Just the Tax

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Mo
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Re: Just the Tax

Post by Mo » 07 Nov 2017, 23:50

Oops, I meant Regus. They do temp office space rentals.

https://www.regus.com/
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D.A. Ridgely
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Re: Just the Tax

Post by D.A. Ridgely » 07 Nov 2017, 23:55

Warren wrote:
07 Nov 2017, 22:43
But rent is just paying for the use of something. No value is produced because you're renting something.
*sigh* The tenant values the premises more than the money he spends on rent and the landlord values the money more than leaving the premises vacant (or whatever other opportunity costs he may have), as a result of which both parties have more wealth. This is exactly how value is produced by trade; it's no different than purchase (or barter) for any other good or service.

Because the homeowner chooses to live in his property rather than rent it out, he stands in the same position a tenant would, so it makes perfect sense to impute the rental value of that property as value (and thus income) to him.

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fyodor
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Re: Just the Tax

Post by fyodor » 08 Nov 2017, 00:06

Mo wrote:
07 Nov 2017, 20:20
It's counterintuitive, but it is economic activity of a sort. Which is why imputed rent is part of GDP, for example. If it wasn't in GDP you could have two identical countries but with one difference, in country A, everyone owns their home and in country B everyone rents from someone else (so no one is in their own home). Without imputed rent calculations, country B would have a significantly higher GDP.
I guess I can see that. Calling it activity is still weird, but maybe it's like potential versus kinetic energy. And I don't know if such potential wealth should be taxed just because it's useful to account for in GDP calculation. (I know you're not per se advocating for that, just bringing up the idea.) Cause while I see your points versus Warren that renting is certainly a good/service, the imputation (?) taxation argument would imply you should be taxed on anything that could be rented, which is potentially everything that you own. I guess home ownership is probably just the only thing big enough for some governments (and the economists that measure GDP) to want to bother with....
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Jadagul
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Re: Just the Tax

Post by Jadagul » 08 Nov 2017, 00:14

Really, the imputed rental income thing makes sense if and only if you want to treat the house purchase as an investment.

It doesn't make sense to charge for the imputed car rental income, because the car is a consumption purchase and we treat it that way.

A house is an investment if you buy it and then rent it out to someone else. (I don't think anyone really disagrees with that). It's (mostly) consumption if you buy it and then live in it yourself.

One way to handle this is to treat the house purchase as a consumption purchase. Another is to treat the purchase as an investment purchase, but to treat the "living in the house" as a monthly consumption purchase paid for out of your investment proceeds.

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Mo
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Re: Just the Tax

Post by Mo » 08 Nov 2017, 00:23

Also, no one is going to build a lot of housing capacity if the only market is for owner occupied.
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fyodor
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Re: Just the Tax

Post by fyodor » 08 Nov 2017, 00:33

Mo wrote:
08 Nov 2017, 00:23
Also, no one is going to build a lot of housing capacity if the only market is for owner occupied.
Huh? Why not, if there's plenty of buyers? Or are you just saying there's always a bigger market for renters?
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fyodor
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Re: Just the Tax

Post by fyodor » 08 Nov 2017, 00:36

Aresen wrote:
07 Nov 2017, 19:14
fyodor wrote:
07 Nov 2017, 15:27
Aresen wrote:
07 Nov 2017, 15:07
A consumption tax only regime is not going to fly politically. It's even hard to sell even as just part of a tax package.

When the Mulroney government brought in the Canadian GST in 1990, the Conservatives were annihilated in the next election.

Whatever the merits economically of taxing consumption vs taxing savings, the average person is going to be angry at any tax that is 'regressive'.
Did (does?) the GST include a robust exemption?
No exemption, though there is a (modest) credit on income tax for low income earners.
Hopefully, for Jason's tax plan's ambitions, it was way too modest.
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Warren
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Re: Just the Tax

Post by Warren » 08 Nov 2017, 08:52

Mo wrote:
08 Nov 2017, 00:23
Also, no one is going to build a lot of housing capacity if the only market is for owner occupied.
HA HA HA HA
I mean, is that a joke?
THIS SPACE FOR RENT

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nicole
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Re: Just the Tax

Post by nicole » 08 Nov 2017, 09:17

fyodor wrote:
07 Nov 2017, 16:57
nicole wrote:
07 Nov 2017, 15:43
fyodor wrote:
07 Nov 2017, 15:03
And if the plan would result in more saving than in the current way of doing things, then I think we would want to call it successful in that regard. I don't see how your objection negates that. You seem to be comparing his plan to some idealized version of how it should work rather than to the status quo to justify why we shouldn't move towards it from the status quo...?

