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Yes, the west coast
Yes, the east coast
No, other state in USA recommended
No choose Costa Rica
Retire in Europe is better

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Cannot draw any conclusion from the poll, as the answers are too few as at 14 June.

hagge
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Author: hagge Date: 6/14/01 10:39 AM Number: 6909
Cannot draw any conclusion from the poll, as the answers are too few as at 14 June.

I think the problem is that most people don't know anything about ex-pats or what kind of taxes they must pay. My parents retired to Florida 25 years ago, and I've come to know quite a bit about retirement there.

Florida is a great place to retire for an American citizen. They don't have a state income tax, and the whole place is geared to people over 60. The climate is warm and humid nearly all year long - something that most older folks like.

Health care is top notch and is optimized for the elderly. All the doctors and hospitals are well equipped to handle the numerous problems associated with aging and with all the health plans as well.

One downside in Florida is the 'intangibles' tax, that is levied against your bonds/equities portfolio (not your cash). If you are wealthy, and have a big portfolio, you'll pay a lot of tax.

Other taxes (sales, property, etc) in Florida are quite reasonable for the retiree.

Russ
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Of course, 'a lot of tax' is relative. But, it works out to less than $1000 per million dollars of taxable assets (not all assets are taxed).

Been a good deal for me after paying income taxes in Ohio for a while!
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Florida's Intangible tax is not really a problem. I think it is 1% of assets after a certian amount. They are even talking about repealing it.
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saml72933 writes,

Florida's Intangible tax is not really a problem. I think it is 1% of assets after a certian amount. They are even talking about repealing it.

Here's an article about the Florida intangibles tax. It hasn't been repealed, but they have increased the limits, so it applies to fewer people.


http://www.orlandosentinel.com/news/local/orl-loc-tax061401.story?coll=orl%2Dhome%2Dheadlines

intercst
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<1% of assets after a certian amoumt>

Correction-- It is 1/10 of 1% of assets.

Still no problem.
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Author: saml72933 Date: 6/17/01 12:42 PM Number: 6927
It is 1/10 of 1% of assets.

Still no problem.


Let's analyze this a little.

Assume your 1/10th of 1% is accurate and you have $1,000,000 all in equity assets.

You can draw 4% of this, or $40,000 per year and be fairly sure you're not going to run out of money for at least 30 years (based on historical market performance).

Your intangible tax would be 0.1% x $1,000,000 = $1000.

That means your intangible tax is 2.5% of your original yearly withdrawal, and you can now only withdraw $39,000 per year to live on.

Now, assuming you derive your $39,000 from long term capital gain sales of equities, your federal income tax on the $39,000 will be $2605 (based on 2000 rules).

That means that the intangibles tax is 38.4% of the federal income tax.

I guess I consider this intangibles tax substantial.

Russ
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rkmacdonald writes,

Author: saml72933 Date: 6/17/01 12:42 PM Number: 6927
It is 1/10 of 1% of assets.

Still no problem.

Let's analyze this a little.

Assume your 1/10th of 1% is accurate and you have $1,000,000 all in equity assets.

You can draw 4% of this, or $40,000 per year and be fairly sure you're not going to run out of money for at least 30 years (based on historical market performance).

Your intangible tax would be 0.1% x $1,000,000 = $1000.

That means your intangible tax is 2.5% of your original yearly withdrawal, and you can now only withdraw $39,000 per year to live on.

Now, assuming you derive your $39,000 from long term capital gain sales of equities, your federal income tax on the $39,000 will be $2605 (based on 2000 rules).

That means that the intangibles tax is 38.4% of the federal income tax.

I guess I consider this intangibles tax substantial.


I suspect there are few places with state income taxes that would charge less than $1,000 in taxes on a $40,000 income. It's probably true that the Florida intangibles tax is less than the state income tax elsewhere for all but the wealthiest retirees.

You really need to look at all taxes, (i.e., real estate, state income taxes, sales taxes, vehicle taxes, etc.) to decide whether a move to another state will raise or lower your tax burden.

intercst
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I guess from an Swedish expatriate point of view the taxes on intangible assets, as indicated on the board, are really very low.

Should you like to give a more general opinion about retirement in Florida you could read my message on the board 'Retirement as an expatriate in USA' (No. 6931).

Hagge
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Author: intercst Date: 6/17/01 9:14 PM Number: 6929

I suspect there are few places with state income taxes that would charge less than $1,000 in taxes on a $40,000 income. It's probably true that the Florida intangibles tax is less than the state income tax elsewhere for all but the wealthiest retirees.

