Another Month of Student Loan Relief!

[confettiflyer]

Regardless of politics, it is just a silly fantasy because it isn't going to happen.

But at least the student loan relief will happen (the extra month, that is)...wonder how long further it will run.

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Members don't see this ad.

 

[casprph]

I generally agree (though I actually think maybe tuition and loans also need to be capped), but I also suspect student loans are a big drag on our consumer economy.

If somebody’s loans get forgiven and I paid mine off myself, I’m not going to begrudge them their luck. Some of my coworkers are drowning. I’m happy they’ll hopefully get PSLF.

That’s a very nice way of looking at it. I am on the opposite side of the spectrum where by paying all my loans off and being responsible allowed me to be financially free but it came at the cost of vacations and a house. How would it be fair to cancel loans or forgive loans for those people that decided to spend their money and obtain the vacations, cars, house instead? They would luck out and I know life is not fair but that would definitely bother me.

 

[confettiflyer]

That’s a very nice way of looking at it. I am on the opposite side of the spectrum where by paying all my loans off and being responsible allowed me to be financially free but it came at the cost of vacations and a house. How would it be fair to cancel loans or forgive loans for those people that decided to spend their money and obtain the vacations, cars, house instead? They would luck out and I know life is not fair but that would definitely bother me.

I’m sure the senior citizens who were at end-of-life in poverty would have thought that social security wasn’t fair when it passed. If I suffered in poverty for decades, so should you!

Student loan forgiveness was public knowledge by 2008, so unless you obtained student loans prior to that date, failure to consider it would have been a grave strategic error, in hindsight. Even with older federal loans, consolidation into Direct was still possible.

Being debt free and asset/experience poor was a known outcome at the outset if you chose that path, those who gambled on an expansion of loan forgiveness terms traded away certainty for the chance at a higher net return. We paid the risk premium, and it’s time for the house to pay.

Never in my wildest dreams would I have ever thought we’d ever get terms like this. We don’t even need loan forgiveness, just indefinite deferral with payment credit renewed every 12 months.

 

[WVUPharm2007]

Maybe we can get the Navy Seals to fight student loan debt.

 

[radio frequency]

That’s a very nice way of looking at it. I am on the opposite side of the spectrum where by paying all my loans off and being responsible allowed me to be financially free but it came at the cost of vacations and a house. How would it be fair to cancel loans or forgive loans for those people that decided to spend their money and obtain the vacations, cars, house instead? They would luck out and I know life is not fair but that would definitely bother me.

That’s what I did too. But I also had more foresight than many of my classmates and was better educated in finance, so I was more cautious with undergrad loans as well, and graduated with lower loan amounts partially due to family help as well as working, etc.

I am not concerned with the fairness. Life isn’t fair. I’ve lived honestly and that’s enough for me. I don’t want to see others suffer just because they didn’t have the same knowledge or means as I did when choosing and going into their programs.

 

[radio frequency]

That’s what I did too. But I also had more foresight than many of my classmates and was better educated in finance, so I was more cautious with undergrad loans as well, and graduated with lower loan amounts partially due to family help as well as working, etc.

I am not concerned with the fairness. Life isn’t fair. I’ve lived honestly and that’s enough for me. I don’t want to see others suffer just because they didn’t have the same knowledge or means as I did when choosing and going into their programs.

It’s also possible that they did have insight, like confettiflyer. But I honestly think s/he is an anomaly based on my discussions with coworkers. They didn’t plan to end up in so much debt; they just didn’t know there may be alternatives.

 

[iamapharmacist]

Maybe we can get the Navy Seals to fight student loan debt.

Yeah! That's a fantastic idea! Maybe they can like shoot it or something. How cool!

