The High Cost of Raising Prices

[ivinsfan]

Im not alone in this venture, I have every intention of changing my residence to a income tax free state. This will give me at today's wealth between 10 and 20 THOUSAND more disposable income per year. They gouged me enough.

Didn't your paycheck and now your pension come from public money..i. E taxes.? Why do you use the word gouged?

 

[Midpack]

Im not alone in this venture, I have every intention of changing my residence to a income tax free state. This will give me at today's wealth between 10 and 20 THOUSAND more disposable income per year. They gouged me enough.

That is a certainly a lot for state & local, presumably you enjoyed a higher income to help make up the difference. Most of the income tax free states we've looked into make it up on property tax, personal property tax (cars & boats) and or sales tax. And some add impact fees just for the privilege of moving to their fine state...

 

[Moemg]

Around here at the local places Happy Hour prices are $3.50 or $4.00 for wine and mixed drinks .Beer is $2.50 . Tomorrow we are going to our favorite pizza place . Wine is $4.00 and it is very nice wine .Pizza is $8.00 and we end up taking some home . When they raised happy hour for $3.00 to $3.50 a lot of people complained . I just chuckled .

 

[CardsFan]

That was my first thought too.
But I don't think so. The business records would have to show how much gas he bought vs how much he sold, so that would be tricky.

He also owns (and spends most of his time at) an auto repair shop in the same neighborhood, which is where most of his income is from (I think). Talking to some of the old timers in the area, they say that the previous owner of the gas station had the same policy of very high prices, so it must work well enough. I'm just surprised, since he could easily have far more business if his prices were in line.

If the gas station has been around a long time it might be an environmental clean-up issue. He could be grandfathered to sell gas, but if he closes the pumps, the clean-up will cost $$$. Keep the pumps open, make a living servicing autos, and all is OK.

This may not be the case here, but I have a buddy that did exactly this.

 

[Rustic23]

Blue Collar Guy: You could shower all day for that price around here. First 2,000 gallons come with you $11 bill, after that it is $2 per 1,000 gallons.

 

[Blue Collar Guy]

Didn't your paycheck and now your pension come from public money..i. E taxes.? Why do you use the word gouged?

1) It was also from MY tax money 2) I have no longer have a desire pay 10 % of my income to taxes, plus I pay 12 % of my yearly spending to property taxes. thats gouging. **Updated answer***My own Governor said that the income tax structure is ABUSING higher income folks. Another poster 2 below this comment posted a link. NY is in first place, add in that I am in the city and it gets worse. I dont want to be in first place with taxes. I dont want to get gouged and abused.

 

[Blue Collar Guy]

That is a certainly a lot for state & local, presumably you enjoyed a higher income to help make up the difference. Most of the income tax free states we've looked into make it up on property tax, personal property tax (cars & boats) and or sales tax. And some add impact fees just for the privilege of moving to their fine state...

I totally agree with you. But in my state,my property tax is $6300, my sales tax is 8.875 %. My water and sewer is 2 thousand bucks.

 

[Rustic23]

Property tax, income tax, sales tax, they all add up.

https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/

This site list the states by total tax burden. I am not sure how they calculated it. California had 2.72% while Texas had 3.57. However, does it take into consideration that in general properties are cheaper in Texas. OK, I don't have a survey for that, I just know what I was paying in SF and then what I had to pay in Houston.

So, yes, according to the chart, Texas at has a lesser tax burden at 7.99%than say New York, or at 12.94%. I think, however, it would depend on your life style. If you want a big expensive home in Texas with no over 65 exemptions, and buy lots of stuff, your tax burden may be higher there..

 

[braumeister]

Most of the income tax free states we've looked into make it up on property tax, personal property tax (cars & boats) and or sales tax. And some add impact fees just for the privilege of moving to their fine state...

Agreed. This whole area of comparing the tax burden between different states can get complicated in a hurry.

We moved two years ago from Ohio to Kentucky and saw this firsthand. Cost wasn't the reason for the move, but it was interesting to compare.

First, the state income tax burden dropped dramatically because Kentucky doesn't tax retirement income. That includes pensions, Social Security, withdrawals from IRAs, everything. So we are only subject to state tax on dividends and interest in the taxable account. A very nice benefit!

