Author Topic: Did you here there was no inflation? WHAT???  (Read 6853 times)

SAHD

  • 5 O'Clock Shadow
  • *
  • Posts: 53
  • Location: Washington State
Did you here there was no inflation? WHAT???
« on: February 20, 2014, 02:51:19 PM »
Today the feds released thier report on inflation and said there was no inflation.  Well.......there was inflation when they calculated energy and food, but, BUTT, when you added in the prices of NEW cars and airline tickets and cloths, it all worked out even.  NOTE the everyday living expenses increased just the frivolous stuff did not.  I love the way they spin it.

 I also just recieved my property taxes for my house and 2 rentals properties and they all went up by a couple hundred dollars each.  When I bought my home in 2003 my property taxes were $3500 they are $6800 this year.  OUCH  What will happen in the next 10 years? We will have to move just to afford the taxes.

NO INFLATION MY BUTT

dragoncar

  • Walrus Stache
  • *******
  • Posts: 9923
  • Registered member
Re: Did you here there was no inflation? WHAT???
« Reply #1 on: February 20, 2014, 04:18:51 PM »
Move to california

matchewed

  • Magnum Stache
  • ******
  • Posts: 4422
  • Location: CT
Re: Did you here there was no inflation? WHAT???
« Reply #2 on: February 20, 2014, 04:27:21 PM »
Read the report. Understand it. It is a report on the numbers for January. Unless you've paid property taxes in December and again in January reading the January report and trying to apply it to your property taxes is meaningless.

Also understand how CPI-U is calculated, what categories are in it. In fact here from the FAQ -
Quote
What goods and services does the CPI cover?

The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:

    FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
    HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
    APPAREL (men's shirts and sweaters, women's dresses, jewelry)
    TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
    MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
    RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
    EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
    OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

Also included within these major groups are various government-charged user fees, such as water and sewerage charges, auto registration fees, and vehicle tolls. In addition, the CPI includes taxes (such as sales and excise taxes) that are directly associated with the prices of specific goods and services. However, the CPI excludes taxes (such as income and Social Security taxes) not directly associated with the purchase of consumer goods and services.

The CPI does not include investment items, such as stocks, bonds, real estate, and life insurance. (These items relate to savings and not to day-to-day consumption expenses.)

For each of the more than 200 item categories, using scientific statistical procedures, the Bureau has chosen samples of several hundred specific items within selected business establishments frequented by consumers to represent the thousands of varieties available in the marketplace. For example, in a given supermarket, the Bureau may choose a plastic bag of golden delicious apples, U.S. extra fancy grade, weighing 4.4 pounds to represent the Apples category.

Don't try to take a one month report and extrapolate it into a category not covered by the report *edit* (it is kind of covered in the report as the report takes into account rent values which have taxes on the property rolled in) and with a different time frame. It is comparing apples and oranges and getting angry about it.

*edit* - in bold above but my point still stands that taking a one month report and trying to extrapolate to an eleven year comparison is a bit silly.
« Last Edit: February 20, 2014, 04:31:52 PM by matchewed »

banksie_82

  • 5 O'Clock Shadow
  • *
  • Posts: 20
Re: Did you here there was no inflation? WHAT???
« Reply #3 on: February 20, 2014, 04:44:26 PM »
Mod Edit: Personal Attack removed. /End Edit

If you want to know how inflation is calculated, then look it up. Different countries likely use slightly different methods, but in general different categories are weighted differently depending on a number of factors. Also, you’re looking at one data set, which is fairly meaningless, next time everything might be inversed. 

I don’t think the officials are ‘spinning it’ as you put it, it’s the recognised method of the calculation. In any case, zero inflation isn’t necessarily a good thing for the economy as a whole.

Are your taxes related to the value of your property? In that case, the value of your property has similarly increased… hardly something to be upset about. If you are worried about the taxes on your rental property, and the numbers don’t stack up anymore, then sell them and invest elsewhere.
« Last Edit: February 20, 2014, 04:50:15 PM by arebelspy »

warfreak2

  • Handlebar Stache
  • *****
  • Posts: 1136
  • Location: UK
    • Music by me
Re: Did you here there was no inflation? WHAT???
« Reply #4 on: February 20, 2014, 04:55:26 PM »
I have little sympathy for anyone complaining that their tax bill is too high. If you want to make a legitimate case against excessive taxes it has to be on economic grounds - that the high tax rate disincentivises you from providing more housing to people in a socially beneficial way. Anything else is just self-serving complainypantsing, while you continue to benefit from the services that your taxes pay for anyway (if you own and let out property, the value of that property, and therefore your rental income, is almost certainly improved very substantially by basic things like law enforcement and road maintenance - and let's be fair, your tenants are paying for it in practice, anyway). That said, if you are discouraged from buying more property to rent it out, maybe that is the plan - lower demand from buy-to-let landlords means lower prices for first-time homeowners - who knows?