 

[Sine Cura]

Ideally if they ever revisit these regs logically they will put in a cap on all student loan bailouts, incl PSLF as there are better ways to incentivize real public service rather than to allow highly compensated individuals working for DHMF and the like to get bailed out

i'm sure actually curbing student loan disbursements would be a bridge too far as debt slavery is beneficial to our capitalist regime

 

[confettiflyer]

Ideally if they ever revisit these regs logically they will put in a cap on all student loan bailouts, incl PSLF as there are better ways to incentivize real public service rather than to allow highly compensated individuals working for DHMF and the like to get bailed out

i'm sure actually curbing student loan disbursements would be a bridge too far as debt slavery is beneficial to our capitalist regime

I’m still amazed the Senate conferees did not object to the House conferees proposal to remove the cap.

Granted, that conference was give and take. The Senate wanted 25 years before forgiveness, the House wanted 20, and the resultant agreement was 25 years.

Specifically for PSLF, the House wanted “public sector*” workers with 10 years + forgiveness; the Senate wanted “public service**” and 1/10th forgiveness for each year where the borrower made less than $65,000/yr.

The resultant compromise was “public service,” all-or-nothing (no 1/10th) and no income cap.

Sen. Jeff Sessions was not a conferee, and he was the one concerned about an uncapped benefit when he spoke on the senate floor. Makes me wonder if he was, he would have objected...but we’ll never know.



Misc extra information that no one will find interesting
*In case anyone was curious, "public sector" was defined by the House as: "“(10) PUBLIC SECTOR EMPLOYEES.—An individual who is employed in public safety (including as a first responder, firefighter, police officer, or other law enforcement or public safety officer), emergency management (including as an emergency medical technician), public health, or public interest legal services (including prosecution or public defense or legal advocacy in low-income communities at a nonprofit organization)."

**The Senate described "public service" as:
`(C) Public service job.--In this paragraph, the
term `public service job' means--
``(i) a full-time job in public emergency
management, government, public safety, public
law enforcement, public health, public
education, public early childhood education,
public child care, social work in a public
child or family service agency, public services
for individuals with disabilities, public
services for the elderly, public interest legal
services (including prosecution or public
defense), public library sciences, public
school library sciences, or other public
school-based services; or
``(ii) teaching as a full-time faculty
member at a Tribal College or University as
defined in section 316(b).''.

 

[casprph]

I’m sure the senior citizens who were at end-of-life in poverty would have thought that social security wasn’t fair when it passed. If I suffered in poverty for decades, so should you!

Student loan forgiveness was public knowledge by 2008, so unless you obtained student loans prior to that date, failure to consider it would have been a grave strategic error, in hindsight. Even with older federal loans, consolidation into Direct was still possible.

Being debt free and asset/experience poor was a known outcome at the outset if you chose that path, those who gambled on an expansion of loan forgiveness terms traded away certainty for the chance at a higher net return. We paid the risk premium, and it’s time for the house to pay.

Never in my wildest dreams would I have ever thought we’d ever get terms like this. We don’t even need loan forgiveness, just indefinite deferral with payment credit renewed every 12 months.

Ultimately, we all took one gamble or the other so we will see what happens. I think it depends on a person’s risk tolerance. I was risk averse other than in my willingness to switch jobs 5 times in 7 years which helped me gain the experience to land one of the unicorn positions. It’s all perspective I suppose.

 

[confettiflyer]

Student loan moratorium to be extended to 9/30/2021 per report from Bloomberg.

Executive order expected today, will update details here once signed.

 

[Monsterdaddy]

HURRAY!!!! 19 months of PSLF zero payments!!!

 

[Gombrich12]

I think it will be Feb 2022 before people have to pay again. I feel sorry for the suckers that refinanced their federal loans. They basically lost out on a car

 

[confettiflyer]

Average pharmacist salary, that’s the equivalent of 19 payments x $1250/mo = $23,750.

Hot diggity.

This is pretty much a worst case scenario for anyone who privately refinanced their student loan in the 3 months leading up to the pandemic pauses...no joke. The sheer opportunity costs and that rip roaring stock market from the spring 2020 low means anyone who 1) paused payments and 2) dove in a little more (even conservatively) is going to be light years ahead at the end of this.

