End of the $400 Property Tax Rebate
Since 2004, $400 rebate checks have been sent out to homeowners courtesy of the Bloomberg administration. Well, no more. The mayor is immediately axing the program, reports the NY Times, to help shore up the expected $4 billion budget deficit. Other quick fixes: raising personal income tax by as much as 15 percent; hiking the…
Since 2004, $400 rebate checks have been sent out to homeowners courtesy of the Bloomberg administration. Well, no more. The mayor is immediately axing the program, reports the NY Times, to help shore up the expected $4 billion budget deficit. Other quick fixes: raising personal income tax by as much as 15 percent; hiking the city’s portion of the state sales tax by as much as three percent; and charging a nickel for every plastic bag a consumer picks up at a store. “The mayor also detailed $1.5 billion in proposed budget cuts that would affect virtually every agency in city government,” they write. “The measures include closing libraries for a half day, eliminating dental programs and closing a clinic in East Harlem.” Should Wall Street rally and the economy heal, the mayor said, checks will go out again.
Mayor Cancels Rebates for Homeowners [NY Times]
Photo by tienmao.
Dittoburg – I fully realize that to buy a brownstone costs a lot (or it has up until recently, though we’re starting to see some serious price cuts). But apartments are starting to suffer more now and have had even more serious price cuts, and as has been pointed out numerous times on this blog, there are lots of neighborhoods where prices are cheaper i.e. Ditmas, Bay Ridge, etc. Yes, we are lucky to have equity from our previous place which, frankly, makes up in part for the fact that our incomes are modest. If we had not had that equity, then we would adjusted our housing search accordingly, in the same way that we budget ourselves modestly in every other aspect of our lives to reflect the reality of our incomes. But, even if we did not have that equity, if we made an extra 100K in salary, then that would mean we’d have that much more to spend on a mortgage – and that’s a lot of mortgage money, if, say, we wanted to buy a 3BR apt or even a whole house in one of the less expensive neighborhoods. My overall point, though, is that there are many ways you can budget yourself, and I truly wonder if the people who feel squeezed at 250K are simply unaware of how luxurious their budget is compared to most people.
My point being, I suppose, is that its relative. You and your husband could certainly afford to pay more tax right? After all, many couples exist out there raising two kids on 50K a year. They would probably jump for joy with all the spare cash they’d get on your and your husband’s income.
When a 250K salary just gets you a mortgage on the average home price in New York City ($853,000 in the first quarter of 2008), you might be smarting that you don’t feel rich.
Miss Muffet;
I think that my estimates of the medical expenses are not atypical. MANY policies today have a high deductible of at least $500 per person, and don’t cover some procedures. Have your kids ever had work by an orthodontist, which is not covered? The coverage for eyeglasses is also minimal.
As for the 401K: I don’t think it is a “luxury” to be saving for my retirement. I would like to be self-sufficient when I retire, and not be a burden to anybody. I surely could use that money for other things, but I am trying to do the right thing. My point, in my response to Snark Slope, is to show that for a middle-class person trying to do right by his family in NYC, $250K doesn’t make one “rich”.
Finally, I can respect your choice about a car, but I think you need to be realistic. To have one car in NYC is not an outrage. I am not talking about buying a HUMMER, I’m talking about having a family car, and once again, I don;t think that makes me “rich”
Miss Muffett – of course 250K is a lot of money.
But it won’t get you a mortgage to buy you any of the HOTDs seen on here. I undertstand that your are in the market for a new house, but without having had equity from the housing bubble runup, how could you ever hope to buy a brownstone, the house most people on this site want?
Benson – you do realize that many, many people do not have the luxury of putting so much towards their 401K, right? So while it’s admirable that you are putting away so much, do you really think someone making 250K+ can’t afford to pay a bit more in taxes and a bit less into their 401K? And if you’re spending $500/month on non-insured medical expenses, I’m baffled. What on earth are you spending all of that on? If you have a serious medical condition, my apologies, but I suspect that is not typical unless one DOES have a significant medial condition. And do you really need a car in NYC? We happen to have one, but we bought it used, outright, and frankly have often thought of selling it (just due to parking hassles alone). Anyway, we could go on and on dissecting family budgets, but my bigger point is that, what some folks think is “essential” may be a distant luxury to many others.
Actually, rereading the folks on this blog complaining about how 250K is not that much – I really wonder how you live? Do you eat out frequently? Do you have a particularly expensive car? Do you take very expensive vacations? Do you send your kids to private school? Buy lots of clothes? If so, perhaps you are just spending your money much more freely than other people do. There are so many ways to have a decent quality of life without spending tons of money, if you’re just careful with your choices (shop at the food coop, buy clothes on sale, borrow books from library, cook at home, bring your lunch, share childcare, go to public school, etc. etc.). None of these things feels like a “sacrifice” to me, just a normal attitude of being thrifty, community-minded, and not overly materialistic. My kids want for nothing – they certainly have everything they need, as do my husband and I. But we’re just careful about how we spend our money. Don’t mean to sound preachy, but I’m truly surprised that one would complain about an income of 250K.
Snark Slope;
Somone earning $250K is not a “Master of the Universe” hedge fund manager. Rather, he or she is probably a mid-level executive. Such a person would have the following expenses:
-401K: likely 6%, if not 10% of salary. That’s probably $2K/month,right there.
-Health Insurance premiums: $500/month.
-Medical expenses not covered by insurance: easily $500/month for a family of 4.
-Education expenses for kids (such as saving for kid’s college): $1-2K month
-Car expenses. Even with just one car, you’re talking about $500/month, if you consider insurance, maintenance, car payments, etc.
Just adding up these costs, we’re talking about $4.5-$5.5K per month, and we haven’t touched home maintenance costs, commuting costs and food costs.
The lifestyle I describe above is not lavish. It is a middle-class lifestyle as known in countless suburbs. Such a lifestyle is quite expensive in NYC, however. Last time I checked, our car insurance rates are double the nation’s.
$250,000 annual income is a lot of money even in NYC.
If you find it difficult to make it on that you need to cut back on the recreational drugs.
I frankly don’t get these people making over 250K who are so scared of a tax increase. My husband and I, with our 2 incomes combined, make a lot less than that and support ourselves and our kids on what is evidently a very modest income for NYC. While we are frugal, we also are doing fine, so frankly never felt we “needed” the $400 tax rebate and like funstraw, wished it would go into public services in my community (i.e. schools). If we had another 100K lying around annually, I’m sure we would be able to afford to pay a bit of that in higher taxes.