dxmnkd316
Lucia Apologist
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
Sigh all you want, you clearly aren't understanding the math.
Sigh all you want, you clearly aren't understanding the math.
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Frayed Ends: Business, Economics, and Tax Policy 3.0
- Thread starter dxmnkd316
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In Scooby math, regressive tax rates minus payroll tax and eliminating most (all?) deductions = flat tax.
dxmnkd316
Lucia Apologist
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
See, I think we have stumbled on a pretty decent system. We're so close to having a great system. Sure it's complicated. But it's fixable without the need for an overhaul.
Just change capital gains to regular income and uncap the payroll tax.
Deductions like mortgage interest are actually a good thing. Housing might be one of the biggest drivers of the economy. Making it more affordable to own a house is a good thing. It builds wealth and helps the overall economy.
See, I think we have stumbled on a pretty decent system. We're so close to having a great system. Sure it's complicated. But it's fixable without the need for an overhaul.
Just change capital gains to regular income and uncap the payroll tax.
Deductions like mortgage interest are actually a good thing. Housing might be one of the biggest drivers of the economy. Making it more affordable to own a house is a good thing. It builds wealth and helps the overall economy.
Kepler
Si certus es dubita
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
I agree completely. A flat tax is not the answer. What it would allegedly gain in simplicity (something that would be immediately eviscerated by the political system) it would lose in the effect it would have on exacerbating inequality.
The way to go is progressive rates with all income (wages, capital gains, etc) being treated equally, uncapping the payroll tax, and either eliminating sales tax completely or having more aggressive exemptions for basic necessities. A large sales tax on luxury transactions (say, 50% on transactions above $10M, 100% above $100M) would help too, but as Piketty suggests in his book the only way to do that is at the global level, and we have no institutional infrastructure to do that and probably won't until the next world war teaches us that nation states are stupid).
In all honesty, a wealth tax would be much better than an income tax, since it would erode class differences more aggressively, but it would be even easier for the wealthy to evade it and it would be too intrusive to list all our assets every year. Property tax is much easier because property and its assessment stays pretty much the same from year to year -- all wealth would be a nightmare.
I agree completely. A flat tax is not the answer. What it would allegedly gain in simplicity (something that would be immediately eviscerated by the political system) it would lose in the effect it would have on exacerbating inequality.
The way to go is progressive rates with all income (wages, capital gains, etc) being treated equally, uncapping the payroll tax, and either eliminating sales tax completely or having more aggressive exemptions for basic necessities. A large sales tax on luxury transactions (say, 50% on transactions above $10M, 100% above $100M) would help too, but as Piketty suggests in his book the only way to do that is at the global level, and we have no institutional infrastructure to do that and probably won't until the next world war teaches us that nation states are stupid).
In all honesty, a wealth tax would be much better than an income tax, since it would erode class differences more aggressively, but it would be even easier for the wealthy to evade it and it would be too intrusive to list all our assets every year. Property tax is much easier because property and its assessment stays pretty much the same from year to year -- all wealth would be a nightmare.
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Kepler
Si certus es dubita
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
I have no problem with anything here. dxmnkd316 for Secretary of the Treasury.
I have no problem with anything here. dxmnkd316 for Secretary of the Treasury.
FlagDUDE08
Banned
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
Short-term capital gains are already taxed at the regular income rate, mostly to discourage flipping. If you're OK with quick flipping which would constantly raise prices on things (I've heard this argument from people like you before when it comes to oil futures), then by all means, dump long-term capital gains.
Here's why the payroll tax is capped: Social Security payments are only made based upon the income you previously made up to $106,000 (or whatever the limit is now). If you were to uncap this, you would have to pay out a theoretically unlimited amount. And good luck to getting them to agree to you just stealing their money and giving them nothing in return because they happen to have something; they'll just ex-patriate. We're seeing it happen in Western Europe with similar tax policies.
One of the biggest drivers of the increase in housing prices is not only the area in which you live in pretty much every term you can think of, but also the government subsidy programs (Fannie, Freddie, etc.). It's the same reason why college tuition has been rapidly increasing, except because student loans cannot be defaulted in bankruptcy court, there's no danger to it going underwater, like what happened in 2006, which caused housing prices to go down in most areas. Now with the 3.5% down subsidy loan in place, housing prices are back on the rise because sellers know they can get suckers to pay more based upon said incentives. The goal, at least based upon Dr. Day's warning, is to make housing completely unaffordable in terms of both purchase and property taxes that everyone lives in large slum-like apartments.
Short-term capital gains are already taxed at the regular income rate, mostly to discourage flipping. If you're OK with quick flipping which would constantly raise prices on things (I've heard this argument from people like you before when it comes to oil futures), then by all means, dump long-term capital gains.
