good movie.
It was nice to see the concept in movie form.

The book is so long, it is a nice alternative to those who don't like to read.

 

[dvcgirl]

I'm sure everyone railing against government handouts has saved adequately for their kid's college and so won't need to send their kids to a subsidized public school or require federal aid. Because by the logic here, unless you have done this and don't need those hand outs, you really shouldn't be taking these Disney trips.

Well, this is the problem isn't it? Many Americans want "smaller government" as long as it doesn't affect them.

Look at the people who attend the Tea Party rallies. Many of them are older Americans or those serving in the Military. They'd all be okay with big cuts to Social Security, Medicare and the Military? I think not.

I heard a caller to the Rush Limbaugh show recently. Many of his callers want the government out of their lives. Less government, no Obamacare, lower taxes....right? But this woman was a physician who was praising Rush for "speaking the truth" but then went on to talk about how liberals are "pushing our elderly off a cliff". Why? Cuts to medicare that have already taken place.

So, most physicians would be fine with cuts everywhere...except to medicare, but it affects their bottom line. I understand her point, but there's not magic bullet here.

I've seen lots of students at the 99% rallies....and they'd like the government to pick up their student loan tabs.

So Americans pretty much want to pay less in taxes but see no cuts in services. Or at least no cuts in the services that matter to *them*.

 

[Acklander]

I've seen lots of students at the 99% rallies....and they'd like the government to pick up their student loan tabs.

*them*.

From what I understand, the students aren't looking for the government to pick up the tab on the loans, but with the interest.

Look at it this way, if a bank loans an individual money, the bank charges interest to cover their expenses, a percent of the losses, and income for the bank.
When a bank loans money to a student, you still have the overhead, but you don't need to charge for the losses since the government is guaranteeing the funds will be paid. So the bank is earning the income without any risk.
In many countries the government will loan the money to their students at a much cheaper rate or interest free, going with the logic that a well educated society is worth the investment of interest free loans.
What many students are asking is for the government to cut out the middleman, which will make education (and student loans) more affordable.

 

[Muushka]

Well, this is the problem isn't it? Many Americans want "smaller government" as long as it doesn't affect them.

Look at the people who attend the Tea Party rallies. Many of them are older Americans or those serving in the Military. They'd all be okay with big cuts to Social Security, Medicare and the Military? I think not.

I heard a caller to the Rush Limbaugh show recently. Many of his callers want the government out of their lives. Less government, no Obamacare, lower taxes....right? But this woman was a physician who was praising Rush for "speaking the truth" but then went on to talk about how liberals are "pushing our elderly off a cliff". Why? Cuts to medicare that have already taken place.

So, most physicians would be fine with cuts everywhere...except to medicare, but it affects their bottom line. I understand her point, but there's not magic bullet here.

I've seen lots of students at the 99% rallies....and they'd like the government to pick up their student loan tabs.

So Americans pretty much want to pay less in taxes but see no cuts in services. Or at least no cuts in the services that matter to *them*.

You are 100% correct.

Count me in as a citizen who wants everything cut. Including military.

Medicare. Don't get me started on that. Many years ago when working in a docs office, I used to deal with many Medicare patients. They would walk in the office demanding their blood work be done, because it was 'free'. Blood tests that had just been performed. They used to drive me crazy. I would say to them, yes, it is free for them, but someone has to pay for these tests (me for example). And then I would have to do it for them. Thankfully they can't do that anymore.

The way it its set up now, they can have unlimited medical coverage (not cholesterol levels!). I think Paul Ryan's plan of receiving a voucher to buy the plan and if you want unlimited coverage, you need to pay for it. As it is now, many wealthy medicare patients are getting way too many benefits that they should be paying for.

So, most physicians would be fine with cuts everywhere...except to medicare, but it affects their bottom line. I understand her point, but there's not magic bullet here.

Here I disagree just a tad. Docs take a huge hit with Medicare reimbursements.
If they continue to too heavily discount doc fees, the docs will simply stop taking Medicare patients. That is not good either.

