Hi, I´m lazyboy long time reader I´m going to write some introduction later. First I got some question to you all, especially to the one already or short before retirement.
How do you prepare for crazy taxe raises. For example this year my city desided they find it some good idea to raise property tax by 10%. First they planned to raise them by 20%.
Even worse, we´ve got taxes on dogs and they raised it by 83% (no, thats no joke)!!
Please, excuse my english I´m not a native speaker.
crazy taxes
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BeyondtheWrap
- Posts: 598
- Joined: Thu Jul 22, 2010 3:38 pm
- Location: NYC
Thanks for the responses.
@ beyond the wrap: I´ve been out of regular work now for some years and all I could say is this, the longer you are out the harder it is to get a job even at burger king, at least in Germany.
@sky and Ego: an RV maybe some solution, but a boat is much more expansive than an apartment here.
And sorry but to tell someone with a dog he shouldn`t buy it at first is like telling someone with kids to not make some at all.
@ALL: Maybe they decide tomorrow to taxe shoes or birds whatever they are real crazy here about designing new taxes.
My question is more like how do I calculate crazy politions into my retirement savingplans.
@ beyond the wrap: I´ve been out of regular work now for some years and all I could say is this, the longer you are out the harder it is to get a job even at burger king, at least in Germany.
@sky and Ego: an RV maybe some solution, but a boat is much more expansive than an apartment here.
And sorry but to tell someone with a dog he shouldn`t buy it at first is like telling someone with kids to not make some at all.
@ALL: Maybe they decide tomorrow to taxe shoes or birds whatever they are real crazy here about designing new taxes.
My question is more like how do I calculate crazy politions into my retirement savingplans.
That is difficult to answer because it appears we are about to experience a very strange time in history. The first reaction is to have a reserve of income that you do not use.
Other ideas: Produce or build your own products (food, clothing, furniture) that you normally would buy, thereby avoiding Value Added Tax. Trade with others with no cash exchange rather than using currency and don't tell the government. Look for things that are being disposed of to use and for materials to build things. Do not purchase vehicle fuel: walk, use transit or bicycle.
Other ideas: Produce or build your own products (food, clothing, furniture) that you normally would buy, thereby avoiding Value Added Tax. Trade with others with no cash exchange rather than using currency and don't tell the government. Look for things that are being disposed of to use and for materials to build things. Do not purchase vehicle fuel: walk, use transit or bicycle.
I don't think there is any certain way to account for rising taxes in your retirement savings calculations, other than just guessing. No one here (or anywhere) knows how much the taxes will change over the years. How much do you think taxes might go up? Do you think they will start taxing things like wealth (your savings) that might cause a big hit for you?
Consider a number of different scenarios ranging from taxes staying exactly as they are now, up to very high taxes or even confiscation of your savings. Think through / calculate what you would do in each of these cases. At what point would you lie to avoid taxes? At what point would you hide your wealth (possibly by storing it in banks at countries like Switzerland or the Caribian). At what point would you leave the country to live somewhere without the taxes? At what point would you tell the government that you don't have a dog anymore? After thinking through these scenarios, you might decide to make some changes now. Likely, most of the changes you'd have to make wouldn't need to occur until the tax changes happen. Remember that government is big and slow and clumsy. The tax changes nearly always will not affect you immediately - you'll have some time to decide and execute your course of action.
It might help or comfort you a little bit to take a look at what taxes have been like historically in Germany. I'd guess there have been times where taxes were higher/going up, and there have been times where taxes were lower/going down.
Consider a number of different scenarios ranging from taxes staying exactly as they are now, up to very high taxes or even confiscation of your savings. Think through / calculate what you would do in each of these cases. At what point would you lie to avoid taxes? At what point would you hide your wealth (possibly by storing it in banks at countries like Switzerland or the Caribian). At what point would you leave the country to live somewhere without the taxes? At what point would you tell the government that you don't have a dog anymore? After thinking through these scenarios, you might decide to make some changes now. Likely, most of the changes you'd have to make wouldn't need to occur until the tax changes happen. Remember that government is big and slow and clumsy. The tax changes nearly always will not affect you immediately - you'll have some time to decide and execute your course of action.
It might help or comfort you a little bit to take a look at what taxes have been like historically in Germany. I'd guess there have been times where taxes were higher/going up, and there have been times where taxes were lower/going down.
