My favourite bugbear: deferred property tax for seniors.
I've always thought that age was a fascinating element in these programs. Why not just have programs for low-income people, full stop -- why make it low-income seniors?
And then the logical followup: how are you financially vulnerable if you have an asset worth hundreds of thousands of dollars?
Some jurisdictions in Canada do these programs better than others. My hometown of Kitchener, Ontario requires that you be receiving the federal guaranteed income suppement (given to all retired folk below a certain income threshold) before they let you defer your property taxes. The province of British Columbia will defer property taxes for anyone over age 55. If I lived in BC, I would certainly choose to defer property tax, with interest assessed at 1%/year, and invest the deferred tax in the market. In fact, I might invest the difference in BC bonds -- which pay 3.4%/year. What a sham for the taxpayer.
They do this because seniors are typically on a fixed retirement income and often aren't even capable of working to increase it (which is why social security exists in the first place).
They are financially vulnerable if they own a home but the taxes on it exceed what they can afford on that fixed income, which can easily happen when property values increase, when property taxes increase, or when inflation makes the fixed income cover less of their other expenses. The deferred taxes make sense because the seniors can then stay in their home instead of uprooting their lives and possibly spending even more on rent, and the govt gets their taxes eventually anyway.
Most seniors are on a fixed income -- the ones on GIS, certainly. It's not clear to me why anyone over age 55 should be eligible, when the retirement age in Canada is 67.
The government is effectively paying them to live in their house, no? They're charging 1% interest but raising money in the bond market at 3.4%. Presumably if they were actually collecting the property tax, they would have less of a shortfall to cover in the bond market.
> how are you financially vulnerable if you have an asset worth hundreds of thousands of dollars?
For most people, the house they own is not an asset, it's their home. Taking out home equity loan is very unwise financially, and selling it, while it will generate a fixed sum, is not only complex but can introduce additional taxes. In addition all that, the former homeowner must now find a new (rented) residence and move, and live for who knows how long on the proceeds from the home sale.
Hmm, can you provide an example? The deferment programs are only available on one's principal residence. Sale of principal residences are exempt from capital gains in Canada.
> it's _their home_
I get that it's your home and it would be sad to sell it. It would be sad to sell it when you're 30, too.
But let's say we rationalize it as being OK to evict a 30-year-old, but not OK to evict a 55-year-old. I still have issue with the fact that:
* there's not a means test
* the interest charged doesn't match market interest, so when you finally die and your estate settles up with the government, you've paid less tax than the fellow down the road due to interest rate arbitrage
I can't find usage stats on BC's tax deferment program, which is a shame as theirs seems the most open to abuse. e.g. this CFP [1] recommends that anyone who can (i.e. is over 55) take advantage of it, regardless of financial need. Which makes sense: it is one of the few ways in Canada to transfer your personal tax burden onto others.
You seem genuinely open to discussion. UI issues prevent offering all I'd like, but I suggest you add sociology - particularly the family unit and successive generations - with your economic views.
The arguments on this post lack enough dimensions to be of any use other than generating conflict.
Eviction based solely on age is a fruitless direction to move in. A (35/50) y.o. with a 4 bedroom house is not comparable to a 4 bedroom house, owned by two (35/50) y.o. people who (are raising/raised) 3 children, one of whom (birthed/returned home with) a child.
There are many other dimensions to consider, but I am unable and unwilling to continue.
"Rights" (in this context) are things to which one has a legal claim. Property ownership is a right. Rights may be limited or unlimited, alienable or inalienable (which is to say, transferrable), or absolute or non-absolute (which is frequently confused with alienability).
An absolute right granted by law (e.g., Constitutional Rights which may not be infringed, or if you subscribe to them, universal human rights) would generally superscede others. There's a fairly strong argument against such rights in general, and I happen to see the discussion of rights in general as being greatly muddied.
That's not to say that many of the claims granted by these rights are bad. I think there are very strong arguments in favor of free speech (though not unlimited), of freedom of religion, of due process. Also of education and healthcare, possibly of a minimum income. Other rights I'm less convinced of, particularly in a resource-constrained world.
But the right to remove someone from their home without consequence strikes me as a peculiar one. Even Russia's serfs were considered to be bound to the land. They couldn't be moved separately from it (nor did they have the right to move themselves, but this wasn't terribly different from restraints on internal migration, say, as in England under its Poor Laws in the 17th century).
That's correct, it's not a right, but being free from having your primary and only residence confiscated because you're unable to pay a "property tax" (usually due to a decreasing living standard) should be a right.