 

[crisi]

From what I understand, the students aren't looking for the government to pick up the tab on the loans, but with the interest.

Look at it this way, if a bank loans an individual money, the bank charges interest to cover their expenses, a percent of the losses, and income for the bank.
When a bank loans money to a student, you still have the overhead, but you don't need to charge for the losses since the government is guaranteeing the funds will be paid. So the bank is earning the income without any risk.
In many countries the government will loan the money to their students at a much cheaper rate or interest free, going with the logic that a well educated society is worth the investment of interest free loans.
What many students are asking is for the government to cut out the middleman, which will make education (and student loans) more affordable.

The banks still have the time value of money issue. If I give you $5 today and a year from now you give it back to me without interest, how much milk will it buy today vs. a year from now? How much gas? How much Berkshire Hathaway stock? Gold? Passes to Disney? It isn't just the "risk" of default, its the risk of inflationary pressures. Since there is almost always inflation (and when there isn't, that isn't good), there is always a cost to money I loan you today.

 

[disneysteve]

Many years ago when working in a docs office, I used to deal with many Medicare patients. They would walk in the office demanding their blood work be done, because it was 'free'.

This still happens every single day in our office with many insurance plans, especially Medicaid (a government program). When you separate the consumer from the cost of the service, you create that mindset - it's free so do it. It is most certainly not free but just try to tell that to someone who doesn't see the cost coming directly out of their pocket.

As for Medicare and physician reimbursement, here's a quick story. My biller told me on Friday that Medicare will only pay us to irrigate clogged wax out of a patient's ear if I do it personally. If my medical assistant does it, no payment for that service. Also, they will only pay for it if the clogged ear was not the reason for the patient's visit. If that's why the patient came, they'll pay for the visit but not the procedure. So if the patient comes for an ingrown toenail, I can get paid for flushing out their ear, but if they come for a clogged ear, I can't. How does that make any sense at all?

 

[Muushka]

This still happens every single day in our office with many insurance plans, especially Medicaid (a government program). When you separate the consumer from the cost of the service, you create that mindset - it's free so do it. It is most certainly not free but just try to tell that to someone who doesn't see the cost coming directly out of their pocket.

As for Medicare and physician reimbursement, here's a quick story. My biller told me on Friday that Medicare will only pay us to irrigate clogged wax out of a patient's ear if I do it personally. If my medical assistant does it, no payment for that service. Also, they will only pay for it if the clogged ear was not the reason for the patient's visit. If that's why the patient came, they'll pay for the visit but not the procedure. So if the patient comes for an ingrown toenail, I can get paid for flushing out their ear, but if they come for a clogged ear, I can't. How does that make any sense at all?

It makes no sense whatsoever.

What did you think of Paul Ryan's voucher for Medicare plan?

 

[crisi]

This still happens every single day in our office with many insurance plans, especially Medicaid (a government program). When you separate the consumer from the cost of the service, you create that mindset - it's free so do it. It is most certainly not free but just try to tell that to someone who doesn't see the cost coming directly out of their pocket.

As for Medicare and physician reimbursement, here's a quick story. My biller told me on Friday that Medicare will only pay us to irrigate clogged wax out of a patient's ear if I do it personally. If my medical assistant does it, no payment for that service. Also, they will only pay for it if the clogged ear was not the reason for the patient's visit. If that's why the patient came, they'll pay for the visit but not the procedure. So if the patient comes for an ingrown toenail, I can get paid for flushing out their ear, but if they come for a clogged ear, I can't. How does that make any sense at all?

And that is why insurers require co-pays. So you think at least a little.

Private insurance is no different. My insurance will only cover ONE THING at the doctors office. If I go in for a cold and mention my back has been acting up, the doctor can't do anything about the back, I have to make a separate appointment. Since most people I know basically collect those little medical nagging issues until they make an appointment, and then unload them all at once (which maximized their time, and hopefully the medical staff time as well), this isn't doing anyone any favors except the insurance companies.