ETA: I'll add that more savings such that income plays a smaller role in taxation and such that people are less reliant on transfer payments are what would justify Jason's plan. (To be specific enough to avoid a charge of circularity)
No, I'm comparing his plan to an idealized version of his plan to say that if he wants to do what he says he wants to do, he should be pushing the ideal version.

I'm not saying anything about whether we should move toward it or anything about it vs. the status quo.
So -- you're actually good with Jason's idea, other than the house thing?
I don't know what "good with" means. Do I think it would be better than an income tax system? Sure, taxing wage income seems relatively bad within the universe of taxation. Do I think it would be just? No, because taxation is theft and living in a society is a horror that no one should have to go through. If I were designing a tax system based on my preferred way to oppress people, would it look like this? No, not at all; I would tax something *I* wanted to discourage, and consumption isn't at the top of the list. I, of course, would tax the shit out of childbearing.
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Eric the .5b
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Re: Just the Tax

Post by Eric the .5b » 08 Nov 2017, 13:30

Mo wrote:
07 Nov 2017, 20:20
It's counterintuitive, but it is economic activity of a sort. Which is why imputed rent is part of GDP, for example. If it wasn't in GDP you could have two identical countries but with one difference, in country A, everyone owns their home and in country B everyone rents from someone else (so no one is in their own home). Without imputed rent calculations, country B would have a significantly higher GDP.
It's the sort of economic activity that didn't happen. Even beyond the ethical angle, it sounds like a concept meant solely to inflate numbers. If I'm living in the place because I can't find a tenant to move in, it's downright fraudulent to say the rent I would be getting is actually happening.
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Eric the .5b
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Re: Just the Tax

Post by Eric the .5b » 08 Nov 2017, 13:49

Really, maybe we just need a, "How much you got?" straight tax of current assets, funds, etc. We constantly trend towards that anyway; the only real motivation for phantom rent taxes and the like is to make more taxable. So, we might as well just start at, "We tax everything!" and fight over the rate scheme.
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Jennifer
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Re: Just the Tax

Post by Jennifer » 08 Nov 2017, 14:03

JasonL wrote:
06 Nov 2017, 23:50
Jennifer you are taxing them now because you are taxing the income earned to pay for them and you are taking FICA. Is there something hard about that?
??? The income currently used to pay for such things as medical expenses is not "taxed now," because under our current system that money is deducted from one's taxable income. (For all the horror stories I've read about Mandalay Bay shooting victims facing six- or seven-figure medical bills, one economic hardship they are NOT going to face is "A significantly higher tax bill this year, solely because they are being taxed on their uninsured medical expenses, physical rehab therapy and other costs they incurred because a psychopath shot them at a concert." If anything, their federal tax obligation might drop all the way to zero, between lost wages and deductible medical costs.)
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JasonL
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Re: Just the Tax

Post by JasonL » 08 Nov 2017, 15:00

Ahh I forgot about itemized medical deduction above 10% of agi for out of pocket medical costs. Fair enough. If we are looking to simplify I don’t think we can go down this road of itemized special consumption exemptions though. Food is special. Housing is special. Clothes are special. Education is special, hey look nothing is taxable. So, yeah I think I’d keep the consumption structure. A multi year payment plan almost completely solves that problem.

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Jennifer
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Re: Just the Tax

Post by Jennifer » 08 Nov 2017, 15:13

JasonL wrote:
08 Nov 2017, 15:00
Ahh I forgot about itemized medical deduction above 10% of agi for out of pocket medical costs. Fair enough. If we are looking to simplify I don’t think we can go down this road of itemized special consumption exemptions though. Food is special. Housing is special. Clothes are special. Education is special, hey look nothing is taxable. So, yeah I think I’d keep the consumption structure. A multi year payment plan almost completely solves that problem.
It might solve the problem of "People cannot afford to pay their tax bill this year, so they're on a multiyear payment plan" but it will NOT solve the problem of massive resentment generated when people discover that "Trump's grandkid owes less tax on her seven-figure trust fund payout than some poor middle-class schlub owes on his medical bills after being injured at Mandalay Bay." That would be far too easy to portray as "Balancing the budget on the backs of suffering people so rich folks need not face any tax burdens."

