[Joekerr]

Originally Posted by kscarrol

He means that while the "official" corporate tax rate was much higher, through various deductions the "effective" tax rate, what companies actually paid, was much lower....

Gotcha. I have no knowledge of the American tax system, so I'm curious. I've always thought of the effective tax rate when I think about a graduated system of tax. Maybe the US has that too corporately, not sure.

[MKSixer]

Originally Posted by TheAxiom

High in comparison to what? What was the actual effective rate?

Originally Posted by Joekerr

What do you mean re: bolded?

Originally Posted by kscarrol

He means that while the "official" corporate tax rate was much higher, through various deductions the "effective" tax rate, what companies actually paid, was much lower....

Originally Posted by Joekerr

Gotcha. I have no knowledge of the American tax system, so I'm curious. I've always thought of the effective tax rate when I think about a graduated system of tax. Maybe the US has that too corporately, not sure.

Here is a study listing the rates for the G20 and the OECD:

https://www.sbs.ox.ac.uk/sites/defau...ing-2016_0.pdf

Before the tax cut, we are consistently the worst from the statutory rate, the EATR, and EMTR both now and projected in 2020. This is good news for our country despite the spin others are putting on it for personal political purposes.

[Captain Blood]

https://www.wsj.com/articles/the-god...orm-1513812403

Jack Kemp, always one of my favorites, and a great guy to talk to.

[Scharbag]

Originally Posted by kscarrol

Without diving into the weeds, most folks in coastal states were happily voting for Hillary who was going to raise taxes on the "wealthy", and the most common number thrown around was income of $250,000 or more. I know that would likely change through the legislative process but they were going see a tax increase and were generally ok with that. Now in the new tax bill, many are seeing a tax increase but suddenly it's a problem.

Assuming normal other expenses of car notes etc, you need income north of $250,000 to afford a $500,000 mortgage. And I am talking the mortgage, not the value of the home, assuming some money is put down.

So bottom line is we can argue the merits of the tax cut and whether it is smart given the fiscal challenges the country faces but the folks complaining about increasing taxes under this bill were likely going to see higher taxes if Hillary had won... and supposedly they would have been OK with that.

You do not need $250k/yr to support a $500k mortgage. At current interest rates, that is ~11% debt service ratio. By that logic, people making $50k/yr can only affford a $100k house. Where I live, the average house price is ~$350k and $100k buys you a dump in the hood. I know for a fact the average household income is not $175k in this part of Canada.

Now I am not a proponent of maxing out your debt but unfortunately, not very many people will be able to keep their debt service ratio at 11%.

Cheers,

[gatorfast]

Originally Posted by jgoens

What kind of exotic tax situations do you speak of? I would like to implement whatever I can.

I just meant that you have the basic income source (W-2) and some investments which the average person has as well. Thus your 1040 is likely fairly simple and you take advantage of the basic deductions/credits such as child/dependent care, mortgage interest, etc. By exotic I meant things like K-1's, foreign investments/FBAR, subpart f income, etc. The wider your income net is cast the wider you need to search for applicable deductions.

[ASAP]

Originally Posted by Scharbag

You do not need $250k/yr to support a $500k mortgage. At current interest rates, that is ~11% debt service ratio. By that logic, people making $50k/yr can only affford a $100k house. Where I live, the average house price is ~$350k and $100k buys you a dump in the hood. I know for a fact the average household income is not $175k in this part of Canada.

Now I am not a proponent of maxing out your debt but unfortunately, not very many people will be able to keep their debt service ratio at 11%.

Cheers,

people making 50k a should absolutely nor buy above 150k...

the massive fallacy here is that everyone needs to own a house... if housing is above that, you either need to rent, move or get a better paying job... this is exactly how financial meltdows start

[KenB925]

Originally Posted by ASAP

people making 50k a should absolutely nor buy above 150k...

the massive fallacy here is that everyone needs to own a house... if housing is above that, you either need to rent, move or get a better paying job... this is exactly how financial meltdows start

wtf?

People making 50k should not buy a 150,000 car, but house?

a 120,000 mortgage is only about $600

[ASAP]

Originally Posted by KenB925

wtf?

People making 50k should not buy a 150,000 car, but house?

a 120,000 mortgage is only about $600

3x multiple of earnigs... i am ok w that but no more... anything can be financed over 30 years

[KenB925]

Originally Posted by ASAP

3x multiple of earnigs.

Its a nice dream, but not practical in reality, especially on the coasts.

