Remember income averaging? I discovered this year income averaging no longer exists. It seems like it was a good idea to me. It would have been helpful for the author probably.
@alh, sorry. You are old. 
Income averaging hasn’t existed for a long time. Income averaging may have helped Gabler if it still existed.
I would feel better about him if he’d written an article about financial illiteracy among those who had the means to know better. I’m sure it’s common, and he’d be a sympathetic poster child.
What I don’t like is his conflating of his own mis-steps with those who were victims of the bad economy. His problems date back to waaayyy before the recent recession. They are uniformly bad, through good and bad economies.
He pretends to take responsibility, but time after time, he immediately then negates that connection, moving on to align them with the woes of the real economic victims. As I’ve said over and over, this is what makes him unsympathetic.
And it’s bad faith writing. It’s sneaky. It takes ownership, then doesn’t. It asks for no sympathy, then does. And most egregiously, it may well be making legions of readers say, well, guess I really DON’T have to care about those folks, since they’re all financially stupid and responsible for their own problems.
It’s a systemic issue which needs systemic answers, and this article is tailor-made to push readers to care less about supporting those real answers…
That’s why it’s damaging. Very, very damaging.
But I’m sure he’s making good money from it. Probably got a book deal, too. /sarcasm.
@dstark, I do not intend to imply that you could be judgmental here. I do not know more than what DS happens to have mentioned. I doubt he knows much either. It is better not to be too nosy about his GF’s family business in their current stage of relationship.
There could be no lack of people who may think the young people should stand on their own feet without being spoiled by the financial support from their parents after college. But it is sometimes not how it works in some family’s dynamics In some family, For some families, whatever parents have are by and large their offsprings’s and vice versa. This could lead to something good or bad in the long run, depending on many other factors. What is often troublesome is that either side cherry-picks what they want only, instead of adopting the whole “system” all the way.
"His situation in terms of getting lump sum advances is really not very different from that of millions of business owners. Maybe people who only been employees don’t understand this since they haven’t lived it. "
Yes! And if you own a small business, you pay your employees first and there may be times where you take very little / nothing from the till yourself.
" For the sake of brevity, he probably meant negotiating an installment plan with the IRS instead of not paying the taxes due. It is perfectly fine and legal - and he pays a hefty interest on top of the penalty, too."
Totally legal. Fiscal quicksand given the hefty penalties that accrue, but legal.
@mcat2, Ok. I don’t think I would be asking much about the GF either. I don’t think is would. I am not so far.
I was giving examples why I think downpayment requirements should be adjusted depending on the time and situations we live in. I am not sure about your GF’s situation. I wanted to see how her situation fit with what I wrote.
I think most economists would agree we should loosen credit when times are bad and tighten credit when times are good. The reality of what happens is a little different than the thinking. 
Fiscal quicksand is a good term. Yup. The interest % is set high to make folks think twice about trying to pull that one. It makes borrowing on margin a bargain compared to borrowing from Uncle Sam (never done either - the % makes my hair stand on end).
“That is so sweet and I’m so happy you got your child! He is a lucky young man.”
Thank you and we are the lucky ones! Can’t imagine our life without him.
So, to revisit my recent post, I want to make it clear that by bad writing, I mean bad critical thinking, writing that may cause others to care less, and less support systemic changes, which would help those in much more dire circumstances than NG’s.
@dstark, you were nice enough to defer when I made a writing critique, but I have to make it clear that by “writing”, I don’t mean what adjectives he used, or pretty metaphors. I mean critical thinking, bad critical thinking, that will lead to more reader apathy and less sympathy for those who really need it.
Do you disagree with that? And if so, why?
@dstark - Financial crisis related. Have to do what you have to do, and that’s what I had to do. Got several hundred employees and their families who depend on us, as well as lots of other people who count on us to not let them down.
When a business or financial crisis hits, I think of it like doctors on a battlefield. Lots of painful choices to make … might even have to cut off an arm or a leg. No choice; you simply have to do it if you want the patient to live. Same thing with cutting business or personal expenses. Have to analyze the problem professionally and without emotion.
Of course, I am speaking as someone who’s done quite well in life. But what comes along with this is that you pick up lots of obligations to people who depend on you to make good decisions and to look out for them … even if your decisions aren’t going to be popular.
According to google, book authors seem to get their advances in 3 lumps: 50% when the contract is signed, 25% when a draft is turned in, and 25% when the book is published. They don’t just hand them all the money at once. So there’s already a bit of spreading out of payments already; i.e. some income averaging is already being done. Maybe it took him 4 to 5 years to write his Disney book, and his income was already being averaged over 3 years or so. I don’t think lack of income averaging was a big contributor to his problems … a small contributor perhaps.