PSLF 10 year is looking more like 8 years at this point.

 

[ValeRx]

I refinanced years ago. Why are people who refinanced suckers? If you did it DURING the pandemic, sure you're a sucker.. but it's not like a global pandemic was ever within the realm of possibilities to stop you from cutting your interest in half.

 

[aqb]

I don’t think he’s saying you’re a sucker, just that those who did refinance right before the govt payment pauses were unfortunate in the timing of it all.

 

[owlegrad]

I don’t think he’s saying you’re a sucker, just that those who did refinance right before the govt payment pauses were unfortunate in the timing of it all.

Tomato, tomato.

Huh I guess that expression doesn’t really work online.

 

[JustFillIt]

Tomato, tomato.

Huh I guess that expression doesn’t really work online.

You need an “a” with a tilde

 

[Gombrich12]

I refinanced years ago. Why are people who refinanced suckers? If you did it DURING the pandemic, sure you're a sucker.. but it's not like a global pandemic was ever within the realm of possibilities to stop you from cutting your interest in half.

Because this was always going to happen pandemic or not. People who borrowed $300,000 to go to pharmacy school or $700,000 to go to dental school were never going to pay it back. The government was always going to have to step in to write off the debts in some way. The next thing that is going to blow your mind is basic income which should be here within the decade.

 

[confettiflyer]

I refinanced years ago. Why are people who refinanced suckers? If you did it DURING the pandemic, sure you're a sucker.. but it's not like a global pandemic was ever within the realm of possibilities to stop you from cutting your interest in half.

Reread my timeframe

 

[iamapharmacist]

Because this was always going to happen pandemic or not. People who borrowed $300,000 to go to pharmacy school or $700,000 to go to dental school were never going to pay it back. The government was always going to have to step in to write off the debts in some way. The next thing that is going to blow your mind is basic income which should be here within the decade.

My concern is the new executive order increasing minimum wage up to $15/hr... unemployment will skyrocket and may actually crash the economy. Meanwhile, pharmacist salary keeps on declining... lol what a world...

 

[ValeRx]

Reread my timeframe

Yours does have a time frame, I was specifically referring to Gombrich who said, "I feel sorry for the suckers that refinanced their federal loans."

 

[BidingMyTime]

You're probably going to have nutjob militias from Parler attempt to overthrow the government, too. So we got that to look forward to.

Dang you are prescient! People were laughing at your comment, but you totally called the reality of 2021.

 

[confettiflyer]

So strategy here for those on REPAYE or other IDR -- consider filing a 6 month extension on your income tax return and file it on October 15, 2021. In this way, when you recertify for IDR (presumably before October 15), the most up-to-date income pulled from the IRS system is your 2019 income (presumably that will be lower than your 2020 income, but I don't want to just assume that).

 

[WorthlessOxygen]

My concern is the new executive order increasing minimum wage up to $15/hr... unemployment will skyrocket and may actually crash the economy. Meanwhile, pharmacist salary keeps on declining... lol what a world...

Average employee productivity consistently increases, it's past time we saw income start to keep up

 

[JustFillIt]

So strategy here for those on REPAYE or other IDR -- consider filing a 6 month extension on your income tax return and file it on October 15, 2021. In this way, when you recertify for IDR (presumably before October 15), the most up-to-date income pulled from the IRS system is your 2019 income (presumably that will be lower than your 2020 income, but I don't want to just assume that).

I wonder - does this stimulus money count as income? I have a family of 7 and I’m the only worker in the family. And I certainly don’t make over 150k..

I received almost 10k it free money total

 

[WVUPharm2007]

I heard that thing is getting overrun with porno bots I’m expecting lads in leather chaps marching down Penn. Ave on January 20th

You were sorta close. Weird, vaguely tribal man with horned Davy Crocket hat is a hard one to pinpoint down to a "T".

