NEW YORK -- U.S. household debt rose in the latest quarter by the most since before the recession, a sign that Americans may be nearing the end of a multiyear belt-tightening trend, data from the Federal Reserve Bank of New York showed Tuesday.
Total consumer debt rose 2.1 percent to $11.52 trillion in the fourth quarter of 2013 from $11.28 trillion in the third quarter, the New York Fed said in its quarterly household debt and credit report. The increase, $241 billion, marked the biggest quarterly jump since the third quarter of 2007.
Even with the increase, total household indebtedness remains 9.1 percent below its peak of $12.68 trillion in the third quarter of 2008, reflecting the extensive deleveraging by households in the years following the housing market collapse and financial crisis. %VIRTUAL-article-sponsoredlinks%Nevertheless, the report also marked the first year-on-year increase in household debt since the crisis, perhaps signaling that the deleveraging cycle has run its course.
Americans boosted credit card balances, borrowed to buy homes and cars and took on more student debt. The only major category to see a decline was home equity lines of credit, which dropped by $6 billion to $529 billion.
"This quarter is the first time since before the Great Recession that household debt has increased over its year-ago levels suggesting that after a long period of deleveraging, households are borrowing again," said Wilbert van der Klaauw, senior vice president and economist at the New York Fed.
Auto loan balances jumped by $18 billion, the 11th straight quarterly increase, although new loan originations fell to $88 billion from $97.4 billion.
Reflecting another U.S. trend, student debt rose again with outstanding balances up $53 billion to $1.08 trillion in the fourth quarter. Delinquency rates fell, however, with 11.5 percent of loans behind by 90 days or more, down from 11.8 percent in the third quarter.
Overall household delinquency rates dropped to 5 percent in the three months to Dec. 31 from 5.3 percent in the third quarter, extending a post-recession trend.
10 Weird Ways States Tax You (and Don't)
Household Debt Rises at Fastest Pace Since 2007
The Aloha State legislature, in an effort to preserve the uniqueness of their island paradise, has an "Exceptional Tree" tax allowance. Landowners can deduct up to $3,000 from their income for expenses such as pruning and fertilization for any tree designated as rare, big, old or a combination thereof. That's per tree. Top-bracket earners taxed at the state's highest rate (11 percent) would save $330 via the deduction.
The work must be done by a certified arborist, and the deduction can be claimed only every third year. The deduction was enacted in 2004. Hawaii has had a list of "Exceptional Trees" since 1975, and there are now estimated to be more than a thousand thus designated.
Maine legislators, a flinty bunch, don't see the harm in taxing anyone who deals in their official state fruit -- blueberries, at the rate of 1.5 cents per pound. The resulting revenues -- more than $1.6 million to state coffers in the fiscal year that ended in June 2013 -- are used to promote the crop and agricultural research.
The state also taxes harvesters and processors of hard-shell clams (known in the state as mahogany quahogs) at $1.25 a bushel, but state revenues for that are much lower. The taxes are levied at the wholesale level, but naturally, they end up being passed on to the consumer.
The Yellow Hammer State is the last in the union to tax a deck of cards as if it were a "vice," like alcohol and tobacco.
Taxing decks of cards, associated with gambling, was once fairly common, but most states have since set up separate control boards to regulate liquor and tobacco, and have let the cards slide.
But in Alabama, you'll still pay a 10 cent sales tax on any pack of cards you purchase. Retailers also have to pay $2 to the state each year for the privilege of selling playing cards.
"Merlyners" love their pollution-beleaguered Chesapeake Bay, the largest marine estuary in the U.S. In 2013, in part to meet federal pollution-control mandates, Free State legislators enacted fees on property owners in Baltimore and nine other Maryland counties, aimed at curbing storm water runoff. The fees were meant to fund programs to improve the water quality of the Bay.
Sounds simple enough, but the way Maryland legislators wrote the law has led to an angry backlash in some corners against this so-called "Rain Tax."
One way localities can calculate the tax is by measuring how much of a landowner's tract is "impervious" to precipitation seeping into the ground. So the more you've developed it with buildings, driveways, tennis courts and the like, the less it will absorb and the more you pay. That's how the tax is being implemented (through aerial and satellite photos) in Montgomery County, Md., a heavily developed suburb of Washington, D.C., and landowners are up in arms.
Other counties have rebelled, opting to pay for the pollution control programs out of general funds rather than pass the cost onto landowners. Maryland’s Republican candidate for governor, David Craig, has made the law's repeal part of his platform for the 2014 election.
The Sunflower State is among a bevy of jurisdictions that allows sale of lower-alcohol beer (the term of art is "cereal malt beverage") in convenience and grocery stores.
But Kansas also taxes "3.2" beer differently—and there lies the rub. At a liquor store, all products, including, say, a conventional six-pack of Budweiser (with 5 percent alcohol by volume), are taxed at a special rate of 8 percent. At the convenience store down the street, however, ordinary sales tax is levied on the lower-alcohol, cereal malt beverage bottle of Bud. That often ends up being more than the 8 percent alcohol tax. In Pomona, Kans., for example, the effective rate on the weaker beer would be 9.7 percent. Go figure.
When it comes to taxation, the rule is generally the stronger the booze, the higher the tax (that's why Kansas's beer tax scheme is an anomaly). California follows that curve, but at 100 proof, you better be ready to pay through the nose.
Distilled spirits are taxed at $3.30 a gallon if below 100 proof, or 50 percent alcohol. Go over that, like with Bacardi 151, and the tax doubles to $6.60. Maryland also notes the 100 proof point, but it only adds 1.5 cents per proof, per gallon to the relatively modest liquor tax of $1.50 per gallon, taking the Bacardi 151 to $2.27 per gallon.
Entertainment venues pay a business tax to the Silver State ranging from 5 to 10 percent on admissions fees (and food, drink and merchandise sales) whenever there’s live entertainment going on.
There are exemptions, however, including this one, for businesses that provide " ... Instrumental or vocal music, which may or may not be supplemented with commentary by the musicians, in a restaurant, lounge or similar area if such music does not routinely rise to the volume that interferes with casual conversation and if such music would not generally cause patrons to watch as well as listen."
So your piano player can play "Feelings" softly and even crack a few jokes, tax-free, for your business. Just make sure they're not funny enough to attract attention.
Want to own a plush or fuel-thirsty ride? That’ll cost you extra in the Garden State.
Cars that cost $45,000 or more or have a combined EPA fuel-mileage average of 19 or below pay an additional 0.4 percent on top of New Jersey’s 7 percent sales tax.
Businesses in D.C. that sell food or alcohol are required to charge customers 5 cents for every paper or plastic disposable bag they take. The store gets to keep a penny, and the balance goes to a government fund dedicated to cleaning up the Anacostia River.
Consumers and storekeepers grumbled at the program's debut in 2010. It has raised about $7 million so far, below expectations, but the program’s designers see this as a positive sign -- that shoppers have opted to bring their own reusable bags.