[ASAP]

Originally Posted by KenB925

Its a nice dream, but not practical in reality, especially on the coasts.

a financially responsible person would move otherwise...

i read a stat that only about 9% of the san francisco population (household) makes over 100k... umm sorry, the other 91% must live in shelters imho

[KenB925]

Originally Posted by ASAP

a financially responsible person would move otherwise...

i read a stat that only about 9% of the san francisco population (household) makes over 100k... umm sorry, the other 91% must live in shelters imho

When I bought my house I really stretched to do it, but I made it work. I had a friend rent a room for a while.

Over the years I have been able to refi to lower my interest rate (not pull out equity), I also make quite a bit more, now I couldn't rent a studio apartment where I live for the amount I pay for my mortgage.

Like it or not, buying a house out here isn't just a 'housing expense' its an investment. Even if you never sell, you have locked in your monthly housing expense. Rents out here are absolutely nuts, I could rent my house out for WAY more then I pay every month.

[Scharbag]

Originally Posted by ASAP

people making 50k a should absolutely nor buy above 150k...

the massive fallacy here is that everyone needs to own a house... if housing is above that, you either need to rent, move or get a better paying job... this is exactly how financial meltdows start

3:1 mortgage to income is manageable but I agree, if you can, keep it as low as possible. Unfortunately, this is not always possible given the local housing/job environment.

As for renting, if house prices are high, likely rent will be high too. It is certainly an option, but in some areas, it is still quite a burden.

As for moving, this is not always an option. Might be you work in a local industry that does not exist elsewhere or you have other reasons to stay. Not always easy to uproot but I agree, if you cannot survive where you are, then you have to relocate. One caveat: most places with good jobs also have high house prices. Just the way it is.

And, as for getting a new job, that can be very difficult for some. This is where I am so very grateful that my parents helped me get an education as I can relocate across the country without much trouble. This is not always the case for all people.

[wdb]

Originally Posted by wdb

I work for Comcast. I'll let you know. And it's not a "telecom" ferchrissakes.

It's for real. BUT. Comcast gets a massive multi-year tax break and does a one-time PR gesture for its employees? Talk to me next year.

[are0lies]

Originally Posted by wdb

It's for real. BUT. Comcast gets a massive multi-year tax break and does a one-time PR gesture for its employees? Talk to me next year.

Did you answer your own post?

[F32Fleet]

Originally Posted by bimmer456

Be prepared to pay more tax with fewer deductions. If your mortgage is more than $500K you get no interest tax deduction beyond $500K. No property tax deduction beyond $10K. No tax deduction for HELOC interest. No tax deduction for second homes, investment properties, which can make or break whether you make any money. Tax breaks for the wealthy and corporations. Tax cuts for corporations are paid for by tax increases on the middle class.

WTF.. when did $500k mortgage qualify someone as middle class?

[F32Fleet]

Originally Posted by bimmer456

Even if your mortgage is paid off you won't be able to take the property tax deduction beyond $10k if you pay more than that.

So what. Is it the fault of the Federal govt that your state/local govt bends you over?

[dmatre]

Originally Posted by F32Fleet

WTF.. when did $500k mortgage qualify someone as middle class?

This was discussed on page 3.

[wdb]

Originally Posted by are0lies

Did you answer your own post?

Yes. If you read it you'll see why.

Originally Posted by F32Fleet

So what. Is it the fault of the Federal govt that your state/local govt bends you over?

Yes, if it is due to the Feds cutting costs by cutting payments to same.

Why am I explaining simple sh*t like this to a group of BMW owners?

[eluded]

Originally Posted by F32Fleet

WTF.. when did $500k mortgage qualify someone as middle class?

500k won't buy you a single family home in Santa Clara county, median $1.2x million

[F32Fleet]

Originally Posted by wdb

Yes. If you read it you'll see why.

Yes, if it is due to the Feds cutting costs by cutting payments to same.

Why am I explaining simple sh*t like this to a group of BMW owners?

what do you mean cutting costs? Do think there's a possibility that the reason why your local taxes are so high is because they were tax deductible? I'm actually thrilled that the deduction ended because public employee unions can no longer hold the citizenry hostage over an increase in pensions and benefits. Just waiting for the exodus from high tax states to begin in earnest.

[RickFLM4]

Originally Posted by wdb

Yes. If you read it you'll see why.

Yes, if it is due to the Feds cutting costs by cutting payments to same.

Why am I explaining simple sh*t like this to a group of BMW owners?

What Fed cost cutting is disproportionately affecting some states and not others, specifically?

[F32Fleet]

Originally Posted by eluded

500k won't buy you a single family home in Santa Clara county, median $1.2x million

Ya, Multiple reasons for that. Local planning won't allow high density development and stock options amount to "free money".