Like C40 says there is no way of knowing what will happen in the future, but this applies to employed people as much as the FI. The relatively low income which ERE usually demands means taxation is perhaps less of an issue than for higher earners. Some sort of draconian tax or confiscation of savings I would regard as extremely unlikely and not worth worrying about. And of course, (without getting into a political debate) taxation does pay for things which we are all likely to use (roads, libraries, healthcare, public transport etc)
That said, I would love to know what the dog tax pays for. Do bigger dogs have to pay more than smaller dogs
That said, I would love to know what the dog tax pays for. Do bigger dogs have to pay more than smaller dogs
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George the original one
- Posts: 5406
- Joined: Wed Jul 28, 2010 3:28 am
- Location: Wettest corner of Orygun
I deal with unexpected taxes by deciding whether they're onerous enough to make a lifestyle change. If dog tax/registration fee doubles from $40 to $80/yr, does it matter? On the other hand, if property tax goes up by 10%, from $3k to $3.3k, then I need to decide if they'll continue going up at that rate and whether it's worth my while to move.
Don't be concerned with the little amounts. It's the big ones that matter.
Don't be concerned with the little amounts. It's the big ones that matter.
Trying to outguess the tax amounts is like hauling 20 tons of chickens in a 10 ton truck. You have to stop every so often and beat the sides of the truck to keep half of them in the air.
Expect taxes to rise at local, State and Federal level on just about anything and everything. In the US, it was done on tobacco and gasoline until the populace could take it no more, but they had to have those items so they take it all the more.
Taxes are sort of compared to what people earn, and if the earnings are flat (which they are) the taxes are repackaged and sold as "tax cuts". (Lies). If you tell some people you are going to give them something, some of them actually believe it.
Expect higher and higher taxes. The government deficits are going to need rises in taxes to keep them from imploding. Taxes as we know them are not so bad as the elite robbing our pension plans, savings, and general net worth. Many people, once middle class earners, have a negative net worth now of days. Taxes are paid on almost everything to every level of government. If you are a die hard consumer, your paying so much tax, you could (and they do) call it a consumption tax. In my city they now want a 1% tax on meals bought dining out to pay for the operation of the city convention center. This has been a bloody battle. Let them close the convention center, I don't go there anyway. The one that croaks my crock is the used car tax. Any used car over $2,500.00 is taxed. Not many people buy a car at that price and actually get much. I guess you could buy one for $2,499 and come out? In this state a few years ago, there was no tax on used cars, period.
I can't answer how to prepare for higher taxes. You could die, but then there are death taxes!! No help there.
Good Luck
Expect taxes to rise at local, State and Federal level on just about anything and everything. In the US, it was done on tobacco and gasoline until the populace could take it no more, but they had to have those items so they take it all the more.
Taxes are sort of compared to what people earn, and if the earnings are flat (which they are) the taxes are repackaged and sold as "tax cuts". (Lies). If you tell some people you are going to give them something, some of them actually believe it.
Expect higher and higher taxes. The government deficits are going to need rises in taxes to keep them from imploding. Taxes as we know them are not so bad as the elite robbing our pension plans, savings, and general net worth. Many people, once middle class earners, have a negative net worth now of days. Taxes are paid on almost everything to every level of government. If you are a die hard consumer, your paying so much tax, you could (and they do) call it a consumption tax. In my city they now want a 1% tax on meals bought dining out to pay for the operation of the city convention center. This has been a bloody battle. Let them close the convention center, I don't go there anyway. The one that croaks my crock is the used car tax. Any used car over $2,500.00 is taxed. Not many people buy a car at that price and actually get much. I guess you could buy one for $2,499 and come out? In this state a few years ago, there was no tax on used cars, period.
I can't answer how to prepare for higher taxes. You could die, but then there are death taxes!! No help there.
Good Luck
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MountainMan
- Posts: 33
- Joined: Fri Nov 04, 2011 10:46 am
It is almost certain that we will face a wave of tax increases over the next decade as governments around the world try to balance their budgets in a stagnating economy (unless vigorous growth comes back, which seems unlikely to me without a new source of cheap energy). And don't forget the politians and central banks favorite hidden tax on savings, inflation!
To join the comments above, staying flexible, being creative and depending as little as possible on money seems to be the way forward, but that's what ERE is mostly about! VAT, income and property tax increases are going to squeeze the middle class much more than your average ERE retiree, if there will ever be such a thing! Worst-case scenario you might have to move, produce more yourself or even work a few hours. That's still a lot better than having to take on extra debt, working more overtime or getting a second job.
