Thursday, January 3, 2008

Help Me Fight Maryland’s Horrendous Sales Tax Increase, Even If You Live In Utah!

Author: Nick
Category: Money
Topics: ,

also, the capital of maryland is now suckytown

In 1999, I was but a student in a Baltimore-area high school when Martin O’Malley, a former assistant state’s attorney and city councilmember, became the Mayor of Baltimore. Living in a suburb of Baltimore, I knew right then and there that he would eventually become Governor of Maryland and I’d have to deal with his financially retarded policies. You see, while he was Mayor of Baltimore, O’Malley did interesting things with taxes. He would first drop some taxes to make people happy, but then he would increase other ones—a lot. In the end, O’Malley left Baltimore more heavily taxed than when he first took office.

Fast forward to 2008. Sure enough, O’Malley is Governor of Maryland. Today, for the first time since 1977—before I was even born—the Maryland state sales tax is going up under legislation enacted by O’Malley. Indeed, he hasn’t been governor for a full year and he’s already screwing with decades-old tax rates. (While he was at it, he also raised several other tax rates but attempted to hide them behind tiny property tax rate cuts. O’Malley says that over 80% of Maryland families will pay fewer taxes overall, but he’s assuming that Maryland’s highest-in-the-nation housing prices are going to keep rising. In the end, it’s likely that even the poor of Baltimore City will pay more taxes than before.)

Starting today, our state’s sale tax is going up 20%: from 5 cents per dollar to 6 cents per dollar.

You might think I’m being a little silly getting so upset over a tax hike that only amounts to an extra $100 for every $10,000 of purchases. You might even think it’s a good thing because it will help discourage stupid people with credit cards from buying giant TVs and overpriced cars they can’t afford. Maybe you’re right. But my reasons for raging against the sales tax increase are different:

  • Our 5% sales tax is sacred. Maryland is as proud of its 5% sales tax as it is of its historical significance, Chesapeake Bay crabs, and high STD rate. Touching our sales tax is like molesting a baby seal on its birthday—you just don’t do it.
  • It’s the one affordable thing about Maryland. Everything costs so damn much in Maryland, especially in my county. Gas? $3.10 a gallon. Housing? $300,000 for a shack. Eggs? We only get 7 per dozen. At 5%, Maryland goes from being second-lowest among its neighbors to tied for highest.
  • 5% sales tax is easy. Especially in this age of rampant illiteracy and people who can’t do math, we need an easy-to-compute sales tax. You can do 5% in your head in five seconds; 5% of $2.09: drop the nine and take half of what’s left, or half of 20 = 10 cents. What’s 6% of $2.09? Nobody freaking knows!
  • It’s from O’Malley. For many reasons beyond the scope of this discussion, I don’t like O’Malley. I might have tolerated a sales tax increase from any other governor a little more, but having it come from O’Malley makes me think about moving. Unfortunately all of our neighboring states suck worse than we do. No offense, Virginia, West Virginia, and Pennsylvania.

Lucky for all of Maryland, this personal finance writer is not taking this assault on our freedom lying down. Indeed, I am sitting on my couch when I say that I will fight this unjust tax increase in the highest court of the land: the Court of My Wallet. And if you’d like to join me, here’s how you can help me fight the Maryland sales tax increase from anywhere in the country:

  1. Never visit Maryland. If you’re debating a family vacation in either Florida or Maryland this year, let me save you the trouble and point you straight to Disney World. Why anyone would want to travel to Maryland is beyond me since the only thing we have that you can’t find in a closer, cheaper state is lots more traffic. Now that our sales tax is 6%, please keep your tax dollars in states with much sexier governors.
  2. Never live in Maryland. We make it easy for you by keeping our housing prices and rent at the highest levels in the country. If you really want to pay high housing prices on the East Coast, go live in New Jersey.
  3. Never drive through Maryland. Not even to get to Pennsylvania from West Virginia. Go the long way. Otherwise you risk contributing financially to Maryland via its ridiculous highway tolls or taxes on rest stop vending machines. Also, don’t fly through Maryland because our air is 30% slower than the national average.
  4. Don’t buy from Maryland online retailers. Some Maryland retailers, mostly of candied asparagus, will charge Maryland sales tax from their websites. Send those retailers an e-mail letting them know you’re not buying from them because they didn’t complain loudly enough to block this sales tax increase.
  5. If you live in Maryland, go shop somewhere else. Yes, you’re probably supposed to pay Maryland use tax anyway on items you order out-of-state or online, but we all know you don’t. That said, if anyone asks, I do.
  6. Tell O’Malley what you think. You can use this convenient online form to let Governor O’Malley know that you won’t stand for his sales tax increase, even if you live in France and don’t speak a lick of English. Zut, O’Malley! C’est merde!

With any luck, O’Malley will see that a 6% sales tax isn’t any better at fixing his budget problems than a 5% one.