I remember income averaging was very helpful to me when I started my legal career in 1982 and then afterwards, when I got a raise. It was phased out of the tax code shortly thereafter. It hasn’t been around for decades. My S was never able to use it when he started his career.
The loss of income averaging from the tax code isn’t the issue for most of the middle class who are struggling. It is getting full time jobs that pay enough for a decent quality of life, including food and shelter.
@mcat2,
My comment about one’s ability to qualify for a mortgage, come up with a down payment and handle the taxes and maintenance was in response to @dstark’s post/comment. You seem to personalize comments that are simply part of the general discussion as directed to you. This is a general conversation, not about your DS or his GF. In fact, it seems no one is talking about your DS or his gf and her family… Except you.
My wife agrees. I don’t. My wife is the better half but its close.
I googled middle class squeezed. I received back 2,100,000 links. I didn’t go through them all. Some might be duplicates or irrelevant. That’s a lot of links though.
Gabler is not going to be the poster child on this issue. How many people really read the Atlantic? How many people listened to him on NPR? How many people are really paying attention to him? How many people have already talked about this issue. Robert Reich has been talking about this issue since 1992? Or earlier? He’s not getting anywhere.
I look at this like Donald Trump looks at publicity. Any publicity about the middle class getting squeezed is good publicity.
I listened to him. He said the right things whether he is bsing or not
I am not going to be a spokesman for the middle class and write any articles. I am not going to use a pseudonym. I hope I spelled pseudonym right.
The criticism blows my mind.
I think you are extremely intelligent… Even when I disagree with you. Even if there is a financial crisis or it’s partially your fault and you have to lay off people, I still think you are extremely intelligent.
NG is closer financially to the middle class than you financially are to NG.
I am so financially conservative. Now. Not earlier. I am so financially conservative, I downsized and I did not even have to downsize.
I made so many dumb financial decisions in my life. I can relate to what NG is saying. Maybe not doing, but I have seen others do the same thing. In bigger scales too. Much bigger. I may have one more bad decision I have to deal with and then I am going to clip coupons and hope we don’t have runaway inflation.
If we do have runaway inflation, you can call me an idiot.
Post 793 (which was from dstark to me) and post 794 are next to each other, and they are all about rent vs own. So I am confused. That is all.
@dstark --good answer–thanks!
Farmers can still income average. Guess that wouldn’t help this author. The IRS interest rate is 3% on underpayments. Not quite understanding why several posters are thinking that’s so horrible. It’s a heck of a lot better than people could borrow on their credit cards (an initial consideration of many taxpayers) and given the credit many of them have, better than they could do at a bank. IRS installment plans are easy to set up and much more taxpayer friendly than they were 15-20 years ago.
^How much you pay depends on whether you fail to file and pay on time or just pay on time.
Here’s some details:
"Interest rates charged by the IRS are not unfair – the federal short-term rate plus 3%. This has left IRS interest hovering in the 5% range. Think about it – you owe the IRS money, they are now your bank, and they are charging you a reasonable rate of interest for a loan that they really never agreed to.
The penalties is where the hurt comes in. The IRS charges multiple penalties, mainly for penalizing you for not doing something when you should have. The most common penalties are for not paying on time and not filing on time. If you owe taxes to the IRS, chances are you also owe them at least one of these two penalties.
Here is how the penalties add up to make repaying the IRS difficult:
Not paying what you owe when you file your return. The late-payment penalty is one-half of one percent of the tax owed for each month it is unpaid. Every month you owe, the penalty amount increases by a half of a percent. So the first month the IRS will charge you a half percent of the tax due, the second month 1%, the third month 1.5%, etc. The late-payment penalty does max out at 25%. So if you have owed the IRS for more than 24 months, your late-filing penalty has hit its limit – 25% of the tax. (Note: the half percent rate increases to one percent (1%) if the IRS issues a final notice of intent to levy and the tax remains unpaid for 10 days thereafter.)- Not filing your return on time. The late-filing penalty is sort of like the late-payment penalty – it escalates every month, only quicker. The late-filing penalty starts out at five percent (5%) of the tax owed for each month your return is late. The penalty increase by 5% every month for a maximum of five months, hitting its limit at 25% in the fifth month your return is late.
When both penalties run concurrently, the late-filing penalty is reduced from 5% to 4 1/2% monthly. When both penalties apply, the late-filing penalty hits its max at 22.5%, with the late-payment still maxing out at 25%.
The combined penalty for not paying on time and not filing on time: 47.5%."
Wow-47.5% is quite steep, plus interest on late payments! Fortunately, we have not had that since we file our taxes every year and with our new CPA are actually ON TIME instead of filing an extension as we always used with our former CPA.