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What Would You Give Up To Cover Your Tax Increase?

Monday, December 17, 2012 - 8:14 AM
The White House says a "typical" family of four would see a tax increase of about $2,200 if the country falls over the fiscal cliff. So what, exactly, would you do if you lost more than two grand in income over the course of a year?

What would you give up to cover your tax increase? | Interest.com

 
3
ShorebreakShorebreak2,376 posts since
Apr 6, 2010
Rep Points: 12,691
1. Monday, December 17, 2012 - 10:16 AM
Stopping some subscriptions, eating out less, spend less on entertainment.  Also looking for opportunities to generate income. 

But Maybe when people start to feel the pinch they will demand the Gov't start some serious pinching as well.  Social programs can not continue at this level.
4
ChrisCDChrisCD66 posts since
Nov 18, 2010
Rep Points: 409
2. Monday, December 17, 2012 - 11:11 AM
ChrisCD, I think those areas you mentioned are good places for people to start looking when considering cuts in their personal budget.  And of course, generating additional income is the other side of the equation.

On the topic of demanding government do some serious pinching, I think "we the people" have been asking that of our government for some time.  The problem, however, is (at least) four-fold:

a) There is no universal agreement on where to cut spending.  Many people say they want spending cuts but not in (insert name of favorite government program) where they/their loved ones will feel the pinch themselves.   It's a variation of NIMBY ("not in my back yard") - every government program is important to someone.

b) Our elected officials are unwilling to make spending cuts because they are unwilling to alienate constituents or special interest groups.   Make no mistake - the priority of our elected officials is to be re-elected.  The days of  "ask not what your country can do for you, ask what you can do for your country" are history.  Spending cuts as a result of sequestration, which happen by default, aren't the result of a  deliberate decision or a willingness to take and defend a position. 

c) Our elected officials generally don't feel the pinch themselves. 

d) There are no "real" consequences to exceeding government budgets - the printing presses are fired up and voila - budget problem solved.   If only it were that easy in our personal budgets.   
 
7
pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
Rep Points: 5,955
3. Monday, December 17, 2012 - 2:59 PM
Chis:  What subscriptions?  What entertainment?  Is the Dollar Menu at McDonalds considered "eating out".  Just a note:  Wendys has a Dollar Menu and seniors get a FREE drink!  Guess where we eat out! :)
3
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,104
4. Monday, December 17, 2012 - 3:35 PM
Paoli2:  Yes the Dollar Menu is considered "eating out".  Since you could eat oatmeal (w/ water not milk) at home for much less, even the Dollar Menu could be deemed frivilous in these times.  :O)

Subscriptions would include magazines, gym (I don't have one), websites, etc.
3
ChrisCDChrisCD66 posts since
Nov 18, 2010
Rep Points: 409
5. Monday, December 17, 2012 - 4:52 PM
ChrisCD, I think those areas you mentioned are good places for people to start looking when considering cuts in their personal budget.  And of course, generating additional income is the other side of the equation.

On the topic of demanding government do some serious pinching, I think "we the people" have been asking that of our government for some time.  The problem, however, is (at least) four-fold:

a) There is no universal agreement on where to cut spending.  Many people say they want spending cuts but not in (insert name of favorite government program) where they/their loved ones will feel the pinch themselves.   It's a variation of NIMBY ("not in my back yard") - every government program is important to someone.

b) Our elected officials are unwilling to make spending cuts because they are unwilling to alienate constituents or special interest groups.   Make no mistake - the priority of our elected officials is to be re-elected.  The days of  "ask not what your country can do for you, ask what you can do for your country" are history.  Spending cuts as a result of sequestration, which happen by default, aren't the result of a  deliberate decision or a willingness to take and defend a position. 

c) Our elected officials generally don't feel the pinch themselves. 

d) There are no "real" consequences to exceeding government budgets - the printing presses are fired up and voila - budget problem solved.   If only it were that easy in our personal budgets.   
 

