Retirees and seniors working to pay taxes

Great Debates
41

I am nearly 71, retired and have a fixed (but fairly generous) pension, so I should be on the opposite side of this question. But I think that with living costs so high, it is anti-social for a senior to occupy more space than he really needs. I do, but I am prepared to pay the extra cost, but if I couldn’t, I would move. It is not the end of the world to move to an apartment. Let someone else have the advantage of our four BR house in a neighborhood close enough to downtown that I can and do walk it (about 4 miles).

That said, I strongly support the idea proposed by Chief Pedant and mentioned by a few others that we should be able to defer the taxes and have them added as a lien on our property.

I know a few of my colleagues who have bitten the bullet and moved to downtown apartments. My wife is opposed to this idea since we want to be able to have our children visit and stay with us. Well, you can’t have everything in this world and money is a great medium for forcing you to set priorities.

Home owners already get a tremendous tax break over renters. Renters, of course, pay their own share of property taxes through their rents. But the “rents” of homeowners are not subject to any income tax, while those of renters are. That is why most people in my situation who want to move to smaller apartment buy condos. I have heard (can’t vouch for it) that the Swiss add an amount equivalent to rent to your income if you are living in a property you own. This is independent of property taxes, as it ought to be.

Here is a true story. When I was growing up, two families around the corner from me decided to trade houses. They were identical row houses, although they might have had different improvement (I never saw the insides). They didn’t hire movers, just spent a Saturday carrying furniture from one to the other. That part is true, the rest of this story is just speculation. Suppose they decided not to transfer title (since that was subject to a 2% real estate transfer tax, half to the city, half to the state), just each rent to the other for $0. The government could have come around and added the amount of the fair rent to their incomes and required they pay taxes on it. In those days (late 40’s) the government didn’t have access to sufficient information to actually do this, but that’s beside the point. The point is that two equivalent economic decisions shouldn’t attract widely different taxes.

42

We have a problem in Ontario, where the provincial government taxes income, while the municipalities tax property and cannot tax income. A few years ago, the provincial government dowloaded a pile of crap onto the municipalities that the province previously had paid for, which left the municipalities scrambling to fund all this stuff out of of property taxes. The bottom line was that the provincial politicians did not want to raise income tax, so they passed their financial problems down onto the municipalities. (And the provincial politicians made the same complaints against the federal politicians, who had shafted the provinces.)

43

And why should young couples in NYC be entitled to a house in Westchester?

Westchester property taxes are high to pay for the public schools there. The scenario I’ve seen is: Young couples can afford to live in New York City. They cannot, however, afford to pay for private schools and don’t want to send their kids to public schools in the city so they move to Westchester where the public schools are better. The increasing amount of kids being enrolled forces the property tax rise to pay for increased education costs (rinse and repeat for New Jersey).

Why should someone like the woman mentioned in the article be forced to sell her house because other people feel entitled to free education?

Why don’t you tell young couples in NYC that if they can’t afford to live in the city, they should move to Montana or somewhere cheaper?

44

It’s not a question of entitlement. The main point is that from an economic perspective, it’s more efficient if a 4 bedroom house in Westchester is occupied by a young family than a 75 year old retiree.

The secondary point is that if you change public policy to protect incumbents, you run a risk of making life worse for newcomers.

Entitlement has nothing to do with it. Even if you leave the current policy alone, life is pretty difficult for newcomers.

Well, maybe they should. So what?

If you are evaluating a change in public policy, you need to look at who will be helped and who will be hurt. Again, it’s not a question of entitlement.

I could turn the question around: Why do you feel that retirees are entitled to remain in houses where they can longer afford the lawful assesments on those houses? If you believe that property taxes should be waived for such people, then why do you believe they are entitled to free police protection, fire protection, and garbage pickup?

45

what the heck? You want to explain how moving to a different location is a death sentence in even the remotest sense?

Going back to the story, this woman already lived in one of the most expensive tax bases in the country. It was a willing decision on her part to do so. Part of retirement planning is to take such things into consideration. She should have moved long before it became a problem. If she didn’t want to leave her beloved home that’s just too friggin bad. That’s her problem to deal with and her alone. Under no circumstances should life-style choices be funded with taxpayer money.