 

[eliza61]

Well, this is the problem isn't it? Many Americans want "smaller government" as long as it doesn't affect them. Look at the people who attend the Tea Party rallies. Many of them are older Americans or those serving in the Military. They'd all be okay with big cuts to Social Security, Medicare and the Military? I think not.

I heard a caller to the Rush Limbaugh show recently. Many of his callers want the government out of their lives. Less government, no Obamacare, lower taxes....right? But this woman was a physician who was praising Rush for "speaking the truth" but then went on to talk about how liberals are "pushing our elderly off a cliff". Why? Cuts to medicare that have already taken place.

So, most physicians would be fine with cuts everywhere...except to medicare, but it affects their bottom line. I understand her point, but there's not magic bullet here.

I've seen lots of students at the 99% rallies....and they'd like the government to pick up their student loan tabs.

So Americans pretty much want to pay less in taxes but see no cuts in services. Or at least no cuts in the services that matter to *them*.

LOL. that pretty much wraps it up very nicely. I like the one where everyone wants a balance federal budget as long as we don't touch ss, medicare, medicaid, military, education....

I'm still trying to figure out how that magic trick is going to work.

Oh yes and don't raise my taxes.

And here I thought only magical things happen in disneyworld.

 

[dvcgirl]

High tax bracket end of things??? Taxes for the high end are at a historical low. For the last 10 years there has been tax cut upon tax cut upon tax cut. Maybe instead of cutting taxes for the "job creators" they should pay the taxes and those funds should used to actually create jobs - then you won't have to worry about people sitting around on a lifetime of welfare, but instead can offer jobs with living wages.
People aren't looking to be lesligated into prosperity, the just want a fair wage in which they can support their family. Nothing wrong with that.

First of all, I love that this thread is a really good discussion. If we're ever going to get anywhere in this country, we have to be able to listen to all viewpoints.

I know where you're coming from with respect to "livable wage". I just don't know how the government would accomplish that. Wages have absolutely been stagnant for the last decade for the middle class. It's a huge problem because the cost of everything is going up and wages just aren't keeping up. The gap between the "haves" and the "have nots" is growing wider and wider.

With globalization, technology and an ever-increasing push for shareholder profits, workers are being left behind. And so I see the problem.

And I do think that taxes need to go up, and like I said before, we're in the highest tax bracket...not by all that much, but we're there. So our taxes are going to go up, and I think that they should go up. Taxes are at historic lows....and so I don't get this constant chant for lower taxes when they've never been this low.

However, I don't see how the government is going to take that additional tax revenue and provide livable wages for the middle class. I mean, they can provide incentives to corporations to hire employees, but they can't dictate what they'll pay them. The corporations need to do that. They need to care. I know that some operate with that level of integrity, but increasingly, it seems like a thing of the past.

 

[Sparkly]

I think there's a very important life lesson to be learnt here: Never assume ANYTHING until you know them and their situation.

 

[Acklander]

First of all, I love that this thread is a really good discussion. If we're ever going to get anywhere in this country, we have to be able to listen to all viewpoints.

I know where you're coming from with respect to "livable wage". I just don't know how the government would accomplish that. Wages have absolutely been stagnant for the last decade for the middle class. It's a huge problem because the cost of everything is going up and wages just aren't keeping up. The gap between the "haves" and the "have nots" is growing wider and

past.

The government is VERY involved in how we do things. When they wanted to encourage home ownership, they created a tax deduction for mortgage interest. So homeowners get to write off a bulk of their housing expenses, but renters don't. When government wanted to encourage workers who make crappy wages to continue digging ditches instead of giving up and just collecting welfare they created the earned income credit for low wage earners. When the government wanted to encourage energy efficient they created tax credits for energy efficient purchases. I always hear people say that families should save and live within their means - the government feels differently - you pay taxes on interest income, but get to write off interest expenses.
Don't think the government is standing by, wringing their hands, hoping businesses do the right thing.
You see a lot of government subsidies for different industries. Got milk??? That entire ad campaign was paid for by us taxpayers. Instead of looking at a bunch of overpriced actors with a milk mustache I'd rather see an ad campaign listing which products were made in the USA.
If they were serious about bringing jobs back to the US, you would know it. Personally, I don't think it's right when a capitalist corporation (who historically is against communism) should be allowed to use communist labor just because it's cheaper. The reason why it's cheaper is they don't have to account for profits. I think if you added a tax onto items shipped in from overseas to account for the difference - you would find much more stuff being made here.