 

[JustFillIt]

You were sorta close. Weird, vaguely tribal man with horned Davy Crocket hat is a hard one to pinpoint down to a "T".

What exactly is a porno bot and how what would it do to a picture like this?

The last time I viewed porno it was in the form of a magazine in my friends dads foot locker and, “the reading” was the most important part of the magazine.

I think it’s changed a lot since then...

 

[confettiflyer]

I wonder - does this stimulus money count as income? I have a family of 7 and I’m the only worker in the family. And I certainly don’t make over 150k..

I received almost 10k it free money total

The deferred payments aren't really stimulus, and aren't really income, so short answer is no, it doesn't count as income.

Long answer = it *theoretically* increases the amount you are eventually forgiven. Under current law, if you're on the standard 20 or 25 year forgiveness, forgiven student loans are taxed as income via 1099-C. Therefore, the higher amount forgiven results in a higher tax. Whether or not that will actually happen (aka tax bomb) is debatable.

If you're going for forgiveness under PSLF, that's a definite no on the tax bomb.

EDIT: oh you might actually be referring to actual stimulus (the $1200/$600 checks). I have no idea if they're taxed or not, I don't think they are. Check with someone else.

 

[iamapharmacist]

Average employee productivity consistently increases, it's past time we saw income start to keep up

What is this based on? I'm sure productivity of flipping a burger has not changed since creation of burgers. If I, as the owner of a burger joint, have to now pay my burger flipper $15/hr instead of $7.25/hr, even though he flips burger at the same rate as he was yesterday, where am I getting extra $7.75/hr from? Unemployment will skyrocket since many burger joint owners will have to lay off burger flippers. If my budget was $29/hr, 4 burger flippers, now I barely have enough for two burger flippers. These two burger flippers would have to work extra hard to make up for the difference and other two now do not have jobs. If minimum wage increase does happen, I would say productivity along with job security will plummet like hunter biden's reputation and future. Doubling the minimum wage is economic suicide.

 

[Sine Cura]

What is this based on? I'm sure productivity of flipping a burger has not changed since creation of burgers. If I, as the owner of a burger joint, have to now pay my burger flipper $15/hr instead of $7.25/hr, even though he flips burger at the same rate as he was yesterday, where am I getting extra $7.75/hr from? Unemployment will skyrocket since many burger joint owners will have to lay off burger flippers. If my budget was $29/hr, 4 burger flippers, now I barely have enough for two burger flippers. These two burger flippers would have to work extra hard to make up for the difference and other two now do not have jobs. If minimum wage increase does happen, I would say productivity along with job security will plummet like hunter biden's reputation and future. Doubling the minimum wage is economic suicide.

In-N-Out pays over minimum wage
Chik-Fil-A starts a $17/hr in my area.

California min wage is $14/hr now. These chains aren't going out of business

Australia has a higher min wage and they do not seem to be plagued with mass unemployment, and they do not seem to suffer the degeneracy the U.S. is plagued with.

 

[BidingMyTime]

You were sorta close. Weird, vaguely tribal man with horned Davy Crocket hat is a hard one to pinpoint down to a "T".

I'm sure the vaguely tribal guy perfectly fills someone's fetish, so I would count him as a porno guy.

What is this based on? I'm sure productivity of flipping a burger has not changed since creation of burgers. If I, as the owner of a burger joint, have to now pay my burger flipper $15/hr instead of $7.25/hr, even though he flips burger at the same rate as he was yesterday, where am I getting extra $7.75/hr from? Unemployment will skyrocket since many burger joint owners will have to lay off burger flippers. If my budget was $29/hr, 4 burger flippers, now I barely have enough for two burger flippers. These two burger flippers would have to work extra hard to make up for the difference and other two now do not have jobs. If minimum wage increase does happen, I would say productivity along with job security will plummet like hunter biden's reputation and future. Doubling the minimum wage is economic suicide.