Then you could sell it and buy a smaller property. Property taxes are used to service the immediate area around the property (typically the municipality where the residence is located) and whether you are old or young has relatively little to do with that (I do think that older people tend to have a lower impact on their surroundings so maybe for that reason they should be getting a discount).
You could argue that it is a form of double taxation (since you've already paid for the property and that income was already taxed before you could use it).
Of course. But, seniors also have harder time to settle on new place where they do not know anybody and do not have support network they need (e.g. people willing to help with small and big things when they need it).
If you force them to move elsewhere, they are likely to end up completely isolated and it is much bigger problem for them then for younger person.
Yes, it definitely is a tragedy. On the other hand, plenty of soon-to-be-seniors downsize their housing voluntarily before this becomes a problem.
The house you need at 50 when your kids have left is not the house that you needed at 30, it will likely be too big for two anyway.
Traditionally people would move into a place in their mid 20's to early 30's and stay there until they either died or went into care but that is definitely changing.
And property taxes are only a small factor in that, the cost of heating and maintaining (both in money and in labour) as well as walking stairs usually figure in there as well and possibly as larger factors.
You say I owe something, I say you're stealing from me.
I don't and won't pay shit. It's my property. Come and take it, but there WILL be consequences.
I don't know if you're genuinely evil or you're just one delusional latte sipping socialist hipster who thinks he can live off other people's money and labor. Sickening.
It's different. If your home was previously paid for in full, then it's your private property. If I'm paying someone on a monthly basis to allow me to live in their residence, then it's obviously not mine. Asking someone to keep paying an annual tax on something that's:
1. completely theirs
2. essential to their life
is a form of feudalism and serfdom and a flagrant violation of their right to be secure in their life, possessions and property. You can try to argue this as much as you want and invoke all sorts of broken analogies, but it is what it is.
I agree. It all comes down to your personal belief system. If I believe that theft is wrong and immoral and you disagree, then we will never be able to reach common ground.
If you're going to play silly semantic games like saying your discussion partner doesn't believe theft is wrong and immoral, then don't be surprised when people find you tedious to talk with.
Ok, let me present a simple scenario. Imagine the following:
Initially you're doing well in life. You're making decent money at your tech job and you eventually end up buying a pretty nice house. Things are good for a while, but at some point you get old/sick and are unable to work anymore. You are able to survive on what you have and perhaps have a fairly decent life, but it's not a lot. You like the house where you live and you consider it yours. But for some reason, the price of real estate in your neighborhood skyrockets and the government reevaluates your tax liabilities based on the new valuation of your house.
You used to have a pretty good life, but now you just can't afford the new property tax anymore and are forced to sell the property, move halfway across town and buy some dingy shack that you actually can afford.
Question: is it fair of the government to evict you from the place that you fully own and where you lived for ages, because of someone's rent-seeking behavior and based on certain factors that are completely outside of your control? Are you telling me that you wouldn't feel even a little bit upset in that kind of scenario?
edit: Also, I thought that downvoting is reserved for rude discourse and blatant violations of the HN rules, not if you disagree with someone's opinion. This place is becoming just like Reddit.
It is a reasonable option. It also happens to be shared by those complaining about the effect of tech companies on the housing market, who don't seem terribly popular around here.
You listed health twice, and what kind of unemployed and not-looking-for-a-job (if we're talking about fixed retirement income) person has no free time?
The ability to do work (strong back) and the freedom from onerous medical expenses (good health) are related, you are right. But I like to think of them as distinct, because you can have one without the other.
As for free time, I am not saying a retiree has no time. Just, much less left to work with.
If his assets keep pace with inflation then how does he end up needing assistance when he's 55?
I'm all for government being involved in retirement because shit happens. hould the upper middle class person in a 600k house be given more then his brother who rents? If we have government funded retirement(which I'm all for) why should some of it be dependent and proportional to the amount of house one owns.
Well, some might argue that even the liberal agenda in the US heavily favors the boomers (at the expense of our youth).
-As a 'millennial' I am now legally required to subsidize health care for boomers
-The Federal Gov't recently raised rates on already massively profitable student loans, yet has no problem losing Billions guaranteeing NINJA boomer loans for McMansions.
-I live in what would be considered a fairly liberal area. However, the median age is above the US average. School funding referendums fail by a wide margin here.
There are certainly exceptions, but, generally, I sense that boomers have little respect or regard for our generation (millennials).
Don't worry, when you're 50, you'll have the political power to strip wealth from the young as well. It's nothing specific to boomers vs millenials, it's just the way of the world. Older people have political power, because they have a lifetime of networking, along with personal wealth accreted over that time.
Or, in simpler terms, when has there ever not been a "young people these days!" comment?
