<p>The impact is mostly in Democratic States- the GOP has no real incentive to fix it. NJ, NY, Mass, California and Eastern Pa. are where most of the minimum tax will hit.</p>
<p>The democrats have no incentive, either. They know that those states aren’t up for grabs.</p>
<p>AMT has been around a Long Time. Congress and Administrations have known of the problem a Long Time. For those who known about it for a Long Time, have already taken precautions. </p>
<p>Your AMT has been delayed until next year but at a National Cost of ~$50 Billion in extra deficit to be paid by your retirement and college kids.</p>
<p>[Senate</a> passes bill to block AMT tax increase - USATODAY.com](<a href=“http://www.usatoday.com/news/washington/2007-12-06-tax-fix_N.htm?csp=34]Senate”>http://www.usatoday.com/news/washington/2007-12-06-tax-fix_N.htm?csp=34)</p>
<p>zoosermom- you are correct</p>
<p>Progressive taxes are just wrecking my finances and those of many others who live in high cost/high income areas. I live in an area where the cost of living index is about 1.7. So I need to earn 70% more than the average in order to afford to live here. Unfortunately a lot of the extra money I earn gets eaten up by the progressive taxes and the very high property taxes in my area. Then there is the FAFSA issue where the high cost/high income kills the financial support for college tuition. I believe I would be better off financially to live in an average cost area with half of my current salary. My D is halfway through college so it is probably way too late to try to salvage the FAFSA situation, but I think it is time to move anyway.</p>
<p>Edad, I agree completely and feel the same bite. I wish my husband didn’t have a residency requirement, but he does, and so we remain here till he retires. Then perhaps we will find a place that is cheaper but where I can still commute.</p>
<p>I agree with you edad, and zoosermom. Frankly, every member of our extended family has now moved out to lower cost areas with exception of my H, myself, and my mother. We are stuck here since my DH is self employed and cannot sell his practice. I have been thinking all day about how choked we feel by living here. Its sad. We grew up in the NE and our families had a much better lifestyle than we have. All of family members now have a nicer standard of living than we have, and when they were living here their standard of living was the same as ours. </p>
<p>Just wanted to add that moving does not necessarily mean less income. Both of my BILs are earning the same amount of money. They simply were able to relocate and continue their employment with the same companies.</p>
<p>So far we’ve still been poor enough not to be zinged. But both our incomes went up a bit this year, so we’ll see…</p>
<p>Actually, I agree about incomes in other areas. I did some salary comparisons and found that cost of living may vary widely, but salaries are remarkably consistent.</p>
<p>I’ve been putting current year info into my online tax software program. My AGI is actually slightly less than less year thanks to the whopping $4000 education credit. But my income tax refund looks to be a little less (not sure of exact amounts to put for interest and dividends). But I know to the penny what my pay for 2007 will be. </p>
<p>Maybe I should see if I get a better number using the Hope or Lifetime Learning credit, but my AGI is in the ‘phaseout range’, so I’m going to have to move some numbers around. </p>
<p>Thanks Uncle Sam, for nothing.</p>
<p>I remember when taxes were REALLY progressive, before the Reagan tax cuts…not from personal tax-paying experience, of course.</p>
<p>I know I can’t earn what I earn in my high COL area in a lower cost one. But my husband could. As soon as these kids are grown up, it’s time to move to someplace more reasonably priced. I am sick of paying a salary in property taxes, the highest electricity rates possible, extremely high health care costs, etc. The only good part is that we will shortly have paid down the mortgage on our house, so I can take a lower paying job, or do something completely different, and our lifestyle will not substantially change.</p>
<p>That is what is so sad. Those that can move are doing so. All of my relatives who have moved either work for national companies with locations in lower COL areas and their salaries did not decrease with the move, or they were still able to find the same work for the same salary (one works in a highly specialized field) in cheaper area. Oh, and my first relative to move laughed at us about 15 years ago. His $250,000 home would have cost 3x that in our area at that time, and his property taxes were only 1300/year vs. our 6-8000/year at that time. His property is now paid off, and he is onto his 2nd property. His property has not increased in value as much as ours, but he was able to pay the mortgage off much more quickly while owning and maintaining a very nice boat as well.</p>
<p>ya my brother had a real shock when he moved to the Seattle area from Indiana last year. He had been living in areas where you could live in a gated community with a golf course for about $280K <<<<cough cough=“”>>>>>></cough></p>
<p>I think you could get a studio condo for that if it was in a bad enough neighborhood.
Of course he has retirement income from the military and his wifes income as a teacher which is a fairly portable job- he doesn’t have to work as an electrical engineer.</p>
<p>We are moving - putting the house on the market Jan 1. Destination… unknown! Only thing I know is we can’t afford to stay here. One of the most annoying/frustrating/disappointing things about the AMT is that all these years I rationalized these extremely high property taxes by saying, “oh well, at least it’s a tax deduction” and it turns out they weren’t really deductible after all.</p>
<p>You guys in locations where property values have risen exhorbitantly need an equivalent of California’s prop 13 where property tax is 1% of the home purchase price and stays there (except for all the bonds that get passed). It’s a shame when elderly retired people end up losing their home simply because they can’t afford the ever-increasing property taxes due to something beyond their control - rising property values. This despite having already paid property taxes on the property for 40 or so years.</p>
<p>Sorry, but I just have a real hard time feeling sympathy for someone whose property value is now $1mil. Granted the taxes are outrageous, and it may be difficult to stay in your home. ON THE OTHER HAND, think of all the things you could do with the money if you sold and moved to the midwest, or a more depressed area. You may not want to move, but there are an equal number who do. For example, those in the midwest can possibly retire in their homes, but likewise have no option to move elsewhere. Some would like to be closer to their children on the coasts, or perhaps a great job opportunity, but can’t afford to live anywhere but their own small town home in an area that hasn’t skyrocketed. The grass is always greener, I’m sure. Feel fortunate you have a great investment!</p>
<p>" Feel fortunate you have a great investment!"</p>
<p>We are trying to hang on to this feeling of good fortune ( not one mil, but still… ) but it’s hard when so many homes in the neighborhood are in foreclosure after having been on the market for so many months…</p>
<p>Don’t assume that every homeowner has a million dollar asset. Our home and the average home in our area is not worth even close to that, but our property taxes are still huge. Many seniors do need to move out.</p>
<p>NJres, I wish you all the best!</p>
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<p>It’s not always that easy, though. I mean, what if your job is tied to a specific locale? Not everyone can just pull up the anchor and sail to parts unknown. I suspect you’re suggesting that the home sellers live off of the gains on the investment, but let’s be fair here: after you factor in the inflation rate, it’s probably not so much for those who bought in the 1970s. Still, if I’m not mistaken, the Taxpayer Relief Act protects sellers from taxation up to $500K if they’re married. Is this still the case, anyone?</p>
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<p>Prop 13’s a double-edged sword. On the one hand, it gives taxpayers significant relief. On the other hand, it’s created significant financial disparities in the school system. But then again, if you live by a charter school…</p>