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Participant[quote=wallers]I am wondering who the buyers are as well. If someone here makes an above average living (for here) but still has to stretch to afford an average or less than average small home (with the last few years increase) it makes me wonder what is going on and if a price correction will be coming. Looking at incomes and housing prices it does not pencil out unless it’s all driven by outside investors. Who will come and go but when they go prices go down. From what I see it is cheaper to rent than buy now (much cheaper) so that seems off as well.[/quote]I think it’s more important to compare mortgage vs rent instead of mortgage vs income. Rent tells you how much people in a particular area are will to pay for shelter. So, if you want to live in that particular area, you have to compete with other people in your area. There are a myriad of reasons why people are will to spend different amount for shelter and people in different areas spend differently.
The reason I like using rent as a barometer is because people don’t put an ownership premium on rent. So, you tend to get a more pure view on how much people in the area are will to spend for shelter. If your mortgage is less than rent, then I would say, go ahead and buy, especially if you’re intending this to be your forever home. Worse comes to worse and you have to move, you can always rent it out for more than your mortgage.
Participant[quote=joec][quote=AN]Fyi, I’m not worried, since I’m diversified in all tax benefit accounts. I was just opening up a discussion about it. If talking about what if isn’t your cup of tea, feel free to ignore the thread.[/quote]
You just came off to me as all irate and freaked out about it…People kept posting this won’t past anyways with a republican congress so what’s the worry?
Discussion is fine, just the endless what IF, this That, ETC…on and on, etc…sounded like more freaked and worried to me.
Good you’re diversified, you don’t need to worry really…honestly…of any of this crap.[/quote]again, I’m not worried at all. Its actually fun for me to talk about what if. You might think I’m freaking out, but in reality, I’m not. I know it won’t pass now with the Republican congress. But its good to see where the president want to get more revenue for his spending.
ParticipantFyi, I’m not worried, since I’m diversified in all tax benefit accounts. I was just opening up a discussion about it. If talking about what if isn’t your cup of tea, feel free to ignore the thread.
Participant[quote=joec]One thing people also hasn’t mentioned here is even if this ever got in and that’s an impossible “IF” (note all the “if this…it that happens in CA comments …it’s simply not going to happen), it can also get repealed and CHANGED AGAIN. You get all the money they taxed, etc…back after republicans take back both houses and the presidency and repeal this.[/quote]That in itself is an if. Since I started this thread talking about the future. Of course it’s all about ifs. What do you expect it to be when we’re talking about the future? My crystal ball is broken, so I have to use if. Is your crystal ball working?
[quote=brg654]i use a 529 purely as a tax shelter right now[/quote]Agree, 529 is a tax shelter. Same as 401k, 403b, IRA, etc. That’s exactly what I’m saying.
ParticipantLike I said, we’ll just have to wait and see. I would never have thought SCA-5 would be proposed much less got extremely near passing by democrats, the party that’s supposed to be defending the minorities. But it did. So, I’m not ruling anything out.
Participant[quote=SK in CV]When in the state of California has a super-majority of either party has passed a retroactive tax increase? (Please note, your previous example of Proposition 30 doesn’t qualify.) [/quote]Because they were too busy trying to pass shit like SCA-5. Luckily, they didn’t have super-majority for long. But I expect it to happen again.
[quote=SK in CV]It’s not likely it will happen. For one, there hasn’t been a super-majority in congress for decades. The likelihood of it happening any time in the next couple decades is slim. And second, I can’t recall a retroactive tax increase being suggested in the last 40 years. (It did happen once. During either late in the Reagan administration or early Bush I administration. Congress quickly fixed it.) If it’s ever happened at the federal level and stuck. Creating precedent like that is almost impossible without a super-majority.
Beyond that, nobody is even suggesting removing the current tax benefits of deferred taxes for things like 401Ks, Roths or IRA, much less the future benefits of those accounts. Nothing like that has ever happened before.[/quote]Just because it didn’t happen before doesn’t mean it can’t happen in the future. If a charismatic president who want to increase SS benefits and pay for it by completely eliminating 401k/IRA retroactively. I can see that gaining populous support. Especially if they can frame it as helping the poor and middle class by increasing SS by making the rich pay a little more, by just removing tax break that rich people don’t need. I see that as a very possible scenario. We’ll just have to wait and see.
Participant[quote=FlyerInHi]If, if, if…. so you don’t do anything only if?