46

Their is a fair amount of research on how moving from a known location can cause depression, bereavement, etc. With the elderly, they often do not have the capacity and ability to make new friends, new contacts, find physicians, etc.

If they can go from an old home to a newer condo that is in the same area, there can be benefits. There are, however, psychological costs to moving as well.

My quick Googling found this, someone else with online access to some of the psych journals can find better.

47

How so? 3 of those 4 bedrooms are most likely going to be filled by children. Those kids will cost a lot more tax-wise than a 76 year old retiree.

But her life was made worse by newcomers. If all the newcomers didn’t flood Westchester looking for free education, her property taxes weren’t going rise so dramatically and she wouldn’t be in danger of losing her house. People like her, who have lived and worked in the area for decades, are the reason the region is so attractive in the first place.

Why are newcomers who have nothing more to add, except added taxpayer expense when their kids go to school, more important?

And this should be a priority because?

You were the one bemoaning the plight of young couples in New York. I was merely pointing out that if you suggest an old retiree move to someplace less expensive because she cannot afford it, you should suggest the same for anyone bemoaning the cost of housing.

Given the circumstances she is in. I don’t. I think she should sell the house. There are workable solutions to the problem as others have mentioned (rise in income taxes or liens on property) but they haven’t been implemented in Westchester so selling the house seems the only viable option.

That said, I can’t help feel sympathy for someone who might have to sell her house and move because other people want (and get free stuff). You shouldn’t be 76 and have to include the local high school football team in your budget.

More to the point, I find the tone of this thread, in general, repulsive. I think most of the posters in this thread are motivated less by the obligation you have to pay for services (which is something I would never have a quarrel with) and more by envy at the (perceived) size and worth of the house the woman lives in.

And I would bet anything that if these posters lived in the area with children and had a choice between paying higher income taxes or higher property taxes, they would choose property taxes because it would be cheaper for them and why should they care that someone else is forced to pay a disproportionate rate of tax to fund their lifestyle choices?

48

Somebody will have to pay for the childrens’ education no matter where they live.

First of all, kids have been receiving “free” educations in Westchester for decades. I suspect that Ms. Davison herself, if she had children, received such a benefit.

More importantly . . . so what? I don’t disagree that newcomers can make life worse for incumbents. That’s why people are constantly trying to raise barriers to newcomers.

I never said they were more important. But I do think they are not unimportant. Remember, we are all newcomers at some point in our lives.

Because newcomers count for something in my book. Not to mention that it’s in the public interest.

Ok . . . so what? It doesn’t undercut my point.

And I don’t think anyone is entitled to live in any particular county or area. As I said, it’s not a matter of entitlement.

Taxes are the biggest expense in life for the majority of Americans. Most people end up paying for a lot of things they never use. A large number of Americans pay a lot more into the system than they get out.

Why should old people be exempt from this principle?

I don’t know about that. It’s not the case with me, anyway.

Obviously people will choose whichever option gives them lower total taxes. No?

49

This is what motivates me ( can’t speak for anyone else). The woman in question no doubt bought that house knowing that she would be paying property taxes, based on the value of her property rather than her ability to pay. She didn’t have a problem with that when she bought it, and probably didn’t have a problem with it for years afterward. It no doubt benefited her in some way- maybe she would have had a higher tax burden in a place which taxed income, maybe she felt the services provided by the town made it a better deal than other towns with lower taxes or income taxes. Now that she can’t afford the taxes on her retirement income (at least 20 years after this started becoming an issue in the NYC area*) some people think she should eat her cake and have it , too. Get the benefit of the years the deal worked for her, but now that it doesn’t, something should be done so that she doesn’t have to sell.

  • One of the many reasons I didn’t move to the suburbs when I was house-hunting 20 years ago was because too many of my relatives were selling their houses and buying condos precisely because they could no longer afford the property taxes after they retired.
50

The question about “a death sentence” was answered by someone else, I see. Yes, that was my point: moving from the house she has lived in for so long might prove very hard, even traumatic, such events are terribly hard on many elders.

