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Dear 22 Year Old: Concerning your economic Future
- rmk 16y agoVery well-written. I wish I shared the pastor's optimism!
- SlyShy 16y agoAs an 18 year old reading this sort of writing makes me want to leave the country. Except that I'd be taxed for ten years after expatriating, and there isn't any country that I know of as being similarly entrepreneurial. If anyone has suggestions, though, I would love to hear them.
- akozak 16y agoYou can't control everything. Stop worrying about things you can't change and start enjoying life.
- deleted 16y ago[deleted]
- loewenskind 16y agoThis doesn't contradict what you said but: you can change what country you live in.
- rottencupcakes 16y agoSadly, other countries are generally worse than the US. If you're nice, I'll let you live in my Seastead: http://seasteading.org/ http://seasteading.org/
- deleted 16y ago[deleted]
- anonymous245 16y agoInteresting. Are you sure taxation ends after 10 years?
- stretchwithme 16y agoyeah, after you forfeit your citizenship, the US expects you to keep paying income tax for ten years.
- loewenskind 16y agoOnly if you give it up for tax purposes.
- dagw 16y agoI think it depends on if you have any financial dealings with the US. As long as you completely leave (no property, no loans, no investments, drawing no salary from the US, not paying into any of retirement benefits etc. etc.) then yea it will end. On the other hand my mother hasn't lived in the US for close to 35 years now and she still has to file a tax return and pay a few bucks every year, due to still having some financial ties with US.
- loewenskind 16y agoNo, this is completely wrong. Filing has nothing to do with "having some financial ties with the US", it has to do with being a US citizen. You are double taxes with some extra write-offs [1]. The 10 year thing comes if you give up your citizenship for tax purposes (if you have over $2million in assets this is automatically assumed). In that case you are taxed at a higher rate for 10 years before finally getting off the hook. If you give up your citizen for other reasons then you only have to file for one additional year. Oh yea, if you have $10k at any moment in the course of the year you must report all bank accounts where the money was (i.e. 3k in one account, 5k in another, 2k in a third, report all 3). You wont hear about this rule unless you live in a so-called "tax haven". Guess why that is. [1] This is very complex. For a single earner you can take an exemption on the first ~$80k. In most of the US that's a lot of money. Not necessarily everywhere, so depending on where you live you may hit this pretty fast. Taking the exemption makes you unable to claim certain things so you can also chose not to take the exception and use a more complex form. I have a tax guy do this for me (takes him over 3 hours to go through the paper work) and costs about $1k/year.
- aquateen 16y agoI'm pretty sure you don't get double-taxed on your first x dollars, where x is 80k or more if I recall.
- dustyreagan 16y agoAlternatively you could take some initiative and help make your current community and ultimately your country better.
- dustyreagan 16y agoThe down votes on this make me sad, so I'm compeled to elaborate despite my better judgement. Say you move to France because US taxes increase. It's great in France. Then they up taxes, so you move to Australia. Then Australia goes to war and you disapprove, so you move again. At what point do you stick it out? I'm not saying your country or city of origin is by default the best region for you to live. But the only reason there are great places to live is because intelligent, creative, passionate people found a community they cared about and they stayed to work through the difficult problems. You could be one of these people... or you could move to a country with currently lower taxes.
- lsc 16y agoIf you can, do so. see what it's like. But don't burn your bridges. If you do find some place better, that's good for you. If you don't? then you'll have a much better appreciation for your birth country.
- ianisborn 16y agoBeing a 22 year old myself, I'm grateful that nothing in here is surprising to me and that my parents made me start a savings account when I was young (like 10 or something). To be honest, I don't think I've met anyone from my generation who expects to see money from social security when they retire.
- runT1ME 16y agoA government mandated Ponzi scheme. Brilliant. :(
- jojopotato 16y agoI don't quite get why people keep calling Social Security a ponzi scheme. A ponzi scheme is defrauding investors by saying that there has been growth in the assets and it's paying out dividends, SS doesn't make any claim like that. The real problem people are complaining about is the burden that was shared by many (by having lots of kids) is going to be shared by fewer and fewer people.
- runT1ME 16y agoSocial Security's dividends are paid for by the new investors buying in, and THOSE investors will only be paid out if even more investors enter the scheme.
- stretchwithme 16y agoand if new "investor" don't live much longer than those who paid in before. which, of course, is where this scheme really breaks down.
