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Cheques (or checks for those who can't spell)

With the opening of a bank account here comes a large bundle of cheques, not just in one pad but in a box of many pads. Why will I need so many cheques?

America is still working out how to do electronic bill payment, it appears, so most of the bills that are paid are done by writing out a cheque. I haven't written out a cheque to pay a bill in...maybe 5 years and it feels like stepping back in time, to another era, to be confronted with the expectation of needing to do it.

Now it isn't just the writing out the cheque that is a problem but the frequency of doing so. Utilities, here in the USA, are billed monthly, rather than quarterly in Australia. So if I have 3 utilities, rent, maybe a credit card or two, that's writing out 70-90 cheques over a 12 month period. Given there is no equivalent of Australia post to pay them at, that's also a similar number of envelopes and stamps!

My favourite method for paying bills in Australia is to use BPAY. Up until recently, using BPAY was restricted to giving my bank a BPAY company code, along with a customer id for that company and the amount to pay the company. There have been multiple ways to do this, over the phone or over the Internet. Not unsurprisingly there has been a very rapid take up of BPAY, as electronic banking has meant companies have less need to worry about handing cheques or cash from people paying bills.

I should say that the bank I've signed up with does have an online capability and online bill payment facilities according to their literature, but I've yet to go and investigate. With stories of some electronic bill payment services printing cheques and posting them off to companies on your behalf, I'm not yet 100% convinced that it is all eletronic.

( Mar 02 2006, 11:43:33 AM PST ) Permalink Comments [4]

Tax and health in the USA

So now I'm here in the USA, I'm starting to get to know the system a bit better.

The first big ... about the USA is the health system.

In Australia, there is a Government medicare that provides visible benefit to everyone. Everyone is associated with a medicare card (the number on this is not used for anything but medicare related items.) With one of these, we get a rebate from the government for visiting a doctor or, in the case of clinics that do bulk billing, we only pay the amount not covered by the government. End result, visiting the doctor costs less than $30 (Australian). Of course the doctor is the one that will check heart rate and blood pressure, if required.

In the USA, the shortest visit to a doctor will involve someone other than the doctor taking your blood pressure and pulse (why? is this a poor attempt at a value added service, to make you feel better at coughing up the money for the bill?) will usually set you back in excess of $200 (in US dollars.)

What does the medicare tax pay for?

Which brings me on to being taxed.

On pure income tax alone, the USA has a lower tax rate than Australia.

BUT, on pay slips, there is also a "Social Security Tax" and "Medicare Tax", with the end result being, after all the US taxes are taken out of my gross salary, for $X in the USA, I pay 39% in taxes (and I'm not in the highest tax bracket) and in Australia, for the same $X, I pay 34% in taxes. And then there is property tax (to pay for schools, roads, etc) if you own a property in the USA of 1% of the purchase price per annum.

You might argue that Australia has a GST of 10%. USA has a sales taxes of between 8% and 8.5% in all but a few states (California is not one of them) which amounts to roughly the same thing.

I'm sure I'll work out why this wanna-be police state is a better place to live sometime soon...

( Mar 01 2006, 12:15:00 PM PST ) Permalink Comments [23]