I also find the tone of some of the posts in this thread to be rather unpleasant, although “tone” is notoriously hard to judge on an internet forum and I may well be reading “tone” that is not intended. I have reached the age of “senior citizen” and am reminded nearly every day that few things are seen as worthless and undeserving of consideration in our present culture as an old person, particularly an old woman. My sympathy, therefore, is with the old woman in question, a sister, so to speak; my “ageist” attenae are at alert.

Laws regarding property taxes obviously vary greatly from city to city and state to state, never mind country to country. Given the natural increase in the number of elders expected as the Boomers age, such issues may get the attention they deserve.

51

Your quick Googling provided a book review which I couldn’t make sense of. This is not a problem that involves government intervention in any way. Everything causes depression with the Ederly. Big frikin deal. There’s a support group for that. It’s called EVERYBODY and they meet at the bar.

Seriously, It’s not the job of tax payers to finance life-style desires. I’d like 25 acres to put an air strip on when I retire. If I own the land for 30 years do I get a “poor me” discount because I can’t afford to maintain the taxes? I promise to live in a 1 bedroom house on the land if it makes you feel sorry for me.

52

From the standpoint of law and law enforcement, I would disagree. For example, which is more likely to get more police attention: A mugger who pistol-whips a 30 year old man, or a mugger who does the same thing to a 70 year old woman? Which mugger is likely to go to jail longer?

53

If I ever get mugged, I’ll let you know. :slight_smile: But in the meantime, my life is mostly lived without police involvement, and with surly salesclerks, condescending officials, patronizing waitresses. I could go on, but that would be derailing this thread.

54

Same for me, and I’m not an old person. But I’m a guy. Probably young women get all kinds of special consideration that fades as they grow older, at least in face to face interactions. But in terms of public policy, I doubt there’s much bias there.

That may be. No doubt waiters and waitresses are very sexist, ageist, and racist in terms of the services they perform. But again, I doubt this sort of discrimination is reflected in public policy.

55

Perhaps not “public policy” as a rule. But I can think of several instances where it was a specific public policy. One, for example, was the unthinking and casually cruel decision that couples could be separated in seniors’ housing simply because it was “easier” for the staff. It came as a shock to some policy wonks when they were told that a man and woman who have slept together for more than 50 years might want to go on sleeping together.

I daresay there is or might be another thread more appropriate for this discussion, so I’ll stop here.

56

Just answer the question.

You originally said:

“It’s not a question of entitlement. The main point is that from an economic perspective, it’s more efficient if a 4 bedroom house in Westchester is occupied by a young family than a 75 year old retiree.”

And I replied with:

“How so? 3 of those 4 bedrooms are most likely going to be filled by children. Those kids will cost a lot more tax-wise than a 76 year old retiree.”

And your lame non-answer was:

“Somebody will have to pay for the childrens’ education no matter where they live.”

And that’s not an answer to the question. Why don’t you tell me how, from an economic perspective, it’s more efficient if a 4 bedroom house in Westchester is occupied by a young family than with a 75 year old retiree. Cites, charts, graphs, lack of pirates?

Of course you did.

This is what you said:

“The other advantage is that this will make the house available to a younger family where one or both parents is still working and works in Manhattan or White Plains.”

“Maybe. There are a lot of young couples in the NYC area who can’t afford a house. From an economic perspective, it seems a little wasteful to have a 75 year old retired person living in a 4 bedroom house in Westchester within reasonable commuting distance of Manhattan.”

“It’s not a question of entitlement. The main point is that from an economic perspective, it’s more efficient if a 4 bedroom house in Westchester is occupied by a young family than a 75 year old retiree.”

“The secondary point is that if you change public policy to protect incumbents, you run a risk of making life worse for newcomers.”

What to make of the above quotes, then? It’s obvious that you give more weight to a “younger family” or a “young couple” or a “young family” or to “newcomers” than you do someone who has lived in Westchester for decades.

I think they should all be treated the same. You don’t. Why is that?

Why do they count for something? Why do they count more than retirees? What do they count for? How is it in the public interest?

Because it’s hypocritical to whine that young people have trouble making ends meet in NYC but think grandma should move when she has trouble paying the bills. To me, it’s one and the same, they should both move. To you it isn’t. Why is that?

