Happy ending to my first accident in Spain

I had been a bit worried that I would never hear back from the friendly policeman who rear-ended me earlier this week. I called his department and asked to speak to him, but he wasn’t there. Police officers here all go by number, not last name… Inspector Morse would be Agente 1072. Is that a legacy of ETA killing policemen with the wrong last name?

Coincidentally or not, he called me about 20 minutes later and we agreed to meet the next morning at a roundabout near where he worked.

I was a bit nervous when I pulled up and he was there with his police car and buddy, but he was super friendly, and had already filled out his side of the accident form “Parte de Accidentes modelo europeo” saying that that he didn’t stop in time and ran into me. (By the way, you can pick up the carbon-copy official version from the RACC). We both signed the forms and were on our way.

I was a bit confused when he said that said that the insurance company would send a small dog to look at my car, but then guessed that he was talking about an appraiser (now I know an appraiser is called a “perito”, with one r).

The next Bugaboo status stroller

Living in Sant Cugat means that a high status stroller is “un must”, so I’m looking forward to seeing the new Bugaboo Donkey (priced at a mere $1500, which I assume it will be 1500 euros here) driving around town. Will it be called the Bugaboo Burro here?

Whether there will be a four seat Bugaboo Donkey Opus Dei Edition, hasn’t yet been announced.

Spanish MEPs only fly in first class to save money

Spanish members of the European parliament got a lot of shit from the press for their recent vote to avoid getting a salary cut. One amusing sideshow was the pathetic attempt to justify flying first class, by claiming that it is actually cheaper in the long run:

Sosa Wagner [from UPyD] has stated that he deliberately did vote for first class flights, but then also changed the meaning of his vote at the behest of the leadership of his party. "For our situation, we sometimes have to cancel trips and traveling in coach means there’s a charge for a change, something that doesn’t happens in business . At the end flying, first class saves for the European Parliament. " This argument also has the support from other socialist deputies such as Iratxe Garcia and Ines Ayala. "The question is not yes or no for coach, that is a measure that can be good for show. There are other means of savings that should be explored, such as the European Parliament negotiating with airlines to reduce their rates."

I’m not sure what he means by “changing the meaning of his vote”… Almost as good as John Kerry’s “I voted for it before I voted against it”.

One thing to keep in mind when corporate people talk about “negotiated rates” with airlines, these rates are still significantly higher than what you or me would get from going to Rumbo or Expedia. That’s just the way it is.

Let’s see the prices for a direct flight from Madrid to Strasburg:

• Nonrefundable Economy – 250 euros
• Refundable Economy – 560 euros
• Business (refundable) – 1912 euros

It would be hard to argue that that flying business within Europe is ever worthwhile, since refundable economy tickets do in fact exist for a quarter of the price of a business class ticket.

Refundable tickets tend to be a rip-off for large companies, since the airline is basically including “insurance” in the ticket for cancellation. The company would be better off just taking a loss on the few trips people don’t take, which will probably average out much better.

Catchy alphabet songs

Our son’s kindergarten class sang the Catalan ABC song for us during open house day. I’ve been looking for a recording on YouTube, but I haven’t found one yet… it’s quite a bit more catchy than the English version.

Here’s a catchy Spanish version that I found on the way… If anyone has a recording of the Catalan version, let me know.

My first Spanish accident

I had my introductory car accident today, where a guy on a scooter smacked into my rear bumper going into a round-about. I don’t know how he could have not seen my extremely bright colored car, but who knows. So the guy that hit me shows me his police ID and then says that he doesn’t have his insurance papers with him.

What was I supposed to do? I snapped a picture of his scooter and his ID and he left, promising to call me and give me the information. So far, no call.

Next time, I’ll have sheet of paper and a pen in the car.

Here’s an example form that you can print out and keep with you so you know what details to collect.

Put your excess foreign tax credits to work

If as an American you’ve live in Spain long enough that your Beckham tax rate has expired and you are back to the marginal 45% tax bracket, your US rate will be lower than your Spanish. This means that effectively you won’t be taxed at all in the US on your Spanish income, and will in fact have an excess foreign tax credits.

Unfortunately you can’t use foreign tax credits against purely US income, so you may end up with more than you can use if you live here for a while.

One other limitation is that there are two baskets of foreign tax credits, “passive” and “general category”, which are each limited by the amount of income you have in that category. This can be somewhat annoying in Spain, since your salary, which is “general category” is taxed higher than interest, which is “passive” category.

What are these good for?

• If you US paid taxes on foreign income in the last two years, you can file an amended return and “carryback”. Since amended returns get extra scrutiny from the IRS, make sure that your returns for years when you expect to get a carryback are bulletproof. For example, the last two years of your “Beckham tax” status.
• The US/Spain tax treaty states that pension income is only taxed in the country of residence.
• IRA distribution or Roth conversions are considered “pension income”
• Spain does not recognize the concept of deferred income
• As a US citizen, you must still include the IRA distribution taxable income
• However, you can use the US tax treaty to treat the IRA income as Spanish income, and then apply any excess foreign tax credits against taxes you’d pay in the US.
• If you are under 65, you may want to do a Roth IRA conversion, rather than a withdrawal in order to avoid the 10% penalty.

If you have a substantial IRA, you can use this strategy to use the higher taxes you pay in Spain to offset taxes that you’d have to pay in the US.

“Stability” and Zapatero’s future

I found it quite funny how the “concerned” the right-wing press has been over the lack of clearly defined successor to Zapatero. How can we possibly have investor confidence in the country when we don’t know who the leader will be in 2012?

Since there is an election in 2012, whose results have not (as far as I known) been yet determined, perhaps we should cancel the election entirely, and just appoint the Rajoy as leader-for-life. For the sake of the country, you know.