Taxation is a necessary evil, so the best we can hope for is to at least keep the evilness to a minimum. Kicking a man when he's down -- say, by burdening a mass-shooting victim with a tax debt because he was a mass-shooting victim -- does not minimize the evil at all; if anything it adds to it. (And consider how much hay the anti-second amendment folks could make out of that: "No wonder our government won't support sensible gun control, between the payouts from NRA lobbyists and all those sweet sweet tax dollars they get every time a gunshot victim has to pay for medical treatment afterwards!" Some enterprising journalist could do a HELL of a story on "Here's how much tax money the feds were able to collect off the Mandalay Bay victims. And HERE'S how much money the feds made after that half-blind elderly driver mowed down people in the farmer's market. Here's the profit the feds made off the most recent church shooting in Texas. And HERE'S how much tax they collected after....")
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JasonL
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Just the Tax

Post by JasonL » 08 Nov 2017, 15:19

How does trumps grandkid pay less taxes than anyone else again?

ETA it would be dramatically factually wrong to say you are balancing the budget on the backs of victims or whatever. Overall all rich people would be paying WAY more taxes than they are now and that progressivity is how the budget would be balanced.

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fyodor
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Re: Just the Tax

Post by fyodor » 08 Nov 2017, 15:25

Jennifer, I think the cogent point here is that with a $25k exemption, most people in the at the lower earnings levels are likely to pay lower taxes under Jason's plan than they do now, even if they do encounter huge emergency expenditures.

I would add that I think the essence of Jason's plan could be workable and deemed preferable to the status quo even with a barnacle or two added, though I certainly recognize the possibility of slippery sloping into a lot more nonsense....
Last edited by fyodor on 08 Nov 2017, 15:26, edited 1 time in total.
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Mo
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Re: Just the Tax

Post by Mo » 08 Nov 2017, 15:25

JasonL wrote:
08 Nov 2017, 15:19
How does trumps grandkid pay less taxes than anyone else again?

ETA it would be dramatically factually wrong to say you are balancing the budget on the backs of victims or whatever. Overall all rich people would be paying WAY more taxes than they are now and that progressivity is how the budget would be balanced.
My understanding is this raises taxes on high earners and merely rich to benefit the really wealthy. The passthrough business cut hugely benefits people like the Trumps, combined with the elimination of the estate tax while maintaining step up basis is a huge giveaway. You can make a rational case for eliminating the estate tax if you eliminate step up basis, but there's no way to rationalize keeping step up while eliminating the estate tax.
his voice is so soothing, but why do conspiracy nuts always sound like Batman and Robin solving one of Riddler's puzzles out loud? - fod

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Jennifer
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Re: Just the Tax

Post by Jennifer » 08 Nov 2017, 15:33

JasonL wrote:
08 Nov 2017, 15:19
How does trumps grandkid pay less taxes than anyone else again?
That cute little kid whose dad made a big deal on Twitter a la "Ooh, Imma take half her candy and give it to lazy kids who stayed home to teach her about socialism" likely isn't spending her own money on her living expenses; she still has many years where it's her parents paying her bills.

Hell, if I suddenly had a big trust fund -- but likely would not give up the frugal habits I've acquired after a lifetime of near-poorness -- under your system with its 25K deduction per person, after I used my first big payout to buy a house for me and Jeff, I might never pay a penny in tax again, while my investments just keep rolling over and over, making me richer and richer and richer.... but it's not me paying anything toward keeping the government solvent, it's the guy who hasn't been able to work since he got shot in Las Vegas but his insurance won't cover his costs since he's from out of state so he has to pay through the nose for the privilege of burning through his life's savings to recover from his gunshot wounds. Under your plan, THAT guy has to pay more than I do.

Or that awful last year Jeff and I were in Loudoun County, both out of work and burning through our savings (our rent ALONE was over $18K per year, and that was a cheap rent by Loudoun County standards) -- under the current system, we at least paid far less income tax because our income was so low, AND because we were able to deduct such expenses as "Money Jeff paid to attend out-of-state job interviews, such as traveling and lodging costs, etc." and "money we spent moving to Atlanta for Jeff's new job." Under your consumption tax plan, however, our tax bill would have increased solely BECAUSE Jeff was unemployed (and thus had to spend extra money on traveling to out-of-town interviews, and moving to accept a new job several states away) ... again, we were already "down," economically, and under your plan the government would've penalized us for that. "Whoa, you lost your job and are incurring expenses to find a new one? Kickass! More tax money for us! Sucks to be you guys, though."
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Jennifer
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Re: Just the Tax

Post by Jennifer » 08 Nov 2017, 15:42

Building on my last post: more specifically, our tax bill during unemployment wouldn't even have gone up because of the money we spent on job-hunting and similar things, but solely because our savings/net worth decreased rather than increased every month. The out of work guy living off savings pays taxes BECAUSE he's living off savings, which is a sign of consumption.
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JasonL
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Re: Just the Tax

Post by JasonL » 08 Nov 2017, 16:15

The number of people who inherit ten million buy a house and never spend above 25k again is zero or close enough to zero it wouldn’t matter. Rich people spend money and that gets taxed. You do rich people things. You the unemployed are taxed at very low rates for very low consumption.