By the way, if you think you’re safe from O’Malley’s rampage from one of your 49 other states, beware: I’d put money on an O’Malley U.S. presidential bid by 2020. If you like the 15% income tax bracket, then you’ll love 25%!

Thursday, December 6, 2007

The Straw That Broke My Camel’s Back: Rate Locks For Stupid Mortgage Borrowers

Author: Nick
Category: Money
Topics: , ,

idiot-saving man to the rescue!

It takes a lot to make me really angry. Sure, I’ll get a little scary when I’m wronged by a retailer, and I’ll occasionally issue the one-finger salute to idiot drivers, but I haven’t been this infuriated in a long time.

And why am I pissed as a porcupine in a pig pen? It’s because of President Bush’s new plan to freeze the interest rates of dumbasses with adjustable-rate mortgages. Great, now I’m swearing. See what you made me do, Mr. Prez?

In case you haven’t heard the news yet, here’s the gist of this ridiculous bailout.

  • It rewards the stupid. If you were idiotic enough to come into a mortgage loan in the last few years that will soon (but not before the new year starts) adjust to a rate 30% or more above your current rate, you may be eligible to have that rate locked. Bye-bye rate jump.
  • It’s not for everyone. You have to be current on your mortgage payments to qualify for the rate freeze. In theory, those behind in their payments now could use this plan the most. Nope, they’re still screwed.
  • Some investors will get screwed too. Investors who bought these adjustable-rate mortgages from banks expecting to cash in on higher interest returns may get shafted. While the program is designed to benefit only those who would have trouble making payments if their rate adjusted (a good thing for investors who would otherwise lose money on defaulted loans), it will undoubtedly help out some people who can make their payments just fine in real life. That means investors will get lower returns on their mortgage loans, and that could discourage them from putting their money into lenders’ hands in the future. That means higher mortgage rates for everyone down the road. Yay!
  • It’s temporary. The rate freezes will only last for five years, which means we’ll have a repeat of the current mortgage crisis again around 2013. And with higher rates because fewer investors will want to fund these mortgages, these adjustable rates could then jump far higher than they would if they simply started adjusting now. In short, this plan postpones the bad but makes things worse later.
  • As for smart homeowners? If you’re like me and had the three brain cells necessary to see that a fixed-rate loan was a good idea… well, you get nothing. Actually, you get to continue paying a higher fixed rate, while people who took out riskier loans are rewarded for their foolishness with longer terms on their lower rates.

I would have been even more pissed if FDIC Chair-dumbass Sheila Bair had her way. She wanted to freeze rates on all subprime loans. Forgive me for purchasing a home I can actually afford, Ms. Bair, but I didn’t know you were planning to protect financial morons from the reality of their bad decisions.

I’ve heard all the arguments for why this is a good idea. People often blame predatory banks for forcing these horrible mortgages on poor unsuspecting homebuyers. (This is bull hockey. People who can’t do interest rate math shouldn’t be given six-figure loans in the first place.) Others won’t blame either side, but they point to economic doom should all these adjustable-rate mortgages end up in default. But regardless of who is to blame and what could happen, I hope you’ll agree with me that, in the end, this is a terrible idea. It’s demonstrating to people that the government will always bail them out of their financial messes, and that just encourages even more reckless behavior.

As I mentioned above, I was awesome enough to see that the 4.9% interest rate I was offered on an ARM mortgage could adjust as high as 9.5%, whereas the 6 percent interest rate on a 30-year fixed mortgage would remain at—surprise!—6 percent. What does that get me now under this government handout plan? Zero. Zip. Zork. Not. A. Thing.

Really, President Bush, how could you agree to this plan? You were so against government assistance in the subprime mortgage meltdown. I… I could stand by you when you started crazy wars and conducted slightly unconstitutional domestic surveillance. But I just can’t forgive this! You are so not getting my vote for re-election when you alter the constitution to allow dictator rule, I promise you that.

I’d like to take this time to address my mortgage lender.

Dear Bank of America,

Thank you again for agreeing to give me a whole lot of money to buy a really overpriced home a couple of years ago. Also, thank you for giving me an ethical mortgage officer who easily convinced me to go the fixed-rate path since it meant that I would not lose my home in a few years when faced with payments I cannot afford.

I hear you may soon be planning to lock in the rates of some of your less intelligent mortgage customers who thought an initial rate of under 5% that could adjust into the double digits was a smart idea. I’d like to remind you that I’ve been a loyal customer of yours for some time now; I’ve made every payment on time, and I even put a smiley face on the memo line of my mortgage payment checks. That said, I must ask you to give me the same handout as your less intelligent mortgage holders. If you decide to lock in any of their lower rates, I request that you reduce my rate to those same levels. In addition, I would ask that you refund me the difference in interest I would have paid had I instead opted for that lower-rate ARM.