- shawndrost 16y agoWait a second -- to be strictly accurate, Social Security does explicitly state those two things. WRT "growth in assets": they send out letters to all enrollees stating the amount of money that each has coming to them. and the number is higher than the amount the enrollee has paid in (to reflect the interest that "will accumulate"). WRT "paying out dividends": the system is paying out dividends, obviously. I know some of the people getting checks. Not sure what you meant by this. I think it's a bit misleading to call Social Security a ponzi scheme -- mostly because it implies a ringleader, which I observe to be a dangerously appealing falsehood to many -- but your observations seem to be false.
- sbov 16y agoI thought that this applied to those 40 and under.
- brc 16y agoyes, me too. There seems to be an entire generation of people missing from this thought bubble. It's not going pass from a bunch of 50 and 60 year olds straight to 25 year olds without skipping the ones in the middle. The ones that worked through the 90's recessions and probably remember the '80s recessions as well.
- Locke1689 16y agoThere seemed to be a disconnect here. Just because one is a Baby Boomer (i.e., has life experience) that doesn't give one the magic ability to predict the economic future of, really, the entire world. This article takes the tone of a wizened elder bestowing his wealth of knowledge on the younger generation but it's really just another futurist taking potshots on what's to come for the United States. At this point there are so many people talking of what's 'inevitable' that I'm disinclined to trust anyone who has a prediction range longer than a week.
- _delirium 16y ago> At this point there are so many people talking of what's 'inevitable' that I'm disinclined to trust anyone who has a prediction range longer than a week. I would at least give it more credence if it was from someone who appeared to have any sort of track record with or familiarity with economics. Looking at this guy's past columns, I see a pretty strange mix of stuff: http://www.drurywriting.com/keith/ http://www.drurywriting.com/keith/
- Locke1689 16y agoUgh. Yeah I found this. I teach practical ministry courses at Indiana Wesleyan University. I write a weekly Tuesday Column during the school year and am usually backpacking or bicycling in the summer. A real economics guru we've found.
- anonymous245 16y agoHave the "real" economics gurus like Greenspan (snicker) delivered?
- akl 16y agoI'm sure some people might argue he has, but ultimately it doesn't matter in this context; failure of 'real' economics gurus to succeed does not mean any random person is equally capable in the subject.
- Reclix 16y agoInteresting thought on the tax loophole closing (when considered a bit more broadly). If we must put up with high taxes, then what's the point if only the people who can afford clever accountants can find a way to shuffle money to loophole their way into lower tax brackets? I used to work for a Hollywood account, and every single actor has their own company for this reason. Wasn't it Warren Buffet that mentioned he pays less taxes than his secretary? Or is this propaganda that I've been duped into believing?
- _delirium 16y agoWarren Buffett did say that: http://www.timesonline.co.uk/tol/money/tax/article1996735.ece http://www.timesonline.co.uk/tol/money/tax/article1996735.ec... Whether it's a good example, propagandistic, etc., is another story, but on the factual question of whether he said it, he did. The main reason isn't so much loopholes as source of income: employment income (what his secretary gets) is taxed at a higher rate than investment income (what Buffett gets).
- jballanc 16y agoThere is a word for this sort of viewpoint: Luddite fallacy (http://en.wikipedia.org/wiki/Luddite_fallacy http://en.wikipedia.org/wiki/Luddite_fallacy) It amazes me how people fail to see their own Luddite-ism. Look, here's the deal: The Luddites protested the mechanization of the textile industry during the industrial revolution. Their reasoning was that if one person maintaining one machine could do the same work as 100 individual laborers, then that would mean 99 people out of work. It turns out, what businesses actually did was keep all 100 workers employed and instead turned out 100 times the product. The U.S. (and the rest of the developed world) is only in trouble if we cannot continue to grow our economy exponentially (and keep in mind that an exponential increase in efficiency or an exponential decrease in material costs is just as good as an exponential increase in gross product). What really _kills_ me, though, is that the very thing that we need to achieve sustained growth is the very same thing that people are trying to cut out: funding for science and technology research. Every time I hear some Republican's campaign add talk about: "Can you believe we spend money digging up dinosaur bones in China? Shouldn't we spend that money at home?", I die a little inside. If China overtakes the U.S. as a world power, it will be due, in part, to the rapid increase in Ph.D.s and research funding that they are currently undertaking. In the history of the world, there has never been a time when the most powerful nation was not also the most technologically advanced.