Property taxes are more or less equivalent. Ours actually went up somewhat because our condo is valued at a higher cost than the house we moved from (both about 3,000 sq. ft.) The biggest difference is that Kentucky has a personal property tax on vehicles, whereas Ohio doesn't.

Utility rates are roughly the same. Our bills went down because our condo is much more energy efficient than the old house.

Of course, we now have the monthly HOA fee for the condo association, but I'm deliriously happy to pay that to get out from the constant maintenance chores we had at the old house.

 

[braumeister]

If the gas station has been around a long time it might be an environmental clean-up issue. He could be grandfathered to sell gas, but if he closes the pumps, the clean-up will cost $$$. Keep the pumps open, make a living servicing autos, and all is OK.

Wow! Something I never would have thought of, but it makes perfect sense.

 

[ivinsfan]

Florida is full of public service employees from NJ and New York who left town when they didn't get a net gain from taxes. Doesn't it all even out in the end?

 

[haha]

Hardly ever order wine at a restaurant but recently did here in the Seattle area. Ordered a bottle which they offered at a discount from their regular price. Enjoyed the wine very much so I looked it up online to purchase for home and was shocked to see a 4X markup. Obscene.

Well in Seattle, the city council wants everybody to make a minimum of $15/hr. So that means that the least skilled workers get $15, and a skilled cook or mix-master type bartender will get more. It is just impossible for a restaurant to stay in business for any time without high average tickets as even rents are being pushed up by the replacement of older commercial property that might have held restaurants by new building which is mainly apartments,

At least around here, the days of funky and cheap but good restaurants seem to be gone.

Ha

 

[rodi]

I'm with everyone here who skips the drink orders when dining out. Water is good. I'm not a soda drinker, and I'd rather have a glass of wine or cocktail at home afterwards - so I don't have to worry about driving, etc. (In general, I don't drink outside the house for that reason... and don't drink more than 2 glasses of wine in an evening unless it's a very special occasion and I'm not driving.)

I will say - that when travelling in Europe I'll have a glass of 'house wine' - and it's usually far better and far cheaper than what you can get at local restaurants... but I tend to go to more tratorie and osterie than ristoranti.... and we tend to eat while out walking or within walking distance of our lodging.

 

[brucethebroker]

I am shocked you can get a $3.50 glass of wine.. it cost $7 or more around here... which is a problem since DW wants one or TWO at every meal...


I have been a water guy for decades... I try not to ever buy a drink, but I have done so every once in awhile.... lately I have bought the $1.50 hot dog and drink at Sam's Club... but it is a big drink and I can refill just before leaving

I am new to the wine thing. (Well, a little Boonefarm in college....straight out of the bottle...). So, when we ordered wine for the first time at a restaurant, I asked DW why the the server only poured 1/2 a glass. Our friends thought I was joking and laughed. Expensive, and dinky! No more wine with restaurant meals for me!

 

[Callitaday2022]

About 9 years ago I used to buy some large frozen coffee drink at Starbucks, and for some reason $4.75 was tolerable, but when it went over $5.00 my threshold was hit and I've only got a couple while traveling in years.
Now I bring coffee to all places I go and it's cheap and better!

 

[brucethebroker]

Im not alone in this venture, I have every intention of changing my residence to a income tax free state. This will give me at today's wealth between 10 and 20 THOUSAND more disposable income per year. They gouged me enough.

Check out the property taxes before moving. We considered an income tax free state, then discovered the property taxes were nearly twice there than what they are back home. Seems like the govt. will get it one way or the other....

 

[brucethebroker]

That was my first thought too.
But I don't think so. The business records would have to show how much gas he bought vs how much he sold, so that would be tricky.

He also owns (and spends most of his time at) an auto repair shop in the same neighborhood, which is where most of his income is from (I think). Talking to some of the old timers in the area, they say that the previous owner of the gas station had the same policy of very high prices, so it must work well enough. I'm just surprised, since he could easily have far more business if his prices were in line.

Does he make in the rent in cigarettes and lotto tickets?