Nothing is 100% ironclad. Same thing buying a house or getting married. People may lose big time getting married, but they still do it.[/quote]What’s your point exactly? Who ever said anything about 100% ironclad? I hope you know you’re arguing my point. Your initial statement of it not likely to happen is closer to 100% ironclad than my argument that there’s a likelihood that it will happen.
Participant[quote=FlyerInHi]So what if certain things pass eventually? Even if it does and you invested in the plan, you still had some tax benefits for some time.
I believe the point flu and livin’ were making was that there are certain things you can’t rely on.
Think of it this way: “it was good while it lasted.”[/quote]It would only be “good while it lasted” if they didn’t make it retroactive and if you’ve already taken some money out. If they make it retroactive and you haven’t taken money out yet, then there is no tax benefit.
Participant[quote=FlyerInHi]Anything can happen. But you plan based on likelihood. Same with buying a house, getting married, etc…[/quote]I wasn’t talking about planning. If you’re talking about planning, then I would say diversify your tax accounts just like you diversify your investment. Anything could happen between now and when you retire/die, so why put all your egg in one basket. But planning wasn’t even a topic of discussion.
As I stated, if this was proposed now, then there is a likelihood it will be proposed again, until it passes. If this passes, then there’s a likely hood the same can happen to Roth IRA/401k. After, it’s just a minor incremental change relatively. The people who invest in 529 are also the people who invest in Roth. Democrat obviously have no issue with attacking this group of people now, so it’s reasonable to assume they’ll do it again in the future.
Participant[quote=FlyerInHi]AN, you can call it whatever you want.
But it’s not like rules change overnight that you can’t plan.
Life is fluid and estate planning is a continuous process mostly because changing personal circumstances. Nothing to get riled up about.
On Obama Care, it depend what your view is. Considering that universal health care is taken for granted in the developed world, the US was bound to implement something sooner or later. In that context, Obama Care is just a patch to the old system.[/quote]I never said rules doesn’t change. In fact, that’s exactly what I said. It’s within the realm of possibility that we can get “Roth” tax free gain rule be changed retroactively. I pointed out that when you have Democrat super majority in both chamber and the presidency, it’s likely that it will happen.
If you call Obamacare a patch and incremental, then the change in Roth rules would be an even more minor patch and there’s no point in arguing that it can’t happen.
Participant[quote=FlyerInHi]Because Federal law is for the whole country and a lot more consistent.
State and local laws are more on the local level for good reasons — the very reason we have a Federal system, so that new ways of doing things can be first tested at the local level.
The introduction of the Federal income tax to pay for WWI was a “game changer”. Then we had the New Deal. But since then, Federal policy has been incremental, often to lower taxes, not increase them.[/quote]It’s only consistent because of divided government, not because it’s federal vs state. Again, if Democrats have super majority in both chambers and presidency, what make you think they don’t vote and behave exactly like CA? Same can be said if Republican have total control. Just because there have been divided government in the past does not guarantee you a divided government in the future.
As for incremental, if a change only affect a small % of people, and if those people are considered rich, then it would be considered incremental for those who are not affected by the change. It’s only a big deal if it affects the majority. BTW, I think Obamacare wasn’t incremental. It was a pretty big change.
Participant[quote=jeff303][quote=AN]Why the distinction? If democrats have super majority in both house and senate and the presidency, what make you think it’ll be anything different than CA?[/quote]
Because no concrete proposal exists to retroactively nerf Roth IRAs or 401ks, only politically motivation supposition and innuendo? Because doing so would be massively unpopular across the spectrum and would amount to political suicide?[/quote]I’m not talking about this proposal. Again, why the distinction between federal tax law vs CA tax law? Why is it any different? If Democrats have super majority in both chambers and the presidency, why would it be any different between federal vs CA?
Participant[quote=SK in CV][quote=flu][quote=SK in CV] There has almost never been an unfair retroactive change to federal tax law. With extraordinarily minor exceptions, changes have been prospective only.[/quote]
Uh?
California Proposition 30 came pretty close, right?[/quote]
See bolded words.[/quote]
Why the distinction? If democrats have super majority in both house and senate and the presidency, what make you think it’ll be anything different than CA?Participant[quote=flu][quote=AN][quote=flu]Everytime I hear the word “free”… I’ve been accustomed to thinking “ok now, how much is this going to cost me…”
Lol[/quote]That’s the price of being rich :-)[/quote]
Is that Obama “rich” or “rich rich”?
(couldn’t resist)[/quote]
Same as lavish, rich only have one definition. -
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