pearlbrown: "Spot on" analysis! "If only it were that easy in our personal budgets" - you can say that again!
3
WilWil242 posts since
Feb 26, 2010
Rep Points: 1,281
6. Monday, December 17, 2012 - 5:05 PM
I've noticed since hard times are looming that those organizations asking for donations (Law Enforcement and Firefighter Benevolent Associations) along with the usual others have stopped calling.....that's a good thing. As to eating out.....quit that a long time ago when what you got stopped looking like what was on TV. Next on the cutting block will be Cablevision. I'm pretty close to the poverty line now.
4
klinkklink85 posts since
Dec 8, 2012
Rep Points: 228
7. Monday, December 17, 2012 - 11:58 PM
Wil,well OK, I'll say it again.  "If only it were that easy in our personal budgets".  ;-)

Klink, you are right, they have stopped calling.  I just thought it was because I never answered (thank you caller ID).   No doubt about it, all of us on a fixed income have had to (and continue to ) adapt to a new way of living defined by a lot of economies in just about every area.  My "new normal" resembles in many ways life as it was in college and then when starting my first job.  I prefer to see it in that light, and if I could do it once, I can do it again.   

Like you I eat out rarely, as I enjoy cooking and prepare healthier and better at home.   Cable TV?  I gave it up 7 years ago, and no longer watch TV at all, as there is little of interest for me.  Friends are kind enough to record SNL (which is the only thing I miss), and I watch it when babysitting at their home.  Subscriptions, books and movies?  As an avid reader and movie buff, I appreciate that my local library is an excellent (and free) source of new releases in both books and movies.   If I want to read something which is not in their catalog, they arrange an inter-library loan.  Entertainment?  A group of us meet every month for potluck and Game Night, and we have a lot of fun for little money.  Spending time with my family is a priority, and costs nothing.  By volunteering at a local theater I see a performance for free.  Gym membership?  An hour of brisk walking around the neighborhood is free, and as bonuses I enjoy fresh air, and see many of my neighbors.   An hour of gardening also yields health benefits and tasty produce.  All things considered, it's far from a bread-and-water existence, and in fact it's rich in the things that matter most. 

Nonetheless, there are practical matters which are never far from my mind.  With interest rates so pitifully low, like so many others I have had to invade principal, which is a huge worry.  There is some room to cut discretionary expenses, but not much.  There is no relief in sight on rates, but a huge looming tax increase instead.   All I can do is continue to look for further economies and opportunities to increase income, stay optimistic and hope to hang on.  
6
pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
Rep Points: 5,955
8. Tuesday, December 18, 2012 - 12:29 PM
It just dawned on me.  What is there left to give up these days?  We have basic cable and a cellphone for emergencies to keep in touch with our DD but other than that we live basically live like the cavemen except we don't have the luxury of a nice big cave! :)
2
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,104
9. Tuesday, December 18, 2012 - 5:30 PM
Unfortunately the Year-to-Year Inflation,  1.8% (CPI-U), 1.7% (CPI-W), from the government is unrealistic. It's actually closer to 9.4% Shadow Government Statistics - Home Page
Far from currently living like a monk, a significant tax increase would cause some rebudgeting in the Shorebreak household. My largest annual expenses in descending order are federal income tax, property tax and insurance. Those are hard to cut back on so we are left with utilities, food, gasoline, home maintenance, travel and entertainment. I would start with easing-up on the travel and entertainment first. Then I would take measures to reduce utility and gasoline expenses. Home maintenance is variable so I can't anticipate leaks or mechanical failure. If I'm down to reducing food expenses then we are really in a world of hurt.
2
ShorebreakShorebreak2,376 posts since
Apr 6, 2010
Rep Points: 12,691
10. Tuesday, December 18, 2012 - 8:12 PM
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2
pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
Rep Points: 5,955
11. Wednesday, December 19, 2012 - 7:36 AM
Post edited to:

Even before the prospect of additional taxes, this family of one was already planning to (reluctantly) reduce donations and a couple of other expenses to offset the likely replacement of at least one 20+ year old major appliance next year.  (Scratched-and-dented department, anyone?).    Whatever the additional tax turns out to be will be covered by virtually eliminating donations altogether and slashing a couple of other personal categories as needed. 
2
pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
Rep Points: 5,955
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