If you are not prepared to offer me the same treatment as your lower-IQ’d borrowers, I will gladly sue you to get my rate lowered. Of course, we know that won’t accomplish anything because you will likely get a free pass from the federal government’s Offices of Thrift Supervision and the Comptroller of the Currency. So in the end, you get more of my money, you help stupid people not go bankrupt, and you get to continue being a giant ATM to math retards. I guess everyone’s happy! Oh wait, I’m not.

Respectfully asking you to suck it,

Phew! It sure feels good to vent, but I’m sorry I had to expose you guys to that. Don’t worry, I’ll return next time with tips for saving money on lollipops and rainbows.

Tuesday, June 6, 2006

The One Hundred Ninety-Fourth Carnival of the Vanities

Author: Nick
Category: Money
Topics: , , , , , , , , , , , , , , ,

admit one to here

Greetings! Welcome to the 194th edition of the very first blog carnival, The Carnival of the Vanities. Here you’ll find the best works of some of the greatest minds on the internet. There are 39 terrific submissions eagerly awaiting your attention, so I’ll make the introduction as short as possible. If you submitted an article but you don’t see it here, then you either submitted multiple articles from one website (and I only accepted one) or you missed the deadline of 6pm Eastern on Tuesday. But don’t worry, because you can always submit your fantastic piece of work for next week’s Carnival of the Vanities which will be hosted by Generic Confusion.

Before we get started, just a quick note on the format. Keeping in mind that the point of the Carnival of the Vanities is to encourage authors to submit their best recent work (and not just any old post), I’ve taken the liberty of being a totally unbiased judge of the authors’ decisions to submit their work this week. As such, while I’ve included every last eligible submission, you’ll find that they’re ordered starting with my favorites and ending with my… not-so-favorites. I mean no offense to any of you fantastic writers, but there were some articles that simply engaged me more than others. Maybe they were highly original, or possibly I really learned something from them, or perhaps they just made me laugh.

I hope you take the time to enjoy each and every one of these submissions as much as I have, and feel free to hang around Punny Money afterwards for some great financial news, tips, and tales with a bit of humor on the side.
[Read more…]

Friday, May 12, 2006

Your Phone Company Owes You $1,000

Author: Nick
Category: Money

hello verizon, where is my money

I really try to stay out of political discussions in my everyday life, and I’m reluctant to add a “politics” tag to Punny Money now, but a certain hot political topic could have a significant effect on your personal finances.

The issue to which I’m referring is the recent announcement that Verizon, BellSouth, and AT&T have been handing over the phone records of millions of Americans to the National Security Agency (NSA). Whether you agree or disagree with these actions, they could have a very strong effect on your wallet one way or another.

On the one hand, if one of these three phone companies provides you telephone service, they could now owe you at least $1,000. That’s because some people believe their cooperation with the NSA in this matter violates certain sections of the Stored Communications Act. Think Progress carries the story:

The Stored Communications Act, Section 2703(c), provides exactly five exceptions that would permit a phone company to disclose to the government the list of calls to or from a subscriber: (i) a warrant; (ii) a court order; (iii) the customer’s consent; (iv) for telemarketing enforcement; or (v) by “administrative subpoena.” The first four clearly don’t apply. As for administrative subpoenas, where a government agency asks for records without court approval, there is a simple answer–the NSA has no administrative subpoena authority, and it is the NSA that reportedly got the phone records.

And the consequences for the companies that have violated this law?

The penalty for violating the Stored Communications Act is $1000 per individual violation. Section 2707 of the Stored Communications Act gives a private right of action to any telephone customer “aggrieved by any violation.” If the phone company acted with a “knowing or intentional state of mind,” then the customer wins actual harm, attorney’s fees, and “in no case shall a person entitled to recover receive less than the sum of $1,000.”

According to Think Progress, all of this means that the telcos could be liable to Americans for tens of billions of dollars in damages. So on the other hand, should any class action lawsuit successfully prove this case to be true, you may see your phone bill rise significantly to cover the expenses such a loss would cause the major telecommunications agencies.

I especially love response #91 (reproduced below) to the Think Progress article which details exactly how an ordinary person like you or me could go about collecting that $1,000 the phone company supposedly owes us…

  1. Go to your local district court and file a small claim action for $1000 for “Illegally providing phone records to the NSA” Costs about $30.
  2. The court clerk will stamp your claim and give you a Case Number and a court date.
  3. Serve your phone company by mailing the stamped claim by registered mail. Costs about $5.
  4. Attend the court hearing. A lawyer from your phone company MUST show up to defend. If they don’t show up, you will win $1000 by default. If they do defend, you’ll at least get a chance to have your say on the record, and you might win. BUT, either way, just think how much we could cost the phone company if just 10,000 of us did this? The cost of just defending these cases would make the phone company think twice about playing ball with the feds. For an added bonus, send a copy of the claim a week before your court date to the local newspapers and you might even stir up some press.

Anyone out there care to give this a shot? I might do it myself, but I’m afraid Verizon will tell the government about all those 900 numbers I’ve been calling.