Here's why the payroll tax is capped: Social Security payments are only made based upon the income you previously made up to $106,000 (or whatever the limit is now). If you were to uncap this, you would have to pay out a theoretically unlimited amount. And good luck to getting them to agree to you just stealing their money and giving them nothing in return because they happen to have something; they'll just ex-patriate. We're seeing it happen in Western Europe with similar tax policies.
One of the biggest drivers of the increase in housing prices is not only the area in which you live in pretty much every term you can think of, but also the government subsidy programs (Fannie, Freddie, etc.). It's the same reason why college tuition has been rapidly increasing, except because student loans cannot be defaulted in bankruptcy court, there's no danger to it going underwater, like what happened in 2006, which caused housing prices to go down in most areas. Now with the 3.5% down subsidy loan in place, housing prices are back on the rise because sellers know they can get suckers to pay more based upon said incentives. The goal, at least based upon Dr. Day's warning, is to make housing completely unaffordable in terms of both purchase and property taxes that everyone lives in large slum-like apartments.
ScoobyDoo
NPC
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
Sure, it's a great system when I pay a higher percentage than Mitt Romney does. You can rip my ideas all you want but at least with my ideas I pay less than Mitt does. Oh, and home ownership isn't a wealth driver. I own one. I know.
Sure, it's a great system when I pay a higher percentage than Mitt Romney does. You can rip my ideas all you want but at least with my ideas I pay less than Mitt does. Oh, and home ownership isn't a wealth driver. I own one. I know.
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
I agree. We need to get rid of gimmicky crap. Your two proposed changes help do that. Otherwise some radical scheme that blows up the economy is like cutting off your nose to spite your face.
I agree. We need to get rid of gimmicky crap. Your two proposed changes help do that. Otherwise some radical scheme that blows up the economy is like cutting off your nose to spite your face.
ScoobyDoo
NPC
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
Just more proof that the wealthy in this country are living on the backs of the poor.
And even more evidence.
http://www.cnbc.com/id/102778478?__source=xfinity|hero&par=xfinity
Just more proof that the wealthy in this country are living on the backs of the poor.
And even more evidence.
http://www.cnbc.com/id/102778478?__source=xfinity|hero&par=xfinity
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St. Clown
Liberal Rebel Scum, apparently
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
The only thing the housing deduction did was to make it more expensive to purchase a house from a pricetag perspective. Realtors and mortgage companies lobbied for it because they had obvious monetary interests. Once the interest deductions were allowed, prices for housing jumped a couple percentage points, as did mortgage rates at the time. People purchasing their first homes at the time saw no significant difference in their overall housing expenditures, and the same goes for all subsequent first-timers. The only people who benefitted from the deduction were those who had existing mortgages at the time the deduction was enacted.
The only thing the housing deduction did was to make it more expensive to purchase a house from a pricetag perspective. Realtors and mortgage companies lobbied for it because they had obvious monetary interests. Once the interest deductions were allowed, prices for housing jumped a couple percentage points, as did mortgage rates at the time. People purchasing their first homes at the time saw no significant difference in their overall housing expenditures, and the same goes for all subsequent first-timers. The only people who benefitted from the deduction were those who had existing mortgages at the time the deduction was enacted.
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
This makes no sense and I'm curious if you are actually a homeowner or not. Home prices are a function of supply and demand, not federal tax policy. So, if the feds eliminated the mortgage deduction tomorrow, people would still be clammoring to live in the same places they always gravitate to in the great search for jobs. Eliminate the mortage deduction and all you do is raise taxes on the middle class, while the uber wealthy experience no change in their financial status. As I said to joe, I'll say to you. Its not 1982 anymore. Not every tax benefit needs to go to the 1%.
This makes no sense and I'm curious if you are actually a homeowner or not. Home prices are a function of supply and demand, not federal tax policy. So, if the feds eliminated the mortgage deduction tomorrow, people would still be clammoring to live in the same places they always gravitate to in the great search for jobs. Eliminate the mortage deduction and all you do is raise taxes on the middle class, while the uber wealthy experience no change in their financial status. As I said to joe, I'll say to you. Its not 1982 anymore. Not every tax benefit needs to go to the 1%.
*I* pay a higher % than Mitt. (and probably the Clintons and George Soros). But as a bottom line, they pay a heck of a lot more than we do.
unofan
Well-known member
The mortgage interest deduction artificially increases demand, but I don't know that it's significant considering the size of the overall housing market and the requirements for getting a mortgage to begin with. Most likely, it merely allows people to buy a slightly bigger home than they would have before, it probably doesn't lock people out altogether. It's not like New York or San Francisco would suddenly fall to Midwest housing prices if the deduction were eliminated.
unofan
Well-known member
So? They make a really helluva lot more than you. That's not a reason they should pay a lower percentage.
ScoobyDoo
NPC
The Republican joke continues.
St. Clown
Liberal Rebel Scum, apparently
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
Yes, I am a homeowner, and I get the deduction just like many people around here. Like unofan said, the change in value does not keeping people out of the market entirely, it might change the size of the home or a couple options you put within the home.