Beridian

  • Stubble
  • **
  • Posts: 140
Re: Did you here there was no inflation? WHAT???
« Reply #5 on: February 20, 2014, 05:27:52 PM »
I think inflation is a mixed bag.  I live in SE Michigan which has been mercilessly pummeled by the loss of manufacturing jobs and the economic downturns.  My house is probably worth two-thirds of what it was in 2006.  My property taxes have dropped correspondingly by about a third.   I was looking through a file of old purchase receipts the other day and was horrified at what we were paying for things like PCs and cell phones 15 years ago, so some things have really come down in price.

I think inflation/deflation tracks back primarily to demand.  Improvements in efficiency and the exploitation of third world serf labor has resulted in markets being flooded with crap for us to buy.   Lots of crap for sale and fewer buyers means deflationary pressure.  I think the deflationary pressure may increase as more and more people start living more by the principles espoused in this forum.

From a political point of view i think the leaders need to find ways to put more money into the pockets of the lower classes and put more people back to work, even if this means the government has to hire them like they did in the 1930's with the Civilian Conservation Corps. 

Undecided

  • Handlebar Stache
  • *****
  • Posts: 1237
Re: Did you here there was no inflation? WHAT???
« Reply #6 on: February 20, 2014, 06:23:45 PM »
I have little sympathy for anyone complaining that their tax bill is too high. If you want to make a legitimate case against excessive taxes it has to be on economic grounds - that the high tax rate disincentivises you from providing more housing to people in a socially beneficial way.

Even though I do not complain about my taxes, I don't think your position is even remotely valid. Before I even try to engage in a discussion about it (which may not belong in this thread): Are you serious?

Blindsquirrel

  • Pencil Stache
  • ****
  • Posts: 690
  • Age: 6
  • Location: Flyover country
Re: Did you here there was no inflation? WHAT???
« Reply #7 on: February 20, 2014, 06:50:25 PM »
   Bugger the tax man. No issue with anyone complaining about taxes from me. Stunning waste of loot on the state, fed, and local levels.

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4038
Re: Did you here there was no inflation? WHAT???
« Reply #8 on: February 20, 2014, 08:04:18 PM »
I was looking through a file of old purchase receipts the other day and was horrified at what we were paying for things like PCs and cell phones 15 years ago, so some things have really come down in price.

But the price of any paticular good really has nothing to do with inflation, which strictly speaking is a decrease in the value of money (or an increase in the money supply).  Prices of things change for many reasons: computers & cell phones get cheaper because of improved tech, food gets more expensive thanks to a drought in California, taxes go up because politicians want to spend more...  All of this would still be happening if we had a non-inflationary gold-based monetary system.

warfreak2

  • Handlebar Stache
  • *****
  • Posts: 1136
  • Location: UK
    • Music by me
Re: Did you here there was no inflation? WHAT???
« Reply #9 on: February 21, 2014, 02:36:39 AM »
Even though I do not complain about my taxes, I don't think your position is even remotely valid. Before I even try to engage in a discussion about it (which may not belong in this thread): Are you serious?
Governments set tax rates, they are economic decisions. Any argument that isn't self-serving has to be about what is best for society overall, which is what economics is concerned with. As far as I'm concerned, "debate about an economic decision should be on economic grounds" is very nearly a tautology.

foobar

  • Pencil Stache
  • ****
  • Posts: 731
Re: Did you here there was no inflation? WHAT???
« Reply #10 on: February 21, 2014, 06:51:51 AM »
Inflation is not a one size fits all. Over the past 30 years things like food (in general), electronics, clothing and the like have dropped. Big ticket items like health insurance, college, and housing (depends partly on the area of the country are up). Your personal inflation is going to depend on your life situation. And we also notice big changes quicker than slow ones.  Gas costs roughly the same amount now as it did in 1980 in inflation adjusted terms. It feel a a heck of a lot different because pretty much all of that adjustment happened  over 5 years (2002-2007).


I was looking through a file of old purchase receipts the other day and was horrified at what we were paying for things like PCs and cell phones 15 years ago, so some things have really come down in price.