Where did I say old people should be exempt? I don’t believe I did.

That said, there are workable solutions to the problems presented, all of which would ensure that taxes are paid (income taxes, liens) while allowing people to keep their houses. I would prefer these.

Property taxes in Westchester are high because of the cost of education. Many people move to Westchester so that their children can attend good public schools. The more students attend the schools, the more property taxes go up. I would rather see these people pay higher income taxes to pay for the schools they are actively using than have the people who are not using them pay higher property taxes.

I find it enormously hypocritical that posters, in this thread, are decrying this woman’s “lifestyle choice” when her taxes are high solely because of other people’s “lifestyle choice.”

And yes, I know, she had children and probably used public schools, as well. But from the content of the article, she raised her children well before this became such a bone of contention in Westchester. I think it’s very difficult to see and plan that far into the future (I don’t think you can predict thousands of people going on an education grab) and if there’s a workable solution around it, I think that should be the option to strive for.

I don’t believe you.

You missed my point, entirely.

57

The problem is that you don’t seem to understand the concept of efficiency. Because if you did, you would not have made the argument that you did. I simply responded to your argument.

But anyway, I will try to answer your question if I can make sure we are on the same page as far as efficiency goes. Do you agree that generally speaking, it’s more efficient to allocate a scarce resource to an actor who will make full use of that resource as opposed to an actor who will make limited use of that same resource?

If we cannot agree on what “efficiency” means, then I am not going to answer your question.

Because I think that newcomers count for something. I’m not saying that they are more important – I’m saying that they are not unimportant. If you think otherwise, then you have misread me.

If you think that the current tax setup is ok, then why are we arguing? It treats everyone the same.

Actually, I don’t think it’s outrageous to protect incumbents. I just think that governments need to be very careful about going too far.

Every resident of the country should count for something as far as I’m concerned. That’s a fundamental principle of democracy. If you think that there are people who “don’t count,” you have a right to your values. I disagree.

I never said that they did. If you persist in setting up this strawman, my responses will be pretty limited.

More than nothing. How much more? I would have to think about it.

What do they count for in your book?

Because the economy will run better if companies can fill jobs, which will only happen if prospective employees, many of whom are newcomers, can find a place to live. (No, I’m not saying that newcomers are more important or should be a higher priority. If you set up that strawman again, my response will be very limited.)

:rolleyes: Strawman. See my earlier posts.

You said this: "You shouldn’t be 76 and have to include the local high school football team in your budget. "

Well guess what: We all have to pay for government services that we don’t use. You seem to think that old people should not. Why is that?

As far as I know, the first big boom came after World War II. So people have been moving to NYC suburbs and sending their children to public schools for more than 50 years now.

Lol. Whatever. Want to guess the value of my house?

I don’t think so. You think it’s repulsive that people prefer tax structures under which they receive the same services but their taxes are lower. Fine, so 99% of the country’s taxpayers are repulsive to you.

58

What exactly to you mean by “senior’s housing” – is that a nursing home? Assisted living? Public? Private?

59

I guess it would be a joke if anyone was advocating that the person should “get out of paying taxes”. But no one is advocating that , certainly not me.

60

Point taken. I’m guessing that at this point many if not most cases are in this predicament because they can’t take care of themselves. Of this group there is certainly a noticeable percentage who have lost their mental faculties and this perception gets stamped on everyone who is wheeled through the door.

I often tagged along when my mother went visiting friends in this situation and I can see it happening. My perception of nursing homes, even nice ones, is that it I don’t want to go to one.

It’s not that there isn’t any empathy for seniors who are overwhelmed by taxes. Everybody is faced with this. The process of using tax money to fight a problem with people having problems paying their taxes is a self fulfilling prophesy.

Aside from the “it sucks to move” aspect of this, we’re really talking about publicly funded lifestyle desires. It would be nice if we all could retire to a lifestyle that is at or above our working years but that requires advanced planning. By default it requires living below one’s means. In the case used for discussion the woman would have needed assets of $300,000 just to cover her taxes. If she wanted the income of $40,000 per year she would need $1.3 million in earning assets to fund this.

If she doesn’t have those assets then she can either move or take out a reverse mortgage. That’s life.