It's really basic stuff. I have a monthly housing budget of $1,000/month, have saved $40,000. What can I afford for a home and a mortgage? Along comes the mortgage interest tax deduction, which might come out to $4,000-5,000 annually, that's going to change how much money I can now allot to my new home. Will it change by the full avg value of the mortgage interest deduction? Perhaps for some, likely not for others. Regardless, mortgage companies and real estate brokerage firms all figured out how to capture as much of that deduction as possible when it went into place. No, it's not going the only driving force to home prices, I never said it was, only that it moves the price a little higher as we all now have a slightly larger budget.
Basically, what looks like a good deal for consumers/electorate may not actually be the deal they think they're getting. But it sure does feel good and candidates had something fun to use on the campaign trail after it passed.
Yes, I am a homeowner, and I get the deduction just like many people around here. Like unofan said, the change in value does not keeping people out of the market entirely, it might change the size of the home or a couple options you put within the home.
It's really basic stuff. I have a monthly housing budget of $1,000/month, have saved $40,000. What can I afford for a home and a mortgage? Along comes the mortgage interest tax deduction, which might come out to $4,000-5,000 annually, that's going to change how much money I can now allot to my new home. Will it change by the full avg value of the mortgage interest deduction? Perhaps for some, likely not for others. Regardless, mortgage companies and real estate brokerage firms all figured out how to capture as much of that deduction as possible when it went into place. No, it's not going the only driving force to home prices, I never said it was, only that it moves the price a little higher as we all now have a slightly larger budget.
Basically, what looks like a good deal for consumers/electorate may not actually be the deal they think they're getting. But it sure does feel good and candidates had something fun to use on the campaign trail after it passed.
FlagDUDE08
Banned
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
Actually, if anything, it uses fallacy to make more money for those lending (i.e. banks), similar to the lottery's "I can't do math" tax. If there was no way to deduct the interest paid on the loan, you'd probably want to pay it off as soon as possible, especially if it's a high interest rate, yes? But if you givethe interest deduction, people thinking they're saving money by paying interest because they can deduct it from their taxes, when in all reality, they're paying more in the long run, not to mention the associated opportunity cost with said money, which we debated either on the last thread or the thread before.
Actually, if anything, it uses fallacy to make more money for those lending (i.e. banks), similar to the lottery's "I can't do math" tax. If there was no way to deduct the interest paid on the loan, you'd probably want to pay it off as soon as possible, especially if it's a high interest rate, yes? But if you givethe interest deduction, people thinking they're saving money by paying interest because they can deduct it from their taxes, when in all reality, they're paying more in the long run, not to mention the associated opportunity cost with said money, which we debated either on the last thread or the thread before.
FlagDUDE08
Banned
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
The percentage is not based upon the amount of income generated (which sounds like what is trying to be emotionally argued, regardless of whether or not that is the true concept), but rather where the income is generated. Everyone has the same opportunity at it.
The percentage is not based upon the amount of income generated (which sounds like what is trying to be emotionally argued, regardless of whether or not that is the true concept), but rather where the income is generated. Everyone has the same opportunity at it.
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
You've backtracked about as quickly as the Republicans over the Confederate Flag issue, but that's cool. Regardless your premise still makes little sense for most people. What you can afford to pay for a house is a function of your monthly income. Hence a lot of people with uneven incomes have trouble getting mortgages even if overall they make enough money in total for the year. Why? Because you can't skip a payment in months where you don't get paid a lot. So, the notion that you will receive some tax benefit the following April has little to no bearing on how much you can afford each month in the current year. What the credit does do is give people an incentive to buy instead of rent holding other costs even but the main driver on that is 99% supply and demand & jobs.
You've backtracked about as quickly as the Republicans over the Confederate Flag issue, but that's cool. Regardless your premise still makes little sense for most people. What you can afford to pay for a house is a function of your monthly income. Hence a lot of people with uneven incomes have trouble getting mortgages even if overall they make enough money in total for the year. Why? Because you can't skip a payment in months where you don't get paid a lot. So, the notion that you will receive some tax benefit the following April has little to no bearing on how much you can afford each month in the current year. What the credit does do is give people an incentive to buy instead of rent holding other costs even but the main driver on that is 99% supply and demand & jobs.
FlagDUDE08
Banned
Re: Frayed Ends: Business, Economics, and Tax Policy 3.0
You might not be able to skip a payment, but some banks (such as Citizens) will defer your next payment if you "overpay" in a particular month. Why? They want to earn as much interest as possible, and requiring a set payment amount every month does not allow them to make back that interest. Be very careful, though, because some lending institutions, especially the crowdfunders, will not do that.
You might not be able to skip a payment, but some banks (such as Citizens) will defer your next payment if you "overpay" in a particular month. Why? They want to earn as much interest as possible, and requiring a set payment amount every month does not allow them to make back that interest. Be very careful, though, because some lending institutions, especially the crowdfunders, will not do that.
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