Well, on-average, employee production has greatly increased due to computers and automation. With burger flippers, I don't know....do the oven's come with autotimer's and autooff's now so the burger flipper guy can be doing something else until the timer goes off? Certainly with the cashiers, automation is greatly increased, since 1 button can be pushed for each item (instead of the cost for each item having to be keyed in individually), and the change is automatically figured, it doesn't have to be done manually. Regardless of how menial you think a job it, I feel certain that there is probably automation somewhere along the line that has increased the productivity of the job.

 

[iamapharmacist]

In-N-Out pays over minimum wage
Chik-Fil-A starts a $17/hr in my area.

California min wage is $14/hr now. These chains aren't going out of business

Australia has a higher min wage and they do not seem to be plagued with mass unemployment, and they do not seem to suffer the degeneracy the U.S. is plagued with.

This isnt really about how you feel about minimum wage.

Its economy101. Ask any economist or anyone who studied economy. Increasing minimum wage to double what it is now is really really bad.

You gave great examples. Yes, in n out and starbucks pay higher than minimum wage starting pay. Which means that theyre valuing their employees high than those who pay minimum wage. Which is also why their coffee and burgers are more expansive than others but it works for them because people are willing to pay for their goods and service. But think about minimum wage going up to $15/hr. Wouldnt you think those who were getting paid $16/hr working at n in out want a raise?

Those companies pay higher wages because they chose to do that, not by force. They know by paying higher wages, they could potentially get better people. Now, if youre forced to pay everyone $15/hr as a minimum pay, you would have to pay someone $25/hr to get the same type of “better” workers.

Let me dumb it down even further. Are you willing to pay a tech in training who has zero experience $20/hr?

Here is a good article to read.

The Unintended Consequences Of Raising Minimum Wage To $15

Raising the minimum wage has a number of serious and negative unintended consequences.

www.google.com

 

[iamapharmacist]

In-N-Out pays over minimum wage
Chik-Fil-A starts a $17/hr in my area.

California min wage is $14/hr now. These chains aren't going out of business

Australia has a higher min wage and they do not seem to be plagued with mass unemployment, and they do not seem to suffer the degeneracy the U.S. is plagued with.

Also, forgot to mention, look at California’s economy. Some are predicting for the entire state to go bankrupt in a few years. Cost of living is so high they barely have any middle class left. California is a good example of what you shouldnt do. Look at Texas. We still have minimum wage at $7.25 yet it an economic powerhouse. More people and big companies are moving in. One of the few states that werent affected economically by lockdowns.

 

[Sine Cura]

Good retail techs prob should be paid $20 or more in California because there are more interactions with degenerates than at a Chik Fil A that offers $17/hr and has more staffing that any retail pharmacy (average Chik Fil A revenue prob similar to a garden-variety chain pharmacy but the net operating income much better prob)

Also Kaiser pays techs much better than retail pharmacies so that draws good potential workers and leaves the marginals for everyone else

As for singling out California, this whole country is going down in flames so saying Texas is doing all right economically is like saying it's burning at a lesser rate

 

[iamapharmacist]

Good retail techs prob should be paid $20 or more in California because there are more interactions with degenerates than at a Chik Fil A that offers $17/hr and has more staffing that any retail pharmacy (average Chik Fil A revenue prob similar to a garden-variety chain pharmacy but the net operating income much better prob)

Also Kaiser pays techs much better than retail pharmacies so that draws good potential workers and leaves the marginals for everyone else

As for singling out California, this whole country is going down in flames so saying Texas is doing all right economically is like saying it's burning at a lesser rate

Again, regardless of how you feel about minimum wage or singling out those few companies that pay higher wages, does not change the fact that increasing minimum wage to $15/hr will crash the economy. This is same thing as hiking the inflation rate to 10% each year. The federal reserve purposely control slow inflation rate increase. Same concept should be applied for the minimum wage. Did you even read the article i posted?