You seem to love the optics of current taxation and gosh golly deductions quite a bit more than I do and you seem to care about the actual policy impacts of it much less than I do.

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Jennifer
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Re: Just the Tax

Post by Jennifer » 08 Nov 2017, 16:28

JasonL wrote:
08 Nov 2017, 16:15
The number of people who inherit ten million buy a house and never spend above 25k again is zero or close enough to zero it wouldn’t matter. Rich people spend money and that gets taxed. You do rich people things. You the unemployed are taxed at very low rates for very low consumption.
When Jeff and I were both unemployed our consumption actually increased a bit, for the reasons I've already explained.
You seem to love the optics of current taxation and gosh golly deductions quite a bit more than I do and you seem to care about the actual policy impacts of it much less than I do.
On the contrary, the policy impacts are exactly why I think such a plan would not be accepted well at all. What policy impacts would you predict happening, after those enterprise-journalism pieces I mentioned upthread? "Here's how much tax money the feds were able to collect off the Mandalay Bay victims precisely because they were victims of a shooting. And HERE'S how much money the feds made off the people that half-blind elderly driver mowed down in the farmers' market because they were run over in a farmers' market. Here's the profit the feds made off the most recent church shooting in Texas. And HERE'S how much extra tax they collected off of Houstonians whose Hurricane Harvey damages weren't covered by their renters' or homeowners' insurance policies....." I can pretty much guarantee the result will not be a groundswell of Americans saying "Oh, yeah, this tax policy is MUCH more sensible and humane than our old system of taxing income at a progressive rate."
"Myself, despite what they say about libertarians, I think we're actually allowed to pursue options beyond futility or sucking the dicks of the powerful." -- Eric the .5b

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JasonL
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Re: Just the Tax

Post by JasonL » 08 Nov 2017, 16:50

How about ceo taxes go up by double digit percents unless they live like hermits?

Your examples are all optics in frankly stupid marginal cases and if you accept them the universe of possible changes to the tax code that actually could matter are very few. You are saying if regular taxes are much lower but buying stuff all in one year raises your taxes just once relative to that low level it’s a non starter. Your entire lifetime of taxation would be lower and if I do tiers the way I suggest, considerably so, but oh well.

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Jennifer
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Re: Just the Tax

Post by Jennifer » 08 Nov 2017, 17:01

JasonL wrote:
08 Nov 2017, 16:50
How about ceo taxes go up by double digit percents unless they live like hermits?

Your examples are all optics in frankly stupid marginal cases and if you accept them the universe of possible changes to the tax code that actually could matter are very few. You are saying if regular taxes are much lower but buying stuff all in one year raises your taxes just once relative to that low level it’s a non starter. Your entire lifetime of taxation would be lower and if I do tiers the way I suggest, considerably so, but oh well.
Luckily, neither left nor right-wing journalists would have any interest in writing stories about people hurt by frankly stupid marginal cases, right? Ergo, stories about people facing higher tax bills solely because they were victims of the mass shooting du jour or natural disaster of the week won't be written, and even if they were nobody would read them, and even if they did it's not like they'd lead to any calls for the government to Do Something about it.

And nothing in human nature would make people horrified by the thought "Whoa, you mean them folks' taxes went up solely because they suffered a grave misfortune?" either.
"Myself, despite what they say about libertarians, I think we're actually allowed to pursue options beyond futility or sucking the dicks of the powerful." -- Eric the .5b

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JasonL
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Just the Tax

Post by JasonL » 08 Nov 2017, 17:10

So, straight talk, let’s take average wages for a minute and say a $45k earner pays lifetime $300,000 in federal income taxes in current system. If my plan reduces that by $75k $80k or even $100k for the same worker, increased savings by 10-15% but you had the possibility of one year bigger bills say 3-4 times in a life, you are saying no way I don’t want it?

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nicole
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Re: Just the Tax

Post by nicole » 08 Nov 2017, 17:12

JasonL wrote:
08 Nov 2017, 17:10
So, straight talk, let’s take average wages for a minute and say a $45k earner pays lifetime $300,000 in federal income taxes in current system. If my plan reduces that by $75k $80k or even $100k for the same worker, increased savings by 10-15% but you had the possibility of one year bigger bills say 3-4 times in a life, you are saying no way I don’t want it?
I mean, they also don’t want catastrophic health insurance.
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