There is huge liability in living to be old. Sure, work hard, save money for old age, and get old, there's a stash of funds.
But even a million bucks has got to last the rest of your life, and who knows, my aunt is 100 years old, and still going. Retire at, let's say 70, and figure it out, will that stash last up to 30 years?
Do the math, taking out taxes at 25%, that's $25000/year. With social security, around $4000/month, just an estimate. How wealthy is that? Is it really even adequate?
Consider what happens with age: people get sick, bodies deteriorate, it's natural. Go to the ER, have an MRI, a hospital stay, whatever, it can be thousands out of pocket, even with medicare + insurance.
With serious illness, that million bucks can go fast. And even if there is good health care to be found, which is dubious, it's still scary and a constantly threatening reality.
Don't forget the house payments, computer gear and all the other normal stuff one needs to buy. If the house is paid up, chances are it's an old house and will need repair. Price out what a new roof or furnace costs (I've had to replace both in the last couple of years).
OK I'm old but I still go to work, though I can't do that forever. Call it what you will, I have a wealth of experience, accomplishment, family and great friends, but not a princely cache of money. Many old citizens are in a far more precarious position as financial security goes. I hope no one thinks it's a trivial concern.
Are you saying that as a young graduate student, I should incur more debt to train for a career, then, pay higher (unsubsidized) interest rates on that debt, and pay higher taxes once I get a job in order to bolster the income of someone who (in your example) is already a millionaire?
djokkataja is right. You will have a very difficult time gaining the sympathy of younger generations with that argument.
Frankly, IMO the student loan situation is as big a mess as any we have in our nation. It is outrageous that it costs $40000 a year to attend college. It saddens and sickens me to know that is the case.
It represents a skew in our priorities perhaps the same as seen in other domains, thinking about health care in particular. The mistaken idea is that we save money by skimping on essentials. The only way to navigate toward solving problems is to see the whole picture, the impact on the entire system has to be known.
The least expensive health care is providing high quality services to the extent people need. The cost to the nation of untreated illness is greater than the expense of treatment, considering the whole cost burden of illness.
Same in education. Encouraging education that permits maximum accomplishment provides a net benefit to the nation as a whole. Under-education impedes productivity, technological innovation, and even contributes to health care costs indirectly.
When I was in school and reliant on loans, the government program asked for "feedback", what I thought would improve the student loan program. I wrote on the form, for the price of one military jet, a thousand students could be fully supported for as long as required. AFAICT my comment had no effect.
So no, I'm not asking you to support me as long as my million bucks holds out. With any luck (my luck), you won't ever have to. But there are quite a few old citizens not as lucky as me who we should try to support.
And BTW, I may be old, but I am still a taxpayer. Retirement account withdrawals are federally taxable, so I'm guessing that would be roughly $7000/year. That's my money, saved out of what I earned.
Some of my tax payments may go to support you or your school. It's OK, I do believe mutual support when necessary is we should be aiming for.
Many young people have negative net worth because they keep taking out student loans hoping to get a job.
Your scenario about the costs and difficulties of maintaining a house won't generate any sympathy with young people. There are zero people that I know from my graduating class (2009) who have purchased a house since college.
If you're seriously concerned about having saved enough to retire by the time you reach retirement age, maybe you should keep working. My parents have planned to push their retirement back about a decade for that reason.
Most young people can work and generate an income, many old people cannot. It probably takes a bit of aging/having your skills becoming outmoded to start understanding this at an intuitive level.
Most old people have the power to change the system, many young people cannot. Unfortunately the old lack the young's courage (as they're risk averse) and so are less likely to go against tradition. Money need not be inflationary, and if we solve this problem we end the cycle of the young being overworked for the sake of the old, but the old had rather do it later (the next generation will take care of it, they say).
So fix the insurance system to not be capable of wiping out a million dollars in savings. As far as housing, I'm not super sympathetic about having to move somewhere cheaper as the downside to spending an entire third of your life retired.
Does anyone have US numbers for the stats cited in this article?
Side note: while this article paints seniors as maybe getting more than they deserve, financial elder abuse is a huge problem already in the US. Articles like this worry me because some may twist the points to justify stealing. Rich or not, it's very easy to take advantage of the elderly. I've seen family members, caregivers, family lawyers, etc. do terrible things for money. It's sad.
Just a guess, but it's probably a similar situation in the US when the same cohort is compared to their ancestors. My mom (66 years old) is certainly way better off than her mother was at 66+. My friends' parents seem to be similarly comfortable in their golden years. Post-WWII largesse really paid off for them, but who's really going to pay for it?