To join the comments above, staying flexible, being creative and depending as little as possible on money seems to be the way forward, but that's what ERE is mostly about! VAT, income and property tax increases are going to squeeze the middle class much more than your average ERE retiree, if there will ever be such a thing! Worst-case scenario you might have to move, produce more yourself or even work a few hours. That's still a lot better than having to take on extra debt, working more overtime or getting a second job.
this forum is realy great thanks you gave me a lot to think about.
Just to complete,
@George $40 to $80 wouldn`t matter that much thats right, but on a small budget going from €120 to €220 is a big impact at least to me. (second raise in 3years)
@chenda no it doesn`t matter how big the dog is, they call it a luxury taxe, well you dont have to pay taxes for horses maybe I should get one, LOL.
Just to complete,
@George $40 to $80 wouldn`t matter that much thats right, but on a small budget going from €120 to €220 is a big impact at least to me. (second raise in 3years)
@chenda no it doesn`t matter how big the dog is, they call it a luxury taxe, well you dont have to pay taxes for horses maybe I should get one, LOL.
One thing that I found interesting while living in Germany was that it is not common to sell used things (at least not as common as in the US). There was one day a year that people would go out and lay a blanket down and sell a few things. In the Netherlands, there is the Queen's day, which is when the population gets out into the streets and sells a lot of different stuff and has a big party. I came across a street market in Duisburg once that was quite like a bazaar of people selling their extra stuff.
In America, there is a tradition of the "Garage Sale" where you put up a few signs up and down the street, set a few tables in your garage, driveway or yard and sell all kinds of stuff, mainly household stuff that you don't need anymore. Garage sales are very common, you will likely find many every weekend during most of the year. It is quite entertaining looking at other people's junk and you can occasionally find some real deals.
There are some limitations on this, many cities allow only a few garage sales per year per property. The bigger issue is that technically state sales tax (similar to VAT) should be due on this type of sale, but it is never paid. This has become such a tradition in the US that no politician would dare to interfere.
In Germany, the Finanzamt is very efficient and also the municipal governments would likely send the police to such a sale to shut it down.
If taxes go up, figuring out how to run such a sale or market in Germany might be a way to decrease cost and maybe earn money.
Another thing that is big in the US is nonprofit organizations who take donations of stuff and then resell it. People get rid of stuff by dropping it off at the donation center. Volunteers sort through the stuff and put prices on it, and put it on display in a store. Because the organization that runs the store is a nonprofit, it pays no taxes(?), although the managers are usually employees who pay income tax on their salaries.
I wonder if this opportunity exists (or something similar) in Germany. Somehow I doubt that it exists because of the power of the state and Finanzamt.
By the way, my theory on EU countries that are defaulting on their debt is that in order to get additional credit, they will be required to accept that the German Finanzamt will have full control of their tax collection arm of the government, and possibly also the budget and treasury.
In America, there is a tradition of the "Garage Sale" where you put up a few signs up and down the street, set a few tables in your garage, driveway or yard and sell all kinds of stuff, mainly household stuff that you don't need anymore. Garage sales are very common, you will likely find many every weekend during most of the year. It is quite entertaining looking at other people's junk and you can occasionally find some real deals.
There are some limitations on this, many cities allow only a few garage sales per year per property. The bigger issue is that technically state sales tax (similar to VAT) should be due on this type of sale, but it is never paid. This has become such a tradition in the US that no politician would dare to interfere.
In Germany, the Finanzamt is very efficient and also the municipal governments would likely send the police to such a sale to shut it down.
If taxes go up, figuring out how to run such a sale or market in Germany might be a way to decrease cost and maybe earn money.
Another thing that is big in the US is nonprofit organizations who take donations of stuff and then resell it. People get rid of stuff by dropping it off at the donation center. Volunteers sort through the stuff and put prices on it, and put it on display in a store. Because the organization that runs the store is a nonprofit, it pays no taxes(?), although the managers are usually employees who pay income tax on their salaries.
I wonder if this opportunity exists (or something similar) in Germany. Somehow I doubt that it exists because of the power of the state and Finanzamt.
By the way, my theory on EU countries that are defaulting on their debt is that in order to get additional credit, they will be required to accept that the German Finanzamt will have full control of their tax collection arm of the government, and possibly also the budget and treasury.