You really need to look at all taxes, (i.e., real estate, state income taxes, sales taxes, vehicle taxes, etc.) to decide whether a move to another state will raise or lower your tax burden.


I agree. At the beginning of this thread I made the comment that Florida is a really good place to retire.

I just don't like to ignore the intangibles tax. To me, taxes should be associated with something you do or purchase; not an arbitrary confiscation of your savings - money that you've already paid taxes on.

I'm working with FL Republicans to abolish it. I'd rather see spending cuts but even an increase in the state sales tax would be better than the intangibles tax. At least sales taxes spread the tax burden around to everyone equally.

Russ
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At least sales taxes spread the tax burden around to everyone equally.

Russ


Harrrumph! I have seen this argument several times before, and it is not really true.

Suppose a person has an income of $1,000,000 a year, but saves 2/3 of it and lives on $333,333.33 a year. Further assume all of this is taxes as sales tax at 6%. This person pays .06*333,333.33 = $20,000 in tax, or 2% of his income.

Now suppose a person has $10,000 income, but spends all of it to live. He pays $600 in tax, or 6% of his income.

Do you really believe it is fair for a poor person to pay 6% tax while a rich person in the same state pays only 2%????

regards
Maj. Hoople
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<Harrrumph>

This has been discussed on the Tax Reform board at length and I really don't want to get into a dust-up here, but--

Do you really think the difference between $20K and $600 is that much out of line?

The fairness here is a sales tax assures that ALL will pay at least some taxes as opposed to the middle and upper income class paying all the freight, as is the case with our national tax code.

Everyone in this country should be willing to pay something to provide for the freedoms our nation provides for them. There should be no free lunch in my opinion.

Florida's sales tax provides such a system and I, for one, like it that way. You pay your few pennies with each purchase which is not painful. April 15 is no different from any other day of the year.

Our national income tax, which is a dinasaur and a morass, should be scrapped and a national sales tax adopted in its stead.

End of rant.

Sam
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Everyone in this country should be willing to pay something to provide for the freedoms our nation provides for them. There should be no free lunch in my opinion.

BRAVO! BRAVO! BRAVO! Why do we have such a hard time understanding that their is a price to pay for freedom? Happy trails...rclyde
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Author: MajorHoople Date: 6/21/01 1:42 AM Number: 6937

*** Off-Topic ***

Suppose a person has an income of $1,000,000 a year, but saves 2/3 of it and lives on $333,333.33 a year. Further assume all of this is taxes as sales tax at 6%. This person pays .06*333,333.33 = $20,000 in tax, or 2% of his income.

So what??? This person has obviously worked very hard, is a high achiever, and is very fiscally responsible. This person will never be a burden to society, and is someone for kids and adults alike to look up to and to emulate. This is certainly not a person who should be penalized with excessive taxation for this success! Hasn't this person achieved the American Dream?

Now suppose a person has $10,000 income, but spends all of it to live. He pays $600 in tax, or 6% of his income.

Then, I say shame on this person! This person is not a high achiever and will very likely become a burden on society in the future. This is a person who needs a kick in the butt, and not be rewarded with lower taxes!!

Do you really believe it is fair for a poor person to pay 6% tax while a rich person in the same state pays only 2%????

Yes, I do!! I believe that everyone has an equal chance to become wealthy if they work hard enough, and smart enough, and make the sacrifices that are required (except for a very few legitimate exceptions, which society does have a responsibility for). This 'poor' person you described is most likely earning low wages by choice. This 'poor' person simply does not want to put in the 80 hour weeks that it takes to achieve wealth. Why should this poor person pay less in taxes and shift his share of the burden to the person who IS willing to put in the 80 hour weeks? Is that fair?

If you want to examples that anyone can make it with hard work, just take a trip to the local cleaners and observe the Asian imigrant family working long hours for very meager wages. These are people who are living below their means and willing to do what it takes. Guess what? Someday this family will be filthy rich - and all the liberals will be trying to get their money. Is it then fair to take away what they worked so hard for - to pay for those who are not willing to work that hard?

Russ
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Do you really believe it is fair for a poor person to pay 6% tax while a rich person in the same state pays only 2%????

Well, I couldn't tell you, because I'm not rich. I would be more than happy to find out, if anyone is willing to donate several million dollars to my favorite charity.
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Not all rich persons are high achievers. Many of the richest get money by illegal means but have not been caught yet or escaped by hiring politicians and crooked lawyers. There are others who win a lottery or its equivalent which does not require any achievement.