I wonder if the situation is much different in the US. The health care system is certainly different. One gets the impression the system in the US preys on seniors as employer benefits evaporate after retirement while insurance premiums skyrocket or are denied because of 'pre-existing conditions'.
This piece is inflammatory click bait using generational warfare rhetoric, pervasive in social media.
Things are completely different in the US. Other speculations about the aged here are age independent. To approach the actual problem, you must first replace the word retirement with injury or downsize.
In the U.S. healthcare is a tool for culling. Oh, look - Apple has new products...
Medicare becomes available at 65. It gets a bad rap, but it's actually better than the vast majority of private insurance policies.
Still, your observation is accurate and poignant. The whole purpose of private health insurance is to rob those who are easiest to rob (the old and sick). The problem is that old, sick people tend not to have a lot of money. So, the "genius" behind U.S.-style health insurance is that you can take money from people when young and well (and relatively wealthy) and then fail to deliver the promised services (on bullshit technicalities like "exclusions" and "pre-existing conditions" and "fuck you, you won't sue me because ha ha you have cancer and will be dead before trial date") in their hour of need, when they are too exhausted to fight back.
If U.S.-style medical billing and insurance were pulled on anyone but the sick they would be met with Joe Stack levels of violence on a daily basis.
Anecdotal, but my doctor agrees wrt medicare - medicare is actually nicer to deal with than any of the big private guys, and actually pays claims without requiring hassling. She says that medicaid is a disaster to deal with, though (I think that one is state-run).
Wow!:
“But they shouldn’t expect to be subsidized by the poor.”
Something is very clear: politicians always want more, and more and more. They never have enough taxes.
"Thanks to stock market booms, economic growth, a soaring real estate market and a major expansion in both private and government pension plans"
I don't know Canada, but here in Europe pensions are shrinking, and stock market is a bubble that will pop when interest types rise, and they will soon(they are unsustainable now).
I am young and the only thing I need is freedom, economic freedom included, let bubbles burst so we could acquire our houses and cars at the right price. They let it only go up, then they try to sustain it artificially injecting public money in banks and making "bad banks"also public.
Politicians and taxes are the problem, not the solution.
First of all, when I'm old please don't call me a "senior". Call me "old". There's no shame in it, and nothing wrong with the word.
From the OP: Why are we doing so much to try to help seniors when they’re already the wealthiest generation in history?
At least in the U.S., it's because they're politically active. They vote. They mobilize. They demand services, for the tax dollars they've paid when young and that they are paying now.
Invert the question: why don't young people demand much of their government? Why do we seem to be content with a system (and this goes beyond government, into the workplace) that costs so much and delivers so little? Why are we OK with high housing costs and stagnant wages? Why don't we demand the government to step in on airlines' sleazy dynamic pricing games, where a person using a different device to book the same flight at the same time pays a different fare? How come, when we're paying tax rates well over 30%, we don't have universal healthcare, and even if we're insured we still get crappy medical care and coverage? Why do we tolerate that? Why haven't we unionized or formed professional associations in software?
Here's the answer. The critical difference between young and old is that the old people know their financial situations aren't going to dramatically improve. An old person of average financial outcome has no delusions that he'll be a tech billionaire in 3 years if he can just save up for his move to the Valley. Young people haven't figured that out yet, and still believe that they can beat the astronomical odds against them, and therefore tend reflexively to identify with the rich.
The plight of the young can be ignored because the young haven't figured out yet how badly most of them are going to lose, and that political activism (again, perhaps in the form of workplace collective bargaining instead of electoral canvassing) is essential to keeping them afloat.
Spot on. Thanks to Lake Wobegon syndrome, American youth inevitably think they'll end up on the rich side. By the time they're seniors, the veil of ignorance that fades.
Reminds me of the quote from John Steinbeck that Americans are never poor, they're just temporarily inconvenienced millionaires. I guess that by the time you're 60 you realize that those millions are never coming.
I've always thought that age was a fascinating element in these programs. Why not just have programs for low-income people, full stop -- why make it low-income seniors?
And then the logical followup: how are you financially vulnerable if you have an asset worth hundreds of thousands of dollars?
Some jurisdictions in Canada do these programs better than others. My hometown of Kitchener, Ontario requires that you be receiving the federal guaranteed income suppement (given to all retired folk below a certain income threshold) before they let you defer your property taxes. The province of British Columbia will defer property taxes for anyone over age 55. If I lived in BC, I would certainly choose to defer property tax, with interest assessed at 1%/year, and invest the deferred tax in the market. In fact, I might invest the difference in BC bonds -- which pay 3.4%/year. What a sham for the taxpayer.