 

[nunzia]

I am really getting tired of people screaming at Tea Partiers (most of whom don't really even know what they are or were rallying about) all wanting small governemnt but sucking the system dry with SS and Medicaid and the Mililtary. Social Security is NOT an entitlement..it was a lame ponzi scheme 'retirement' plan put into effect by the gov't that you have no choice to participate in. People put money in and there was a contract they'd get something out..much like all those union forced pension plans that so many count on..same thing. The goverment made a deal that if they sucked all this money out of your checks for 30-40+ years, you'd get a check later on. It is not the 'contributors' fault that the whole thing is a deck of cards..but don't call it an entitlement when people pay into it. Same to a lesser degree with Medicaid..those items need to be seperated from the entitlement pile. Now yes, they do need to change drastically because they are unsustainable, but calling retirees getting SS checks entitlement hoggers is just wrong. If the governement wants to just pay out what we all put in..and heck, let local gov't and union jobs and PERA and others do that also, then I guess we can stop paying out SS.. The military is at least covered under the Constitution, of course it's pporly handled and too big in areas, but would you rather the gov't not pay for national defense and we just have little local militias? Everything needs to be cut..but just screaming at each other, trying to raise taxes (OK..lets take every dime from the rich folks and oh look,,not dent to the national debt), and yet not cut anywhere..just foolish and we will all pay for it at some point...soon.

 

[disneysteve]

I always hear people say that families should save and live within their means - the government feels differently - you pay taxes on interest income, but get to write off interest expenses.

I'm not sure what your point is here.

The fact that I pay taxes on interest income doesn't discourage me from saving.
The fact that I get a deduction on mortgage interest doesn't encourage me to borrow more.

1) The mortgage deduction is not much of an incentive. If I pay $1,000 in interest, I'll save $250 on my taxes. Big deal. It still costs me $750.

2) On the other hand, if I earn $1,000 in investment income, I'll pay $250 in taxes (or $150 if long term gains) but I'll get to keep $750 (or $850).

I'd much rather do #2 than #1.

And remember, credit card interest used to be deductible. The government eliminated that deduction so that did make a move to discourage people from taking on credit card debt - it just didn't work.

 

[ilovemk76]

I'm not sure what your point is here.

The fact that I pay taxes on interest income doesn't discourage me from saving.

I have heard many to most people comment how little they get in interest and then the government takes from that little bit of interest. You and others might not thing this way but my experience is that you are not the normal tax payer.



The fact that I get a deduction on mortgage interest doesn't encourage me to borrow more.

Have you not heard others say how interest on a mortgage is a tax write-off, so get the largest loan you can afford because it is a tax write-off? How about the comment, I will never pay-off my home, because I would lose my tax write-off?





1) The mortgage deduction is not much of an incentive. If I pay $1,000 in interest, I'll save $250 on my taxes. Big deal. It still costs me $750.

2) On the other hand, if I earn $1,000 in investment income, I'll pay $250 in taxes (or $150 if long term gains) but I'll get to keep $750 (or $850).

I'd much rather do #2 than #1.

And remember, credit card interest used to be deductible. The government eliminated that deduction so that did make a move to discourage people from taking on credit card debt - it just didn't work.

Sadly, most people do not understand finances, compounding interest and the like.

 

[disneysteve]

How about the comment, I will never pay-off my home, because I would lose my tax write-off?

Sadly, most people do not understand finances, compounding interest and the like.

You are absolutely correct that most people don't understand finances but I don't think it is fair to blame that on government policies. Yes there is a mortgage interest deduction but if people mistakenly think that's a great thing and a reason to borrow more and stretch out the repayments, that isn't Uncle Sam's fault.