 

[Sine Cura]

So are you more concerned about the rate of increase of the wage floor or the mere increase of the wage floor?

Increased worker productivity has not led to a commensurate increase in real wages.

Personally I don't care because I'm not a profligate spender and will do as little as possible to engage in this consumer-***** carnival

 

[iamapharmacist]

So are you more concerned about the rate of increase of the wage floor or the mere increase of the wage floor?

Increased worker productivity has not led to a commensurate increase in real wages.

Personally I don't care because I'm not a profligate spender and will do as little as possible to engage in this consumer-***** carnival

It really doesnt matter what i am concerned about since facts dont care about my feelings. Lol. Thats a Ben Shapiro joke.

The problem would be the rate of increase in wage. Minimum wage has steadily increased throughout modern history but never doubled at any given moment. It needs to mirror growth of economy and inflation.

 

[CocoMelon0531]

Again, regardless of how you feel about minimum wage or singling out those few companies that pay higher wages, does not change the fact that increasing minimum wage to $15/hr will crash the economy. This is same thing as hiking the inflation rate to 10% each year. The federal reserve purposely control slow inflation rate increase. Same concept should be applied for the minimum wage. Did you even read the article i posted?

There will come a point when investing in robotic tech for flipping burgers will be equivalent or cheaper than hiring labor. Investing time we are living in.

 

[iamapharmacist]

There will come a point when investing in robotic tech for flipping burgers will be equivalent or cheaper than hiring labor. Investing time we are living in.

Yes yes. Boston Dynamics already made a terminator so im sure automation of most low level jobs will be inevitable at some point but we are not there yet. Nor does the economy actually follow technology. We cant live the presence in hope of what you wish to happen in the future. Right now, there are still people earning money as a casher at a gas station. Their lives are just as important as yours. Be considerate and understand how free market economy works.

 

[iamapharmacist]

Going back to original point, what to do with loan payments I wont be making until September... any thoughts? Just invest?

 

[ValeRx]

Also, forgot to mention, look at California’s economy. Some are predicting for the entire state to go bankrupt in a few years. Cost of living is so high they barely have any middle class left. California is a good example of what you shouldnt do. Look at Texas. We still have minimum wage at $7.25 yet it an economic powerhouse. More people and big companies are moving in. One of the few states that werent affected economically by lockdowns.

Texas also has no state income tax, which is very lucrative for a lot of people. Although with all the Democrats bailing on California, they're bringing their liberal political agenda with them and will start voting that way. In a few years, Texas will turn blue and they will destroy that state economy, not having learned from their massive socialist policies and how they fail.

 

[Sine Cura]

It really doesnt matter what i am concerned about since facts dont care about my feelings. Lol. Thats a Ben Shapiro joke.

The problem would be the rate of increase in wage. Minimum wage has steadily increased throughout modern history but never doubled at any given moment. It needs to mirror growth of economy and inflation.

Is this whole referring to your feelings some weird argumentation tic to claim objectivity? Of course we have "feelings" on a topic we care to respond to

Min wage issues are effectively a states rights issue as many states have gone over 7.25

 

[iamapharmacist]

Texas also has no state income tax, which is very lucrative for a lot of people. Although with all the Democrats bailing on California, they're bringing their liberal political agenda with them and will start voting that way. In a few years, Texas will turn blue and they will destroy that state economy, not having learned from their massive socialist policies and how they fail.

Some are worries that this may happen. Kidna already happening in Austin but Austin’s always been a weird place lol

 

[ValeRx]

Some are worries that this may happen. Kidna already happening in Austin but Austin’s always been a weird place lol

I've heard from several friends that are Texas natives that Austin has always been a liberal haven in a vastly Republican state.

 

[confettiflyer]

Going back to original point, what to do with loan payments I wont be making until September... any thoughts? Just invest?

