The US is in free fall. I tried to tell you.
California has been in free fall for quite some time now.
Actually, the free fall has been reversing recently, and may do so some more after the next election. But this is indeed a despicable outrage.
Also, it still beats North Carolina.
Not for pulled pork, though, probably.
E-mail an apology? They should do it by Skype, at least.
Bye bye California. You were quite impressive for a time... maybe a hundred mild mannered faculty members will reenact Falling Down?
I'm very confused about Direct loan rates. My interest is quite low, but it floats. It was higher than a 5% Perkins grant and is now in the 2% and 3% range (less with the automatic debit discount). I got a new servicer (Mohela) and they provided a table of interest rates based on when your loans were disbursed. The most recent loans are over 6%. Interest rates haven't gone up a lot in that time.
Student loan interest rates seem like a scam. Shouldn't government-guaranteed, non-dischargeable debt be the cheapest money that money can buy?
All they need to be is a little bit cheaper than the second-cheapest to be the cheapest, though.
Shouldn't government-guaranteed, non-dischargeable full-recourse (i.e., they aren't limited to just seizing your beer-soaked memories and diploma if you don't pay) debt be the cheapest money that money can buy?
I'm glad you asked! Yes. (Depending on the government.)
Yeah, but mortgage rates are lower than my student loan rates right now, I think.
Also, I really wish I could get some pulled pork for dinner.
I think the argument was that when the rates were lower, people beat them by investing their money and paying back the loans slowly. This way, the people in debt are left in no doubt over who is being beated.
15.2: why can you? There is a fairly credible barbecue joint in easy biking distance of you. And I think they deliver, even.
beated, beaten, it doesn't really matter. Also, I have a lot of debt now.
I really should figure out the details on buying a house vs. paying back RWM's student loans. It's a little complicated to work out, because it's not just the interest rates but also the affect of a downpayment on mortgage costs.
20: I'd compare buying a house to renting a house. Paying off student loans seems beside the main point there.
My point is that if it comes to a few hundred a month, you are certainly within the margin of error on the cost of buying a house, at least for the next several years.
They changed the rules a few years back. My loans were pegged to the interest rate with a cap at (irrc) 8%, and my sister's are set to 6.5% -- they no longer vary. Interest rates are practically flat, but she won't benefit from that.
20: I would be inclined to say that you should consider how the downpayment will affect the mortgage costs.
I think that the mortgage interest deduction is more generous than the student loan one which phases out over time.
Without doing the math, my gut instinct would be to do a decent-enough down payment that's just big enough to make the mortgage cheaper, max out your retirement accounts, since you're limited in how much you can put in in any given year, have a decent amount of cash set aside (6-months of living expenses?) and then throw as much money as you can at the student loans.
23: I prefer the old system with the cap. But then there was something about rates going down. The Perkins loan at 5% seemed like a good deal, but I paid it all off, partly because the servicer sucked, and I only wanted one payment, but also because it had the highest interest rate. It sucks if I want to go back to school.
Further to 24, and consider life insurance and long-term care insurance.
I don't understand very well what the relationship is between size of downpayment and mortgage costs. Is the idea that to qualify for a nice rate you have to hit some specific minimum? Or is it just that the downpayment decreases the size of the loan?
Both, but I have no idea what the minimum is these days.
I think the argument was that when the rates were lower, people beat them by investing their money and paying back the loans slowly.
That sounds like it would work for a small number of people in a best-case scenario. Is that seriously what the lenders told the legislators in order to convince them that changing the laws wasn't ONLY a giveaway to lenders? What a pile of manure.
Blue Ribbon's is probably the best around here, but Red Bones is reputed to be not terrible, and they have fried pickles. Sadly Blue Ribbon only delivers for catering orders over $150.
Oh, I misread 20. I was assuming that you were planning to buy the house and wanted to figure out how much of a down payment you wanted.
28: I'm about as uninformed on the rule change as one could be, so you probably shouldn't rely on what I said. But I do remember it coming up (people with 2-3% loan interest making more on investments).