- ataggart 16y ago"This sort of viewpoint" is fundamentally different from the luddite fallacy. The crux of the fallacy is misapprehending the results of productive increase, thus mistaking a Good Thing for a Bad Thing. That's not what's going on in the article (unless you have a very different perspective on intergenerational debt). Now it is certainly true that we'll be in less trouble if the economy grows faster than the hole being dug, but a hole is still being dug. If things improve it would be in spite of, not because of, the indebtedness being incurred. Again, the luddite fallacy is not applicable. It is also certainly true (and proven over the centuries) that investment of capital accumulated through deferred consumption can, when applied toward improvements in technology, yield productivity gains, thereby improving the balance sheet of the inventor and the living standards of the common man. Such gains will emerge from the market, revealing what works and what doesn't, and in not working will free that capital to be put to more productive ends. It's not at all clear to me that a debt-funded, politically-allocated system will yield better outcomes.
- gamble 16y agoRight now, in the wake of the most significant financial crisis in decades and with the country staring down enormous structural deficits, the most contentious issue is whether it's fair to let tax cuts expire for people making more than $250k/year. America isn't remotely close to a serious debate. The problem with articles like this is that they assume the country is still capable of negotiating changes that would require significant shared sacrifices. The last thirty years, and 2008-2010 in particular, show exactly the opposite. Americans are going to insist on high spending and low taxes until a serious, generational crisis like the Great Depression makes that impossible. Can anyone seriously look at the political culture today and imagine that a VAT could become law? Or that anyone is going to fall on their sword to cut Medicare and Social Security benefits? If anything is clear about American politics since the emergence of movement conservatism, it's that any attempt to increase taxes or tackle popular social programs is political suicide. Look at Obama's health care bill. I hope you like it, because no one is going to touch healthcare again in our generation. I expect exactly nothing to be done about America's problems until those problems are so serious and the social dislocation so severe, that one party assumes near-dictatorial control of Congress and the motivation to use it, as happened during the Depression. There was an opportunity for rapprochement after the 2008 election, but that moment has passed. Now it's only a matter of time until the next, far more serious crisis. If you want to plan for the future, don't assume American politics is somehow going to become more rational on its own. Plan for the crisis. Invest defensively. Don't assume the existence of government programs or the absence of sudden, sharp tax hikes.
- philwelch 16y ago* Look at Obama's health care bill. I hope you like it, because no one is going to touch healthcare again in our generation.* Well, no one's going to take on the mantle of vast reform anytime soon, but there isn't an administration in recent history that hasn't tweaked health care a bit one way or the other.
- stretchwithme 16y agoI think it will be touched again. When everybody realizes they can just pay a fine instead of buying expensive insurance, then just load up on it when they get a serious illness, the insurance companies will be clamoring for a redo.
- hop 16y agoSon, There is massive opportunity out there waiting for you to seize. Be thankful you were born in America and have the opportunity of free enterprise. Our country has a lot of debt and there will be inflation ahead, and taxes will likely be higher too, but they will be higher for everyone else so don't sweat it - wealth is relative. Be frugal, marry wise and start a business. Take risks now while you are young. The future is bright.
- anigbrowl 16y agoMost prognostications about social security seem to be predicated on a closed demographic system, and take no account of immigration's impact on the ratio of taxpaying workers to retirees. Now would be a sensible time to come to grips with this question, but of course in a time of high unemployment and electoral angst, it's politically radioactive. This is the best analysis of the issue that I've come across, and well worth the reading time: http://www.ssab.gov/documents/IMMIG_Issue_Brief_Final_Version_000.pdf http://www.ssab.gov/documents/IMMIG_Issue_Brief_Final_Versio...
- tapp 16y ago"You shouldn't expect (student loans) for your own kids... You might have to be your own kids’ bank when they need $40,000 for college like you did (they’ll need more)" I believe that's exactly backwards - they should need less total money if that happens. If student loans immediately ceased to be available, couldn't we expect the price of college education to drop in response?
- crpatino 16y agoYes, and no... If no student loans are available, affordability goes down followed by demand. The bottom feeder Universities get wiped out of the map first, but enrollment will fall across the board. If a critical mass of applicants exist to support a reduced University System, a new equilibrium point will be found, and education cost will be cheaper. However, if this is not the case, the only survivors will probably be a handful of Ivy League schools, who will actually raise tuition and cater to the children of the wealthy.
- known 16y agoFounding Fathers of the United States failed to anticipate the Negative effects of globalization and internet.