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Author Topic: Montana: Smaller incomes, lower taxes  (Read 4832 times)

Basil Fishbone

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Montana: Smaller incomes, lower taxes
« on: August 06, 2004, 10:45:06 am »

Putting things in perspective.  I just wish that immigrants like this would understand that it is not cool to let your dogs run loose once you move to an acreage in the country.  They get into all kinds of trouble, and are likely to get shot.  

This article is also illustrative of how incoming city money raises the cost of land and houses.  

Basil Fishbone

http://www.headwatersnews.org/schlaes080604.html
 
Why big skies require smaller paychecks
By Amity Shlaes
The Financial Times

It is summer and I dream of Montana. I dream of Big Sky and Lone Mountain. I dream of Flathead Lake. And I dream of acreage, endless acreage.

This ranch-in-Montana fantasy is a common one for the American male -- and even some females. Dwellers in big, expensive cities know they are missing something that goes beyond a vacation-oriented lifestyle. That something is the greater purchasing power of people who live in cheaper places like Montana.

Their trouble is not merely cost of living, although that is a large factor. It is also a more complicated syndrome we will dub the "San Francisco Squeeze." The squeeze is the consequence of being caught between two things: the high cost of living in big cities on the one hand and the progressive structure of the U.S. tax code on the other.

You need a much higher income to maintain the same style of life in Boston than you need in Missoula or Great Falls, Mont.

But the extra income that represents your cost-of-living adjustment also pushes you into a higher tax bracket. U.S. tax brackets are adjusted for inflation, but they are not adjusted for differences in the cost of living in different places. So a good share of that extra money goes to your national capital, not you.

The Tax Foundation in Washington has a "squeeze meter" for U.S. cities. It started with a simple geographic cost-of-living index. Then it looked at the tax burdens shouldered by those with nominally higher wages in high-cost cities. The foundation found that the progressive rate structure overcharges people who live in high-cost cities while undercharging those in low-cost areas. (The study did not look at state and local taxes, although these also affect after-tax income and relocation decisions.)

The differences are striking. In New York, a married couple needs $159,621 in income to achieve the median U.S. standard of living. That nominal income means the family's effective federal tax rate is something like 20 percent. In Billings, Mont., it takes only $71,501 to get the average American lifestyle. That couple's federal tax burden is merely 10.7 percent. Another example: An income of $132,000 in San Francisco brings you about the same value that you get for a mere $84,111 in Portland, Oregon, also a highly livable port city. But in San Francisco a family pays over $22,000 in federal tax on that income, whereas in Portland they pay less than $11,000.

And, of course, there is Montana, where I can have five bedrooms with a mountain view, a barn, and fields for the dog to ramble across. Montana begins to sound attractive, especially when you consider that for the same purchase price, $525,000, you can get a one-bedroom shoe box, if that, in Manhattan.

The squeeze has a political context. When presidential candidate John Kerry says that he will raise taxes on the wealthy, he is, to a serious extent, targeting the cost-of-living challenged (the squeezed). I got a letter from the wife of a doctor with a practice in an expensive town (Hinsdale, Illinois). A mother of four, she was working towards her nursing degree, but was having a hard time doing it; the taxes plus the cost of living made things a struggle.

But back to the Tax Foundation report. Put most simply, what it says is that in Montana we could have a nicer house than we have in New York and cut back on work, all without sacrificing standard of living.

Montana, here we come.


--------------------------------------------------------------------------------
Amity Shlaes is a senior columnist on political economy for the Financial Times. Her column was contributed by John Baden, chairman of the Foundation for Research on Economics and the Environment (FREE) and Gallatin Writers, both based in Bozeman, Mont.  
 
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Montana: Smaller incomes, lower taxes
« Reply #1 on: August 07, 2004, 01:33:36 am »

Quote
Putting things in perspective.  I just wish that immigrants like this would understand that it is not cool to let your dogs run loose once you move to an acreage in the country.  They get into all kinds of trouble, and are likely to get shot. 

This article is also illustrative of how incoming city money raises the cost of land and houses.   

Basil Fishbone
 
I'm not sure where you live or on how many acres... but on 3 acres in the East SF bay area, (fairly high population) I grew up with 3 dogs, and no fences, and no trouble and no shot dogs....

I can only assume that having even more acreage in some backwoods location would be even more freedom for the dogs...not less   :rolleyes:
« Last Edit: August 07, 2004, 01:34:11 am by username »
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Basil Fishbone

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Montana: Smaller incomes, lower taxes
« Reply #2 on: August 07, 2004, 01:45:05 am »

Quote
I'm not sure where you live or on how many acres... but on 3 acres in the East SF bay area, (fairly high population) I grew up with 3 dogs, and no fences, and no trouble and no shot dogs....

I can only assume that having even more acreage in some backwoods location would be even more freedom for the dogs...not less

I don't have any acreage, but I do know letting dogs run loose becomes a problem when they leave their owner's property and cross over on to the neighbors' property.  It particularly becomes a problem when two or more dogs join up to form a pack.  They commonly chase neighboring ranchers' livestock (which will get them shot right now!), kill their free range poultry, sometimes even threaten or attack people.

In Montana, at least, not only are landowners legally able to shoot marauding dogs if they are harassing or attacking their livestock, but any person who observes a dog chasing deer or other wildlife is legally justified in shooting it, including on public land.

Basil Fishbone

 
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H.M. WoggleBug, T.E.

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Montana: Smaller incomes, lower taxes
« Reply #3 on: August 07, 2004, 05:11:23 pm »

username - I would hardly call that a significant sample size. Also, your 3 acre experience is basically irrelevant to the issue at hand.

City folk who move to the country need to discard just about all their preconceived notions of what rural life is like. Further they need to observe more than average just to see what is going on around them.

I say this as a city person now living in the country. I have 17 acres in the middle of nowhere in Oregon (THE WEST). I have had the sad task to shoot a couple of dogs, including one I knew was my neighbor's. That particular dog was enormous, and chased my daughter screaming into my house. There were other clashes, but a .45 put an end to that.

I have also needed to dispatch several coyotes that were causing problems, too.

Just because you happened to have 3 well behaved dogs, does not mean that free roaming dogs are not a problem. Even today, we have two neighborhood dogs that sup frequently from my dog's dish, They haven't growled at my family, but the first time they do, they will be dispatched, too. Warning shots first, though.

'Bug
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rockchucker

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Montana: Smaller incomes, lower taxes
« Reply #4 on: August 07, 2004, 05:30:17 pm »

Quote
The Tax Foundation in Washington has a "squeeze meter" for U.S. cities. It started with a simple geographic cost-of-living index. Then it looked at the tax burdens shouldered by those with nominally higher wages in high-cost cities. The foundation found that the progressive rate structure overcharges people who live in high-cost cities while undercharging those in low-cost areas.
I'd like to see that. Tried The Tax Foundation, but couldn't find it. Tried Google -- just got multiple copies of that article.
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Ted Nielsen

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Montana: Smaller incomes, lower taxes
« Reply #5 on: August 07, 2004, 08:46:30 pm »

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« Last Edit: September 09, 2007, 12:37:17 pm by Ted Nielsen »
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rockchucker

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Montana: Smaller incomes, lower taxes
« Reply #6 on: August 07, 2004, 09:47:52 pm »

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