Finally making an adult living

[conky124]

From Warren Proposal: A 40% “exit tax” on the net worth above $50 million of any U.S. citizen who renounces their citizenship; and systematic third-party reporting that builds on existing tax information exchange agreements adopted after the Foreign Account Tax Compliance Act.



I can see why @conky124 bailed out of the conversation.

...yeah just as the "fair share of taxes" was a give away about my position to @Paired Associate his use of "class warfare" was a clear signal to me we weren't gonna see eye to eye. Been down that road too many times, lots of straw men left dead and bloody along the way.

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[WisNeuro]

Working in geriatrics and in personal experience, many widows/widowers try to downsize after a spouse dies. 250K in exemption is nothing if you live in the Northeast or CA and that home is a sizable chunk of your retirement nest egg.

Also, people are aware that the taxation is only on the gains you made on sell price above what you bought it for, right? So, essentially, you need to sell your house for more than 250k than you bought it for as a single taxpayer, to have to pay taxes on a portion of it.

 

[Sanman]

exemption currently on 250k is $37,500, if that's nothing to someone, it would seem a slightly higher tax wouldn't be an impediment After that you can roll the cost basis, seller costs, transaction fees, and a host of other things on to the exemption. I'd still argue that this doesn't really hit many in the lower and middle class range.

That may be true for the midwest, but not the coasts. I'll use a common example of where I grew up on long island. A middle class home there bought 40 years ago was about $150k. Prices for a 2000 sqft home are now around $750k where I grew up. With the $250k exemption, that means a widow/widower looking to relocate to say Florida or downsize will pay taxes on $500k. For most of the middle class people I know (read: never made $100k salary) this is the bulk of their retirement savings plus a few hundred thousand in 401k. $70k in taxes is two years of living expenses.

 

[WisNeuro]

That may be true for the midwest, but not the coasts. I'll use a common example of where I grew up on long island. A middle class home there bought 40 years ago was about $150k. Prices for a 2000 sqft home are now around $750k where I grew up. With the $250k exemption, that means a widow/widower looking to relocate to say Florida or downsize will pay taxes on $500k. For most of the middle class people I know (read: never made $100k salary) this is the bulk of their retirement savings plus a few hundred thousand in 401k. $70k in taxes is two years of living expenses.

750 - 150k = 600k. Deduct 250k exemption (likely more because you can write off improvements and a load of other things), they pay taxes on a max of 350k of this.

 

[Sanman]

750 - 150k = 600k. Deduct 250k exemption (likely more because you can write off improvements and a load of other things), they pay taxes on a max of 350k of this.

Yes with capital improvements of 100k plus 250k exemption, you are paying capital gains on about 250k. My point that if you jack up the capital gains tax, that is still significant for some people still stands. That is an extra year of retirement savings. It also prohibits people from selling and moving to smaller houses in the NY area because capital gains + fees on the selling and buying mean that the housing stock doesn't turn over. More capital gain will make that problem worse.

 

[WisNeuro]

Yes with capital improvements of 100k plus 250k exemption, you are paying capital gains on about 250k. My point that if you jack up the capital gains tax, that is still significant for some people still stands. That is an extra year of retirement savings. It also prohibits people from selling and moving to smaller houses in the NY area because capital gains + fees on the selling and buying mean that the housing stock doesn't turn over. More capital gain will make that problem worse.

Seller fees are deductible in the capital gains equation, so those should not factor in. Bottom line, this would not affect the vast majority of people in an appreciable way. I doubt this would have any impact on the housing market above and beyond other, more important factors.

 

[conky124]

@Paired Associate consider that straw man dead!

 

[WisNeuro]

but it will affect cash poor people who their primary residence is their biggest asset. That’s not an insignificant number of people, in my opinion.

I concur with Sanman’s position on this. Id further assert that those coastal people are being penalized for inflation in that calculation. 150k in 1980 is a big number today, ~500,000.

I already conceded that I would be ok with an inflationary adjustment, which would eliminate this tax for pretty much most people in the bottom 90% net worth brackets.

 

[Therapist4Chnge]

Simplifying the tax code is likely the best way to do it, but that would piss off too many ultra-rich who hide behind tax loopholes you can drive an 18-wheeler through. Warren's proposal(s) have been pretty reasonable compared to a lot of other countries.

 

[borne_before]

Maybe we reduce spending on some things before raising taxes?

 

[WisNeuro]

If a balanced budget is on tap, you would presumably need to do both, especially considering the huge drop in revenue following the last round of tax cuts.

 

[Therapist4Chnge]

Maybe we reduce spending on some things before raising taxes?

I'm totally game for that! Let's start w 30-40% cut in military spending & removing all pork projects that are unrelated to the legislation being proposed. Then we can circle back around to corp taxes and bring them back up to Reagan era rates. Win/Win!

 

[beginner2011]

I'm totally game for that! Let's start w 30-40% cut in military spending & removing all pork projects that are unrelated to the legislation being proposed. Then we can circle back around to corp taxes and bring them back up to Reagan era rates. Win/Win!

Sounds great! Although, typically people who advocate for small government and a balanced budget really just want to cut social programs and aren't interested in small government or a balanced budget as ends in themselves. Maybe @borne_before will prove me wrong, though.

 

[chicandtoughness]

You're collecting a flat fee, but you're also billing insurance? I'm confused, I think. (Also, probably just naive.)

No, insurance doesn't get billed. I'm just collecting the fee directly from the patient, but the percentage is based on what I would have billed insurance if they had shown up. Does that make sense?

 

[WinterMountain91]

Hey all it's possible! I'm 1 year post licensure, 2 years post graduation. Have my own private practice and do contract work with another clinic...both jobs finally took off and i'm making more than I ever imagined doing what I love! Don't give up hope It's crazy to go from making 35k at postdoc (and even less years prior during practica) to >150k.

Wow congrats! This gives me great hope that I won't have to live on beans and rice after having spent so much time and money in school. I'm curious, do you specialize in a specific line of clinical work? Do you focus primarily on therapy/treatment or do you also provide assessment services?

 

[FreudianSlippers]

Wow congrats! This gives me great hope that I won't have to live on beans and rice after having spent so much time and money in school. I'm curious, do you specialize in a specific line of clinical work? Do you focus primarily on therapy/treatment or do you also provide assessment services?

Thanks! I don't do any assessments atm...though I was trained pretty heavily in them. I do purely therapy/treatment right now. I do have a pretty niche specialization in my clinical work, and have done A LOT of networking over the past year. I've gotten to know many of the other providers in my area and have a solid community of like-minded therapists, which is awesome.