29: Redbones is awesome! Their pulled pork sandwich is the only pork product that I still crave (being a vegetarian now).
Student loan interest also caps out if you earn >$75,000 if you're single and >$150,000 if you're married. I don't think the mortgage interest has a cap yet, but they're thinking about adding one.
I should say, the deduction for student loan interest.
I don't think the mortgage interest has a cap yet
I don't think it does but they fuck over* people like me with the AMT, so the deduction loses its value.
*Not really. Actually, after reading about JRoth and Parsi's tax woes, the only solution is bloody revolution in which the rich hang from lamposts.
Ooh, is there a tax thread somewhere? I'm very irritated by my taxes right now. I had to pay taxes for a trust because the financial person controlling it is completely disorganized and because I wound up owing a lot in taxes then penalized me for not paying it quarterly. WTF? I was good for the money, why do they need it quarterly?
I thought that's how taxes always work? If it isn't being withheld from your paycheck, you're supposed to pay quarterly estimated tax installments.
My work income was being withheld, but the trust income came because my grandmother died. I guess I could have maybe planned for that but it would have been hard.
I think the penalty for not paying quarterly is just the interest on what you would have paid had you paid quarterly...
Oh, well that's fair then. I can understand that. I thought they were afraid I was going to skip out on the bill.
I thought the penalty for not paying the quarterly estimated tax applied only if this was the second year you failed to do that. My first year in grad school there was no withholding from the stipend and I paid a large (for me) tax bill, but did not have to pay the penalty.
(Or did I? It probably would have cost them more to determine that than they would have gotten from me if I had been wrong.)
It's pretty reasonable. They also don't charge you any penalty if you're close to right (over 90%) or have paid more in estimated taxes than you'd owed the previous year. I can't quite sort out from the internet whether the "interest rate" that they charge is reasonable or not. One place seems to say it's 3% and another says 9%.
Maybe the rules changed? They owed me money last year so this is my first infraction.
My penalty was about 4% of the total amount owed, so it's not bad at all. But before I had to do the last minute trust thing I was going to get a refund. Waah!
You could just figure how much you owed and have that withheld from your check. Simpler than quarterly payment.
Great idea! And it solves the problem I was having, which is an inherent distrust of mailing in money to the IRS with a flimsy piece of paper and trusting that they'd associate it with my account.
If you're having to make quarterly payments, you should just get an accountant and let them handle it.
My employer has a screwy system where they pay my taxes quarterly. But they based their payments on what they had paid me the previous year, when I only had been working there from September through December. So they were only paying a third of what they should have been. I should have figured this out earlier, but I didn't and it cost me several hundred dollars in penalty....I think the penalty is the equivalent of 8% interest, which is pretty friggin' high, in my opinion.
You should probably talk to your employer about being reimbursed for that.
Tell them some random guy on the internet feels it is unfair. (Also, this to the OP)
I've badly underwithheld this year. I'd planned on catching it up with a big job in October, but then I didn't get paid, and that plan well by the wayside. So, an annoyingly high check. Oh well, I'm employing a seasonal park ranger in Glacier again this year, so the money is well spent. (It's you other people who are paying for aircraft carriers and for diverse persons to be Imprisoned, against Law, in remote Islands, Garrisons, and other places, thereby to prevent them from the Benefit of the Law, and to produce Precedents for the Imprisoning of any other persons in like manner. Cut it out, you people!)
Total federal tax bill a ways over 10% of my gross, not surprising, since I take about a third off gross for business expenses.
You should probably talk to your employer about being reimbursed for that.
I don't have the stones to go head-to-head with my employer's bureaucracy. Somewhere there is a regulation that says I don't get nada, and I'm not ready to spend many months waiting to be told which one it is.
Yes another case, I might add, of why it sucks to be an introvert....
41 seems weird. Did you change the way you paid taxes this year? (E.g. if you paid by hand last year and are paying by turbotax this year maybe the computer is missing the info of what you paid last year and so is miscalculating the penalty.)
52: All the taxes I paid were a result of taxes on a trust that I didn't realize I had to pay taxes on until about April 13th.