 

[CardsFan]

Just back from a trip to Lake Tahoe. Sticker shock! (Well not really, we have been there many times). If you want a view of the mountains or lake, Lunch is $50 for 2 (with just one beverage). Fortunately, we stayed with relatives at a (low end) condo, so we cooked most meals. Great time, love the lake, but prices are getting stupid!

As for most days at home, I just can't bring myself to order a $2.50 soda, when I actually prefer the free water.

 

[Marita40]

There's been a huge cost rise in pet products. Those little cans of kitty crack--aka Fancy Feast--were about 35 cents each 10 years or so ago and have steadily crept up to as much as 1.00 in some stores. I lost my big eater (3 per day) dear cat two months ago but along with his equally huge output and the rising cost of litter he kept me poor! And vet bills' enormous rise, his insulin costs--well, I am now really thinking that pet ownership has become very expensive for many.

 

[W2R]

Well in Seattle, the city council wants everybody to make a minimum of $15/hr. So that means that the least skilled workers get $15, and a skilled cook or mix-master type bartender will get more. It is just impossible for a restaurant to stay in business for any time without high average tickets as even rents are being pushed up by the replacement of older commercial property that might have held restaurants by new building which is mainly apartments,

At least around here, the days of funky and cheap but good restaurants seem to be gone.

Ha

I am so sorry to hear that the days of these restaurants are gone.

Trying to cheer you up.... think of this. With increasing restaurant costs, not to mention real estate and more, it sounds like Seattle is becoming more and more expensive. But no place is perfect and there is a silver lining to that cloud. Remember, in a place like Seattle you are paying at least some for location. I know you love that location! Lots to do, everything nearby, beautiful scenery, and IIRC your children are in that area too. I would guess that for you, the advantages of that location make the extra costs worthwhile.

 

[Blue Collar Guy]

Check out the property taxes before moving. We considered an income tax free state, then discovered the property taxes were nearly twice there than what they are back home. Seems like the govt. will get it one way or the other....

Thank you. I definitely will, Im just at a loss as to how Florida supports itself

 

[Blue Collar Guy]

There's been a huge cost rise in pet products. Those little cans of kitty crack--aka Fancy Feast--were about 35 cents each 10 years or so ago and have steadily crept up to as much as 1.00 in some stores. I lost my big eater (3 per day) dear cat two months ago but along with his equally huge output and the rising cost of litter he kept me poor! And vet bills' enormous rise, his insulin costs--well, I am now really thinking that pet ownership has become very expensive for many.

+1 on the vet. If my boy goes to the vet for anything other than a check up, one look at my face tells them to sock it to me.

 

[travelover]

Thank you. I definitely will, Im just at a loss as to how Florida supports itself

Estate taxes maybe? It is God's waiting room.

 

[scrabbler1]

Another way we see higher prices without the price actually rising is when the makers shrink the package size. In the last 6 or 7 years, I have seen the number of cookies in a Keebler's package of chocolate chip cookies get reduced twice. The first time they redid the package from 30 cookies to 27 cookies. Then, a few years later they reduced it from 27 cookies to 24 cookies. That's a 20% reduction, taken together. Without raising the price of the package itself, the regular price in my local supermarket is now well over $4 a pound, and I stopped buying it unless I can find it on sale for under $4 a pound. With my diabetes, I eat very few cookies in one sitting compared to a few years ago before I was diagnosed.


Potato chips is another item whose regular price is now well over $4 a pound, even when on sale. And like cookies, the package size varies a lot so you have to watch the unit pricing stickers on the store shelves.

 

[haha]

I am so sorry to hear that the days of these restaurants are gone.

Trying to cheer you up.... think of this. With increasing restaurant costs, not to mention real estate and more, it sounds like Seattle is becoming more and more expensive. But no place is perfect and there is a silver lining to that cloud. Remember, in a place like Seattle you are paying at least some for location. I know you love that location! Lots to do, everything nearby, beautiful scenery, and IIRC your children are in that area too. I would guess that for you, the advantages of that location make the extra costs worthwhile.

You are right, and I appreciate your kind thoughts.

Ha