Been Cold and Rainy in the NorthEast
It’s not going to come as much of a surprise to those in the Northeast about my first topic of conversation - it’s been cold, and it’s been wet. 50’s, windy, and a lot of rain. Memorial Day was punctuated by a circling cold front that dropped showers throughout the day. Today, Monday, it appears that maybe we’ve turned the corner into seasonality.
I can tell it’s been raining not so much by an interruption in construction activities, but in my leisure - no community bike rides in 2 weeks (typically Mountain Bike Mondays and Road Ride Thursdays), no pickleball, hard to sneak a walk in, my pool can’t get above 60 degrees, my garden is wilting and yawning for the sun, sweaters still lay about the house, the house heat keeps kicking on.
I’ve said it a few times this weekend, and I don’t know if it’s a sign of getting older, but I keep finding myself repeating - “Glad I’m not camping this weekend”. I get why I’m thinking it: lots of camping on the weekends up here on the Delaware River Valley, and it’s been chilly, and wet, so less than optimal for an activity that can counterintuitively raise the stress levels rather than reach a state of ‘nature calm’ - let’s just take everyone out of their element, give them poor wifi, substandard shelter, damp clothes, and a lot of new skills to learn and have a great weekend. I don’t know why I’m thinking about camping, and the near miss of not camping this weekend, since I don’t really camp. Maybe I’ve camped 20 times in my 40 years of camping age range.
My new project on my property, the pickleball court, is on the home stretch (not to mix sports analogies). Garden is planted, pool is up and running, yard is dethatched and green, garage cleaned out, and the big landscaped bed weeded.
Found this 1972 classic while organizing my garage.
I’ve ruminated before, I don’t think on these pages, but before in my mind, about the unfairness of the tax system when it comes to single earners rather than married filing jointly. Sure, when both adults are working, and the household income is higher because of it, sure, that makes sense to offer a higher level income for certain tax rates and breaks. But there’s lots of situations in modern family life where a single earner has a family, has all the expenses of a household, and the tax code treats them as if life is cheaper as a single, which is hardly the case. In fact, in many situations, spreading the costs of running a household over 1 person is more expensive than for more than one. There are economies of scale to everything from dinner prep to laundry to heating the house.
For instance, I own a home, raise a kid, have 2 cars, a pet, and everything else that one needs to run a household including utilities, insurance, house maintenance, etc..., there’s only one income, I’m not married, and I’m taxed like somehow my life is cheaper to operate than a married couple. Seems to me there should be a caveat in there somewhere - like if only one person works in a married arrangement, why should they get dual income credits? Currently a married household gets a ceiling of $500k for joint filers and a single person $250k. That $250k difference results in $80k more taxes withheld for the single person household.
And similarly for single earners, if they have kids, or own a house, or some other real expense criteria, you should get the lower tax rates (or more accurately, higher income level ceilings). It should be less about your marriage status, and more about your life obligations - like does your mortgage, real estate taxes, child/support and alimony, and perhaps a few other inputs add up to a certain percentage, and if so, you get a higher ceiling. I already see a few flaws in my plan, but the tax code is complicated so I’m sure they could figure it out. Also seems unfair that high costs states and areas get the same federal ceilings as low cost states, since it’s hardly unfair to argue that $200k in Kansas is a lot different than $200k in Boston. Seems unfair that single-earner households - arguably operating on less stable footings than a dual income family since any inability of the single earner immediately threatens the whole structure -seems unfair at the assumption that running a life as a single person is 50% cheaper than as a married couple. Though who knows - maybe when the idea was introduced, it was thought to be a motivator to get married?
Our house we are building in Parksville.
The SALT tax debate at the federal level has been interesting to watch, as Mid-Atlantic states, particularly NJ, NY, CT and MA, dig in to restore a higher deductibility of state and local taxes from federal tax obligations. With real estate tax bills easily reaching $20k or a lot more in many places, the limit of $10,000 passed in 2017 was a real and true financial blow to many families. Sure, many could afford it, but many affluent families live far beyond their means, so a new $10k, 20k, $50k tax can be a big deal. $45k in real estate taxes deducted off your fed return - here’s the math - $45k deduction, 37% tax bracket - was a real $20k tax savings, but at $10k cap, is now a $4k tax savings. A $16k out of pocket swing. Chump change to some, a real hit to others as that amount is 2 car payments, 50% of room and board, the cost of raising a kid for a year. So anyways, they are holding up the big beautiful spending bill because of this issue, and I’m really not surprised - it was a big deal when it was passed, and it’s a big deal now.
New long overdue railing heading down to the pool -
Turns out for ‘pass-thru entity’ people - those with C corps, S corps, LLC’s etc - the law in 2017 introduced a lot of changes, but when push came to shove, there were new loopholes -intentional or not no one really knows - that resulted in my tax bill (nearing 40-45% for the majority of my income) more or less the same - calculated a lot different with credits and debits being pulled from new places, but in the end, about the same owed. The same can’t be said for W2 workers, or those without the flexibility of business deductions - the W2 workers, as always the case, have nowhere to hide from tax code changes.
It’s been raining but we keep cooking along, with 4 homes under construction and moving at a quick pace. Being less busy, and being highly skilled at my job, I’ve found my tangible effectiveness notching upwards - I mean, I’m always pretty effective, but when you are drinking through the fire hose of productivity challenges cause you are building a dozen houses at a time, the effectiveness gets watered down if only because there are more problems to solve, your time to solve them remains the same, so your effort and attention per problem is reduced. Allowing time to zero in and dedicate the time to each, leveraging a lot of knowledge and experience, makes most problem fixes a lot more certain.
A few examples of sticky situations that only good and effective strategy and communications can counter - Alps Airbnb host trying to charge us $2k for a cracked picture window, local electric company asking me to come 2 miles for electric service rather than tapping the transformer 200 yards away, a few employment related matters were resolved in my favor, a successful appeal of the assessment levels of my homes in Fremont NY saving my families up there a bunch of money on their annual taxes (as well as preserving their resale levels since every dollar in annual real estate taxes is a blow to the ultimate value of a home), - there were a bunch more but I can’t think of them. I think one thing that is happening for sure is I’m just walking away, or quickly resolving, tasks and situations that may have principle at stake, but not business advantage. Letting some of that go can save a lot of mental resources and have the time there just really is no point to chasing the principle - to prove what, to whom, exactly?
I handed out (10) $1250 scholarships for Delaware Valley High School seniors for a scholarship I titled EZ Money - A financial literacy seminar. They had to apply, they had to write an essay and they had to attend a 2 hour seminar I led, which I used up most of my time talking about debt, and how to avoid it. And next Wednesday I present the funds at scholarship night. We had 21 applicants for 10 slots, which the scholarship coordinator at the school thought was pretty awesome especially since of all the strings attached to the award. To me, it speaks to the thirst for real financial guidance that people just don't have access to.