Rules for whether you owe a penalty might be different for ordinary salary and for trusts, who knows.
26: From what I've figured out so far in this experience, a larger down payment lowers your mortgage rate and also means that you don't have to buy mortgage insurance once you've crossed a certain threshold (20%, I think).
Taxes on irrevocable trusts are pretty high. Disbursements are taxed at the beneficiary's tax rate.
56 and 26: It would make sens to do 20 down but no more.
Is this where I get to be smug that I did my taxes in February? Weird year (what with getting married and buying a house and so forth), but the results were OK.
Unless my aunt-the-CPA, who assumes that everyone files for automatic extension, again sends me some critical tax documents in May.
56: Right, 20% is the most that gets you a better rate and guarantees you won't need PMI. But there are other games you can play; we got first and second mortgage (as a max conforming loan and a HELOC) such that we only put down 15% but somehow that didn't trigger PMI. I don't actually understand it, but it seems to have worked.
I don't actually understand it, but it seems to have worked.
Was it back when the bankers switched from golf to whippets?
Perhaps Cal can just sell their students to Foxconn. It would be more straightforward, and then the administrators and sports coaches wouldn't have to pay for expensive professors (Brad the Lurker excepted, of course).
36
My work income was being withheld, but the trust income came because my grandmother died. I guess I could have maybe planned for that but it would have been hard.
You aren't expected to see into the future, you can adjust your next estimated tax payment if you receive a windfall.
53
All the taxes I paid were a result of taxes on a trust that I didn't realize I had to pay taxes on until about April 13th.
Depending on the exact circumstances if you didn't receive any money from the trust in 2011 you may not have include it in 2011 income.
45
If you're having to make quarterly payments, you should just get an accountant and let them handle it.
It's not that hard.
62: I'm not an expert on this, in fact I'm afraid to go to California because the last time I was there I found it hard to get drunk while people kept explaining wine to me, but I think the OP is about the Cal State system and you're thinking of somebody at University of California system and that they are different things.
It's Mr. Pibb to the Dr Pepper of Berkeley.
Cal State is no big deal. Only about 400,000 or so students.
66: despite living in this bleak, horrible state (and I'd happily get you drunk without any debourbage of attitude, as it goes, should you find yourself unwittingly transported to the Bay Area), I completely missed that. My mistake, and thanks for the correction.
Perhaps something less than half of the snark is still relevant, I think.
Debourbage = removing the bourbon from?
60: It all has to do with making a loan that conforms to Fannie/Freddie standards, so you can get a lower (effectively subsidized) interest rate. Their charter forces them to require mortgage insurance if the loan is more than 80% of the house's value. (This regulation seemed like a good idea when the mortgage insurers were solvent, but turned out to be totally useless in limiting the GSEs' risk exposure.)
Keeping the first lien under 80% makes it eligible for delivery to Fannie/Freddie without mortgage insurance, so you get a better interest rate than a non-conforming loan. They don't really care if you take out a second lien on top of that, as long as the total is still within their risk tolerance.
Some people with several-million-dollar properties will still take out a first mortgage equal to the exact max Fannie/Freddie are allowed to lend, in order to get the lower interest rate, and then take out a second lien that may even be bigger than the first, for the remainder. You're basically following the same strategy.
I really did like the Bay Area. I get pedantic when the blog slows down.
70 :Decanting technique with white wine. But let's not talk about that, it was a dumb metaphor.
To completely distract, what does the mine shaft think of this sort of thing?
I didn't know white wine was supposed to be decanted. I'd decant the red I usually drink, but I don't think I can drink the whole box in one night.
You'll never make it as a Republican lawblogger, Moby.
All my legal knowledge is 2nd or 3rd hand.
I'm not sure how that works, qualification-wise, here.
I like the current symmetry of the Complainionship and Also Outrageous threads. I think no one else should comment on them, so they can be preserved in their perfection like insects in amber.
If you care about art, beauty and brevity, you will refrain.
On preview, ruint!
80: Trying to keep the Mineshaft from complaining is a fool's game.