With hard work one may be able to live comfortably but in order to be really rich you have to be very lucky or dishonest.
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With hard work one may be able to live comfortably but in order to be really rich you have to be very lucky or dishonest.

At the risk of sounding corny, I know a few folks who are quite rich and who have very little money. Many of the rich folks I know don't seem to be very happy people. They work all the time, have screwed up families, seem to be worried and stressed out all the time, don't seem to ever enjoy anything, and die at much too young an age.
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ResNullius said: Many of the rich folks I know don't seem to be very happy people.

I agree but I never claimed that they were necessarily happy. I only said that they live comfortably.
My main point was that in order to be rich you do not have to be very hardworking or a genius but must be either very lucky or very unscrupulous.
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My main point wat that in order to be rich you do not have to be very hardworking or a genius but must be either very lucky or very unscrupulous

The foundation or self-reliance is hard work! One is not rich by how much money he has or how many toys he has, that is physical wealth.

A truly rich person is one who has loved ones and knows how to serve others. We only truly know how to live, if we know how to share our life and our possessions in service to others.

If I'm following this thread right, the Florida tax seems to be a consumption tax (i.e. the wealth man in the example saves most of his money and thereby pays less tax, percentage wise.) Our discussion seems to leave out that those who save, are adding investment funds into the system, which adds to economic growth and helps all of us.

Happy trails.....rclyde
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the Florida tax seems to be a consumption tax
On the contrary. It is a tax on your savings and not your income just like property tax for schools etc.
You do not pay out of your current income but out of past savings i,.e. out of you old income. You may have to dispose off your asssets if you do not have enough current income to pay this tax.
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uppose a person has an income of $1,000,000 a year, but saves 2/3 of it and lives on $333,333.33 a year. Further
assume all of this is taxes as sales tax at 6%. This person pays .06*333,333.33 = $20,000 in tax, or 2% of his income.

So what??? This person has obviously worked very hard, is a high achiever, and is very fiscally responsible. This person
will never be a burden to society, and is someone for kids and adults alike to look up to and to emulate. This is certainly not
a person who should be penalized with excessive taxation for this success! Hasn't this person achieved the American Dream?

<< BULL>>

What about all the trust fund babies and drunken Kennedys living in Florida? What dream have they realized? Hard work smuggling booze by papa Joe? Not everyone aquires wealth by working for it. Bravo to those that do, shame on those that don't.

On the other hand, if you are paying 20k in sales tax then you are paying 24 times as much tax as the guy paying $600. Should you be entitled to 24 times the benefits for the tax you pay? Why not? Clearly you are a more valuable contributor to society than the guy only paying $600.
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<24 times as much tax>

Actually, it is 32.33 times as much tax.

Another way to look at it, the $20K guy paid 3233% more taxes that the $600.00 guy. Is that enough difference? Or you think it should be more?
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I don't understand the thinking of those that are envious of wealth and assume that those that have it must have gotten it by some illeagle means or inherited it!

Although there are those people we should not punish those who do make it on thier own by confiscation of what they have built.


I think that young people starting out with nothing are naturally liberal minded.

If they work and save for their future they become independent

As they achieve comfertable living status they become conservitive.

When they become " RICH " they can afford experts to manage their wealth to protect it from the liberals they tend to return to thier liberal beginings.


I owe my retierment comfort to a wife that managed our income well.

After my last child graduated from college and got married we lived on
less than 33% of our combined income with taxes (local, state and fed)
= 33%. Investments got the remainder ( IRA or 401K and other stocks and funds)

Because of or in spite of investment decisions (or great luck) my investments now exceede our total life time salary.

Study investment theory and KNOW the company that you are investing in.

It dosen't take hard work or dishonesty if you stick to what you know.

LOL
Zyaw
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Author: 67ranchero Date: 6/26/01 4:50 AM Number: 6967
What about all the trust fund babies and drunken Kennedys living in Florida? What dream have they realized? Hard work smuggling booze by papa Joe? Not everyone aquires wealth by working for it. Bravo to those that do, shame on those that don't.

Depending on how you define 'wealthy' you may be right. However, the number of people with $5 million or more net worth in the US is dominated strongly by those who have earned it themselves. The number of 'trust fund babies and drunken Kennedys' is probably less that 0.01% of the $5M+ crowd.

Russ
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