Wednesday, February 08, 2006

An Individual Perspective (Post III of III on Tax Credits)

For many of us, discussing the exact nature of our own financial situation is about the most private subject that could be discussed for a variety of reasons. Many of the reasons to keep finances private are praiseworthy. But, in some instances one can deceive themselves and their children of the nature of their financial system and in an effort to hide the truth from themselves (and their children), they end up working themselves into a situation that is so bad that they are only hiding the truth from themselves.

I have observed a trend in which people unintentionally deceive themselves (and their children) into believing their financial situation is either better or worse than it actually is. I use the word unintentional because I do not believe that the "deception" is neither purposeful nor malicious. It is just a facet of human nature.

In general society I do not see a bias towards believing a financial situation is better or worse than it really is. Unfortunately, in the Orthodox world I see a trend towards believing that their financial situation is better than it actually is, and we often believe that the situation of those around us is just like ours.

In my world an Adjusted Gross Income of $75,000 is quite high (I should note here that I heard the tax credit starts phasing out around $75,000, but is available in smaller amounts through $90,000). And, considering the fact that so many people in our communities begin their marriages and have children before they have completed their educations and have established careers, I can only guess that I am not alone in believing that an AGI of $75,000 will not be reached by many of our community members who, not even established themselves, are already faced with massive tuition bills.

This post really is not as loaded as the previous two posts and was just meant to make the point that one often erroneously believes that those around them are in essentially the same boat as they are financially (some examples to follow). And to understand the impact that a tax credit will have, they one must look beyond him/herself and get the facts about other people.

-->When we first married we lived in an area highly populated by kollel couples. Oftentimes the converation turned to how much WIC one received and for what. In this subset of community, there was an assumption that everyone in the room was on assistance. It wasn't uncommon to be asked what type of WIC you were getting. Incidently, not everyone in the room was on assistance, but it is certainly eye opening to be part of a discussion you can't partake in.

-->Recently while in the store, the clerk behind the counter had to match my credit card to my ID and noticed my card was unique and asked out it. I was explaining that we took out this card because it places money in an investment account and has really benefited us. The man behind me then started telling me how I really need to be careful about this credit card company because their interest rate is high and how we could get a much better interest rate from a different company. Being that we do not carry any credit card debt and that we only charge what there is cash in the bank to pay for, the conversation struck me as odd. But, then I remembered that my husband was privy to an entire discussion with this man and others about refinancing homes to pay off credit card debt and other expenses (tuition would be one of the expenses) and how there was an assumption that everyone there could relate.

For now I will wish my readers a good night and leave you to ponder my ideas above.


Joe Schick said...

Your personal criticism of me in this post is a complete distortion of what I wrote and the point I was trying to make.

Orthonomics said...

I am rewriting the sentence to say that while Joe believes that the impact will be limited, I had the exact opposite reaction.

My apologies.

Joe Schick said...

Here is what I wrote:

"It's important to remember that the $500 credit is only for families making less than $75,000. Let's not overstate the impact - most people will not be eligible for the tax credit."

Even after your rewrite, you continue to atttribute to me the notion that the impact will be "very limited" and you write that my statement shows that "we all view the financial situation of those around us through our own eyes and that we rarely take into account the fact that others are not just like us."

All I said was that "most people will not be eligible for the tax credit." I think that is the case, i.e. that most who pay tution have a joint AGI of more than $75,000. It is possible that I'm wrong, but I don't think so.

Whether I'm right or wrong about that, on what basis can you say that I don't take into account what others are going through?

Again, my point was simply that your opening post strongly indicated that everyone will get $500 per child in school, and that in fact, there is an income cap of $75,000.

I don't think anything you've written is out of malice; however, given that unlike you and most other bloggers, I blog with my real name, I do not appreciate statements that I've made being distortd and misrepresented, which is what I believe you've done in this post.

Orthonomics said...


Our misunderstanding is just that, and it is certainly not malicious. I linked to your blog because I believe that your blog is particularily worth reading (although I'm not a Jets fan. I especially found your post about Orthodox life being sustainable an interesting post and one that resonated with me as we are finding we have been priced out of the housing market. While we are finding it challenging putting together an appropriate downpayment for an overpriced, undersized, undermaintained home that we certainly will not be in love with, we fear to no end putting together a "downpayment" every year for tuition!

That being said, I am eliminating all mention of you from my 3rd post on the tax credits subject. This post was the worst written of my posts and the one that I struggled most to write. So, I am re-wording the post, eliminating mention of you, and offering my public apology to you right here, right now.

The goals of my posts were not to prove that MOST families in NY would be eligible. If most is defined as 50% + 1, certainly most families will probably not be eligible. However, many will be and explaining the tax credits was to show how even those who may have thought they were surely not eligible might just be.

My second post was an effort to help people understand that we need to think communally in effort to make a dent towards alleviating the "tuition crisis." There will be many, many more posts to come about thinking communally and working together as a community. The tax credits are one piece of the puzzle for NY'ers. Surely it is a small piece. But, the minor financial relief that will be provided to some families will certainly be well worth the support.

The last post has been changed and is hopefully better.

Once again, I'm sorry. My apologies.

Joe Schick said...

Thank you. I knew it was just a misunderstanding.

BTW, my AGI is more than 75,000 and I too am pretty much priced out of the housing market.

Why aren't you a Jets fan.

Anonymous said...

Since you don't believe that most NY'ers will be eligible for the tax credit, would see the whole rally as a folly and a waste of time and effort by our local yeshivos? Or would you support it as a symbol to our legislators that we do care deeply about the issue and are interested in working with them to help expand the program to benefit still more NY'ers once it is established?

Orthonomics said...

Hi Joe, I'm glad we cleared that up. And, when it comes to football I am more of a college fan than an NFL fan. So, I get a lot more excited about the Rose Bowl than the Super Bowl. Maybe someday I will treat my readers to a football post.

Shabbat Shalom!

And, welcome fact checker.

Joe Schick said...
This comment has been removed by a blog administrator.
Joe Schick said...

While I'm a bit skeptical about a rally whose participants are largely observant Jews - while we're supposedly part of a "wide coaltion" I'm not sure that other groups are going to be so well represented - I do support the effort to pass the legislation.

But I don't think it's more than a bandaid for the real problems of the costs of tuition and of Orthodox life generally. Those problems remain largely ignored and untreated, and any solution to those problems will have to come mainly from within the observant Jewish community.

Anonymous said...

I think I have come to agree with Joe on this one. The tax credit won't hurt, and might even be able to be expanded in future years. But it won't pass with support only from Orthodox Jews even if Sheldon Silver puts his career on the line to push it. (He is very powerful, but part of that power has come from picking his battles.) It will be a lot easier for him to get the Democrats in the Assembly to support this if the CFE suceeds in doing something about the chonic under-funding of the New York City schools. I truly don't understand why Teach NYS was so upset when Agudath Israel spoke with union leaders.

And I would add that we can do a lot more ourselves, with no assistance from government, to reduce the costs of our schools. Simply pooling resources for purchasing supplies and employee benefits would offer substantial economies of scale, especially outside of New York State.

Orthonomics said...

Joe and CharlieHall--I agree with you 100%. The problem that we have as a community is simple: tuition is too high! Is there a solution? I'd like to believe so. But, to even begin to reach a solution we need to start working as a community. Pooling resources is a must. There are many other musts.

I hope both of you will stick around as I dissect the issue from nearly every angle I can think of.

Anonymous said...

Thank you for the compliment. I look forward to our being part of the solution, rather than part of the problem.