I am admittedly liking the implication so far that we are collectively more interested in complaining about static electricity than about police brutality.
I got a degree with the help of those grants -- it was not terribly long ago, and tuition was much, much lower. I was astonished to see how it had risen in the last 5 years, and now this news... if I had been a few years younger, or slower to go to grad school, my life would be pretty different now.
Actually, the free fall has been reversing recently, and may do so some more after the next election.
I can see how it can appear this way, but as I watch a nearly 2/3 Democratic legislature carve away one piece of the safety net and education system after another, every year a crisis calling for more "sacrifice", I don't see trends reversing. So much has been cut to the bone already - Medi-Cal rates to physicians 4th-lowest out of all states! - that even Dems getting a full two-thirds will, I think, at best fix the horrible new normal in place.
I think the argument was that when the rates were lower, people beat them by investing their money and paying back the loans slowly
This sounds like something the government should be encouraging and does in other contexts, like the Small Business Administration.
Somehow reading the last 20 or so comments with an Irish accent and a dour tone seemed to make it all make more sense.
I think the argument was that when the rates were lower, people beat them by investing their money and paying back the loans slowly
Well, this is a stupid argument, because it is being made by people who don't understand the concept of risk-adjusted return. Someone who took their student loan and put it into stocks in (say) 1999 will not have "beaten" anyone.
I'm sorry if that sounds a bit dsquared, but really.
84: About 10 years ago UC Davis's student health center stopped accepting MediCal.
I had not read the linked article but just found out that subsidized loans for graduate students are no longer available.
81: 80: Trying to keep the Mineshaft from complaining is a fool's game.
Certainly, but I was pleased to come up with a way to attack the monopoly of front page posters on top-level content. Now it's all about monetizing the Unfogged commenting experience.
Have you noticed that DeLong has started calling his posts, "Ask the Mineshaft"? Does he pay royalties?
JP Stormcrow
91: That has just got to be illegal. He knows better. Surely he will claim homage.
91, 93: no, by not using the proper collective term for his own readership, but using the proper term for this readership, he is signalling that he wants us to answer his question, not his usual readership. Given that he posts class related stuff on his blog, though, the whole thing is an elaborate ruse of some kind: his students will have looked at the questions, and seen that some among his commentariat have provided answers to the questions (which is definitely not responsive to the question)*, and use that in their exam prep. Only to find that the actual exam includes nothing even remotely like these questions.
* This is why he wants us to respond, not his usual readers. They're doing the math. We would tell food stories and give dating advice. Which is way better and far more useful than a good grade in a pseudosubject that pretends to be Science but is actually a branch of Theology.
I'm actually sort of surprised by someone online with a real name drawing a tight link between an anonymous-anal-sex joke and their undergraduate teaching. I guess tenure really does free one from all social restraints.
It really does fit better with graduate instruction.
Graduate school, the Royal Navy, and Unfogged share many folkways.
99: when they aren't busy with the other folkways.
I am admittedly liking the implication so far that we are collectively more interested in complaining about static electricity than about police brutality.
In the Mineshaft's defense, we had at leads a couple threads about the Davis thing, but I can't remember the last time we had a good static electricity throwdown.
96: Didn't he only recently learn why it's called the Mineshaft? Perhaps his brain wouldn't let him store knowledge that disturbing.
This is the closest thing we have at the moment to a tax-related thread, right? If so, then I'd like to say that this stopped clock has had its day: Yglesias is completely completely right about something for once.
for the vast majority of the population, most of the pain of tax compliance could be eliminated by a few keystrokes at IRS headquarters. So why don't we do it? Two reasons. One is lobbying by the tax preparation industry to discourage states and the feds from developing easier tax-paying systems, as California recently did. The second is lobbying by anti-tax conservatives. When the Golden State implemented its ReadyReturn system, it did so over the objections of Grover Norquist and his anti-tax pressure group Americans for Tax Reform, which fears that if taxes become less annoying voters might be less unhappy about paying them.
103: It seems like people who qualify for that already have a ridiculously easy return. Nobody with more than one job qualifies.