But the price of any paticular good really has nothing to do with inflation, which strictly speaking is a decrease in the value of money (or an increase in the money supply).  Prices of things change for many reasons: computers & cell phones get cheaper because of improved tech, food gets more expensive thanks to a drought in California, taxes go up because politicians want to spend more...  All of this would still be happening if we had a non-inflationary gold-based monetary system.

MrFancypants

  • Pencil Stache
  • ****
  • Posts: 605
Re: Did you here there was no inflation? WHAT???
« Reply #11 on: February 21, 2014, 07:17:06 AM »
Even though I do not complain about my taxes, I don't think your position is even remotely valid. Before I even try to engage in a discussion about it (which may not belong in this thread): Are you serious?
Governments set tax rates, they are economic decisions. Any argument that isn't self-serving has to be about what is best for society overall, which is what economics is concerned with. As far as I'm concerned, "debate about an economic decision should be on economic grounds" is very nearly a tautology.

So you consider it to be self serving to wish to maintain control over a greater percentage of the resources you personally generate and it's not self serving to wish for others to pay more for public services?

warfreak2

  • Handlebar Stache
  • *****
  • Posts: 1136
  • Location: UK
    • Music by me
Re: Did you here there was no inflation? WHAT???
« Reply #12 on: February 21, 2014, 07:21:40 AM »
I don't think it's self-serving to want taxes to be set at the level which benefits society the most, no. I don't know what kind of contradiction you see in that, although you said "others" as if I don't pay taxes too. I smile every time that tax money leaves my paycheck or bank account, because I know it's paying for all sorts of wonderful things, like police forces, firefighters, hospitals (in the UK), &c. that none of us could possibly afford if we didn't collaborate on them, yet all of us can benefit from because we do. It would be pretty ridiculous to say that I personally produce, well, computer science educations, when at the very least I need a road for all of those students to get to the university by. I'm quite evidently not asking governments to set taxes at the level which benefits me the most.

You may or may not agree that these are efficient ways for society to spend its money - my argument would be that we spend half of what the USA does on healthcare as a proportion of GDP, and per capita we have about 2/3 of your GDP, for example - but at least then we're making economic arguments about an economic decision.
« Last Edit: February 21, 2014, 07:40:13 AM by warfreak2 »

MrFancypants

  • Pencil Stache
  • ****
  • Posts: 605
Re: Did you here there was no inflation? WHAT???
« Reply #13 on: February 21, 2014, 07:56:17 AM »
I don't think it's self-serving to want taxes to be set at the level which benefits society the most, no. I don't know what kind of contradiction you see in that, although you said "others" as if I don't pay taxes too. I smile every time that tax money leaves my paycheck or bank account, because I know it's paying for all sorts of wonderful things, like police forces, firefighters, hospitals (in the UK), &c. that none of us could possibly afford if we didn't collaborate on them, yet all of us can benefit from because we do. It would be pretty ridiculous to say that I personally produce, well, computer science educations, when at the very least I need a road for all of those students to get to the university by. I'm quite evidently not asking governments to set taxes at the level which benefits me the most.

You may or may not agree that these are efficient ways for society to spend its money - my argument would be that we spend half of what the USA does on healthcare as a proportion of GDP, and per capita we have about 2/3 of your GDP, for example - but at least then we're making economic arguments about an economic decision.

I am not an anarchist and I absolutely appreciate the need for centralized public services.  But at the same time you do not get to write off the opinions of others regarding level of taxation even if you judge them to be self serving.

jordanread

  • Guest
Re: Did you here there was no inflation? WHAT???
« Reply #14 on: February 21, 2014, 08:07:09 AM »
I don't think it's self-serving to want taxes to be set at the level which benefits society the most, no. I don't know what kind of contradiction you see in that, although you said "others" as if I don't pay taxes too. I smile every time that tax money leaves my paycheck or bank account, because I know it's paying for all sorts of wonderful things, like police forces, firefighters, hospitals (in the UK), &c. that none of us could possibly afford if we didn't collaborate on them, yet all of us can benefit from because we do. It would be pretty ridiculous to say that I personally produce, well, computer science educations, when at the very least I need a road for all of those students to get to the university by. I'm quite evidently not asking governments to set taxes at the level which benefits me the most.

You may or may not agree that these are efficient ways for society to spend its money - my argument would be that we spend half of what the USA does on healthcare as a proportion of GDP, and per capita we have about 2/3 of your GDP, for example - but at least then we're making economic arguments about an economic decision.

I am not an anarchist and I absolutely appreciate the need for centralized public services.  But at the same time you do not get to write off the opinions of others regarding level of taxation even if you judge them to be self serving.