I upgraded a bunch of AV equipment in my house, figured if I’m not going to the theaters anytime soon, I should have a kick ass set up at home.

 

[BidingMyTime]

Texas also has no state income tax, which is very lucrative for a lot of people. Although with all the Democrats bailing on California, they're bringing their liberal political agenda with them and will start voting that way. In a few years, Texas will turn blue and they will destroy that state economy, not having learned from their massive socialist policies and how they fail.

I'm a Libertarian, so I'm not a fan of socialist policies....but it's not that simple as saying blue states "socialist" policies cause all the problems. One reason red states can have low state taxes, because of the massive welfare funds they get from the federal governments....which the federal government gets from the taxes paid by blue states. Blue states pay more in federal taxes than they get back in welfare, while red states pay far less.

Red states are very happy to take federal money for their needs, which whatever they want to call it, they are getting that federal money only because of socialist federal policies that take from the blue states. At least blue states are honest about wanting socialist policies, red states are hypocritical decrying socialist policies at the same time their states are benefiting most from them.

 

[Seriously Serious]

I'm a Libertarian, so I'm not a fan of socialist policies....but it's not that simple as saying blue states "socialist" policies cause all the problems. One reason red states can have low state taxes, because of the massive welfare funds they get from the federal governments....which the federal government gets from the taxes paid by blue states. Blue states pay more in federal taxes than they get back in welfare, while red states pay far less.

Red states are very happy to take federal money for their needs, which whatever they want to call it, they are getting that federal money only because of socialist federal policies that take from the blue states. At least blue states are honest about wanting socialist policies, red states are hypocritical decrying socialist policies at the same time their states are benefiting most from them.

False. We have outrageous property taxes to compensate (Texas).

 

[confettiflyer]

False. We have outrageous property taxes to compensate (Texas).

View attachment 328161View attachment 328162

Texas doesn’t even have legal caps on property tax, yes?

That’s one of the pros living in CA, the tax revolt in the 70s created some of the most favorable property tax rates in the nation. That’s why income tax appears to be so high (to compensate). The problem is the disparate nature of taxation here.

So if you’re a newcomer making median income trying to buy a home, or an out of state retiree trying to move here...it’s basically impossible.

But if you make median income and are inheriting a home from parents under favorable property tax terms, even if that house still has a sizable mortgage on it, you’re pretty much set for life...and your kids can inherit that tax base as well.

As a retiree under that favorable tax provision, you now have to weigh the income taxes paid vs potential costs of living in TX or NV, and the answer isn’t as obvious. For those interested, many convert their old homes to rental properties that keep that tax base. There were attempts to close this part of the law in 2020, but it’s still possible to do so.

(but it’s easier to say “CA taxes are high” than actually explain the disparate nature of our tax system)

 

[Seriously Serious]

Texas doesn’t even have legal caps on property tax, yes?

That’s one of the pros living in CA, the tax revolt in the 70s created some of the most favorable property tax rates in the nation. That’s why income tax appears to be so high (to compensate). The problem is the disparate nature of taxation here.

So if you’re a newcomer making median income trying to buy a home, or an out of state retiree trying to move here...it’s basically impossible.

But if you make median income and are inheriting a home from parents under favorable property tax terms, even if that house still has a sizable mortgage on it, you’re pretty much set for life...and your kids can inherit that tax base as well.

As a retiree under that favorable tax provision, you now have to weigh the income taxes paid vs potential costs of living in TX or NV, and the answer isn’t as obvious. For those interested, many convert their old homes to rental properties that keep that tax base. There were attempts to close this part of the law in 2020, but it’s still possible to do so.

(but it’s easier to say “CA taxes are high” than actually explain the disparate nature of our tax system)

True, but there is freedom in not having income tax (I can weigh the pros/cons of property tax when I purchase a home). Moreover, the cost of living is much lower (for now).

I feel like there are more people flocking to CA than are people inheriting homes from their family.