103: It seems like people who qualify for that already have a ridiculously easy return. Nobody with more than one job qualifies.
There's no inherent reason why that should be the case though. In the UK, people with multiple jobs are still in the PAYE system. Obviously self-employed people are always going to have a more complicated process, though.
I was way ahead of the game on taxes this year, but have nonetheless managed to spend the last couple days thinking about next year's taxes. Namely where am I "moving" and when. (Our current jobs end at the end of May, our lease at the end of June, but we're not actually going to our new pemanent location until Jan 1.) I think we'll move to my parents house legally on June 1, but it takes some sorting out to figure out what that means. (E.g. I think we'll actually pay them some very small amount of rent and one/or one of their utility bills, get new driver's licenses, and change all our mailing then.) Matters both for taxes and for where we buy temporary health insurance.
105: I totally agree. I just think that that particular tool is pretty inadequate. The people I know who are low-income and complain a lot are musicians, because they have so many different jobs and then they start deducting things like their black clothing as a business expense. They kind of dream of getting a job with witholding that would owe them a return so that they won't owe too much when they get around to paying their taxes, because they never have the money put aside.
One of Yglesias's links says that CPAs, attorneys and EAs are exempt from certain rules. Does anyone know what an EA is?
106: I'm surprised you'd bother getting new driver's licenses for less than a year, unless they expire during that period or the new job, old job and parent's house are in three different states or something. For proof of residency, I go with utility bills, but for proof of ID a non-current driver's license is still valid, and I don't need to prove residency too often.
The other link refers to enrolled agents, but I don't know who they are either.
Yes, new job, old job, and parent's house are in 3 different states.
I should probably hire a tax accountant for next year, because things are going to be very complicated (most likely we'll be residents of two different states, earning money in three different states and a foreign country, having income from payroll, one domestic fellowship, one foreign fellowship, and self-employed income). But since it's a bunch of obscure stuff, I'm not really very confident that a randomly found accountant will actually know how to deal with it all.
After my tax-filing triumphalism of the other day, I ended up filing a Federal extension due to gross incompetence and being a general fuck-up plus bad intra-family tax coordination. I was sitting at a concert feeling smug when I checked e-mail at intermission and saw the e-file rejections*. Sigh.
*PA's reason was because the Feds rejected it, despite the actual issue not being applicable to state taxes (they did accept it the next day). But I will say that my observation over the past 5- or 6 years (with regard to my taxes as well as others') is that the IRS software/process, inefficient and over-priced though it probably is, has increasingly begun to find various kinds of inconsistencies.
The Canadian process, for someone with no income, is more complicated than the U.S. and yet taxes are higher. Maybe if I made more money, I'd think the Canadian system was more complicated. Because I'd hire someone.
Actually, tax assistance clinics here are pretty good. I might get the refund I didn't get the last couple of years because I failed to file those years this year.
Seizing a dead, somewhat relevant thread, I'm curious what people think of this interview. His first six answers in particular seem exactly right.
Not as dead as I thought, I guess.
Just in case bob isn't worried enough, apparently Obama has eaten a dog. I didn't click through the headline, so I'm going to assume Obama ate the dog this week because reporting on something like that from decades ago would be far to pointless for the media.
I bet Obama ate the dog that was strapped to the roof of Romney's car.
I'm going to assume you mean Buddy Ebsen.
117: When he was living in Indonesia, so some point between 1967 and 1971.
Then how was Barnaby Jones filmed?
115:Thomas Palley is one of the good guys, solid Post Keynesian, with good books on neo-liberalism and financialisation. Good blog. Helped me understand what Volcker did to us circa 1980, money supply stuff in addition to interest rates
Am I the only one who is disappointed that the Tupac thing wasn't a lasers-and-virtual-images Geordie LeForge style hologram but instead weaksauce Haunted Mansion Victorian tech?
Because Tupac deserves to fight Picard, is what I'm saying.
121: Wait, did you just say that when Obama was studying in madrasah in the town where he was born, he also ate a dog? That's outrageous!