I think (and I could be wrong...it's happened...once) that warfreak was talking more about the context of the argument, not the argument itself. I think (s)he was saying that arguing or complaining about taxes purely from a self-serving standpoint wouldn't be as effective as arguing from a standpoint of how it hurts others, as opposed to just saying "My taxes are too high". I think they were suggesting that the argument would be better phrased by saying that "With these increases in property taxes, I can no longer offer tenants a good deal on a safe place to live."

MrFancypants

  • Pencil Stache
  • ****
  • Posts: 605
Re: Did you here there was no inflation? WHAT???
« Reply #15 on: February 21, 2014, 08:09:28 AM »
I think (and I could be wrong...it's happened...once) that warfreak was talking more about the context of the argument, not the argument itself. I think (s)he was saying that arguing or complaining about taxes purely from a self-serving standpoint wouldn't be as effective as arguing from a standpoint of how it hurts others, as opposed to just saying "My taxes are too high". I think they were suggesting that the argument would be better phrased by saying that "With these increases in property taxes, I can no longer offer tenants a good deal on a safe place to live."

ahhh okay, well if that's the context then it's hard to disagree.

warfreak2

  • Handlebar Stache
  • *****
  • Posts: 1136
  • Location: UK
    • Music by me
Re: Did you here there was no inflation? WHAT???
« Reply #16 on: February 21, 2014, 08:42:11 AM »
That's pretty much it, thanks to jordanread for the better phrasing.

jordanread

  • Guest
Re: Did you here there was no inflation? WHAT???
« Reply #17 on: February 21, 2014, 08:44:38 AM »
That's pretty much it, thanks to jordanread for the better phrasing.
Not a problem. I wordsmith on the weekends. :-)

Undecided

  • Handlebar Stache
  • *****
  • Posts: 1237
Re: Did you here there was no inflation? WHAT???
« Reply #18 on: February 21, 2014, 09:00:01 AM »
Even though I do not complain about my taxes, I don't think your position is even remotely valid. Before I even try to engage in a discussion about it (which may not belong in this thread): Are you serious?
Governments set tax rates, they are economic decisions. Any argument that isn't self-serving has to be about what is best for society overall, which is what economics is concerned with. As far as I'm concerned, "debate about an economic decision should be on economic grounds" is very nearly a tautology.

Assuming a funding need, there's taxes, the aggregate, and taxes, at any individual level, and then taxes, the system that results in a given individual paying the taxes they pay. If one accepts the decisions regarding the first two, then as a general matter the arguments about the system that result in any individual's tax payment will seem self-serving (absent explanations about the consequences to others). But there's ample room to have an economic debate about either of the first two points that is not at all self-serving. And, although I have a good economics degree, I accept that there's no universal obligation to support (and rarely an agreement concerning) either what the best funding need, or allocation, is. Pareto improvements are welcome, but hardly represent the universe of policy and spending choices.
« Last Edit: February 21, 2014, 09:15:50 AM by Undecided »

jba302

  • Pencil Stache
  • ****
  • Posts: 622
Re: Did you here there was no inflation? WHAT???
« Reply #19 on: February 21, 2014, 09:14:08 AM »
This thread should be locked and stickied as the only internet discussion in existence to head towards an argument but not actually descend into a hellfire thread. And it's an interesting discussion at that - personal belief of the value of taxes overall, pareto efficiencies, and government waste. Jordanread should get an internet gold star.

warfreak2

  • Handlebar Stache
  • *****
  • Posts: 1136
  • Location: UK
    • Music by me
Re: Did you here there was no inflation? WHAT???
« Reply #20 on: February 21, 2014, 10:55:05 AM »
All-too-often the complaint is simply, "I don't want to have to pay that much" without reference to what it's paying for and what value they're getting. The same as people who don't make employer-matched 401k contributions (in the USA) because it would "reduce" their paycheck.

Undecided

  • Handlebar Stache
  • *****
  • Posts: 1237
Re: Did you here there was no inflation? WHAT???
« Reply #21 on: February 21, 2014, 11:03:45 AM »
All-too-often the complaint is simply, "I don't want to have to pay that much" without reference to what it's paying for and what value they're getting. The same as people who don't make employer-matched 401k contributions (in the USA) because it would "reduce" their paycheck.

Or that's a straw man version of "the complaint," but it's a much more legitimate claim than the one you started with. To the extent people complain about their individual tax payments without understanding the overall system (including expenditure and tax distribution), I agree with you. But, perhaps to the same point you make with the 401(k) example, that's hardly unique to complaints about a specific subject. Many people feel no need to be informed about the views they express.