Tax Holiday 2009

[Mango]

I know what you mean...early last year I was at the bank standing behind two 20-somethings. One said to the other, "Did you get your tax refund yet?" the other said, "No, but I'll be getting it any day--I use it to pay off the balance on one of my credit cards every year." She went on to explain how smart and responsible she is by charging on her credit cards, paying minimum each month (Read: interest) and then paying off as much of the balance as she can with her refund check. I was dying to give her one of those V-8 forehead smacks

Maybe instead of a tax holiday, the government needs to fund classes in financial education--night school for adults and MANADATORY classes every year of school for our kids...starting with saving in a piggy bank for 1st graders; the stock market, loans and credit cards for middle schoolers; and ending with income taxes, mortgages and 401Ks for high schoolers.

This country is pathetically undereducated when it comes to basic finances--but that's the way banks and brokers prefer it to be.

Well, actually, without knowing the 20 something year old personally, I can't pass judgment. I was one of those struggling 20 somethings myself. However, from a financial standpoint, for someone who is in their 20's trying to establish a credit rating, that is a wise thing to do to increase your FICO score.
Carrying a small balance for a while and making the payments on time does that. At the very least, she wasn't blowing her refund check. For all you know, she could have been using the card for school books for advanced education and couldn't afford to pay it off in full.

I can also tell you that many of my past clients who did not understand the mortgage process were very well educated, but still asked the same questions over and over-- which was okay- but many only wanted to hear what they wanted to hear and all of a sudden had selective memories.

 

[30A Skunkape]

Well, actually, without knowing the 20 something year old personally, I can't pass judgment. I was one of those struggling 20 somethings myself. However, from a financial standpoint, for someone who is in their 20's trying to establish a credit rating, that is a wise thing to do to increase your FICO score.
Carrying a small balance for a while and making the payments on time does that. At the very least, she wasn't blowing her refund check. For all you know, she could have been using the card for school books for advanced education and couldn't afford to pay it off in full.

I can also tell you that many of my past clients who did not understand the mortgage process were very well educated, but still asked the same questions over and over-- which was okay- but many only wanted to hear what they wanted to hear and all of a sudden had selective memories.

FICO needs to go for this reason (among others). I think it is insane that one must go into debt in order to demonstrate their trustworthiness. FICO is a crutch. A few years of W-2s should suffice to get a house, car, etc. and unsecured loans should be obtained from a borrower's bank where they have an account. Do you know how different things would be right now if we used this approach?

 

[Mango]

FICO needs to go for this reason (among others). I think it is insane that one must go into debt in order to demonstrate their trustworthiness. FICO is a crutch. A few years of W-2s should suffice to get a house, car, etc. and unsecured loans should be obtained from a borrower's bank where they have an account. Do you know how different things would be right now if we used this approach?

What difference would it make if someone got an unsecured loan from their Bank or a credit card with another? No one said you have to go into debt to prove credit worthiness. Having a credit card and handling it properly shows financial stabilty, especially with younger people starting out. FICO is not totally to blame for our financial crisis. High loan to value lending and Wall Street greed was the culprit, then throw in a high reliance on FICO scoring. I come from the old school of lending where the whole picture of the Borrower is analyzed. Take out the score, and then if you were an underwriter, how do you determine who is credit worthy without some form of credit? If you took 2 people with jobs for a few years, how do you know how they handle their money other than rent payments?

 

[30A Skunkape]

What difference would it make if someone got an unsecured loan from their Bank or a credit card with another? No one said you have to go into debt to prove credit worthiness. Having a credit card and handling it properly shows financial stabilty, especially with younger people starting out. FICO is not totally to blame for our financial crisis. High loan to value lending and Wall Street greed was the culprit, then throw in a high reliance on FICO scoring. I come from the old school of lending where the whole picture of the Borrower is analyzed. Take out the score, and then if you were an underwriter, how do you determine who is credit worthy without some form of credit? If you took 2 people with jobs for a few years, how do you know how they handle their money other than rent payments?

Lost another one to ditech.com

 

[Andy A]

Didn't read the article. Thanks for straightening me out on that. So if I have set up a LLC for my business, and pay myself a salary, yet I am the sole employee, I could cut myself paychecks in Jan and Feb, and not the rest of the year, and not pay any income taxes for the entire year? Hmmm? Interesting. Don't think that tax attorneys aren't already working on that.

You know your problem? You're too smart for your own good. If it did come to pass and I hope it doesn't, they now have the idea they might not have had if you weren't so smart. Its like our news media giving every terrorist in the world ideas on how to create terrorist acts or information, classified or unclassified that will further their cause. I think you probably know what I mean. Sometimes information or creativity does not belong in the public arena.

 

[Geo]

You know your problem? You're too smart for your own good. If it did come to pass and I hope it doesn't, they now have the idea they might not have had if you weren't so smart. Its like our news media giving every terrorist in the world ideas on how to create terrorist acts or information, classified or unclassified that will further their cause. I think you probably know what I mean. Sometimes information or creativity does not belong in the public arena.

Yep. Without SJ,
no CPA, tax attorney or even Joe Sixpack looking to evade, er um, I mean- avoid paying taxes would ever have come up with this one on their own.

SJ, pls stop teaching the world to do evil with all your smarts...

 

[traderx]

Does this mean that it is patriotic to pay taxes after all?

I guess Joe Biden was right.

 

[Miss Kitty]

Does this mean that it is patriotic to pay taxes after all?

I guess Joe Biden was right.

...Patriotic would be writing the government an extra check without being told. Go ahead...jsut do it.

 

[traderx]

...Patriotic would be writing the government an extra check without being told. Go ahead...jsut do it.

Hmm....I would but suddenly I am afflicted with carpal tunnel syndrome and cannot write.

 

[Matt J]

Hmm....I would but suddenly I am afflicted with carpal tunnel syndrome and cannot write.

I think they'll send you a check for that.