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If you have a very small percent of your population pay an ever increasing share of the tax burden, it’s quite easy for them to avoid it (move to Florida). This

If you have a very small percent of your population pay an ever increasing share of the tax burden, it’s quite easy for them to avoid it (move to Florida). This problem has hit NY and Connecticut especially hard. Here is a story from 2016 of how a single resident moving from New Jersey put the entire state’s budget at risk https://www.nytimes.com/2016/05/01/business/one-top-taxpayer-moved-and-new-jersey-shuddered.html https://www.nytimes.com/2016/05/01/business/one-top-taxpayer... The truth is that if you want to dramatically increase taxes collected, you need a broad-based tax that hits the middle class. But the middle class hates taxes as much as everyone else! And therein lies the problem for politicians. They can continue to bash the rich, but when push comes to shove soaking them won’t solve the problem. Seizing all of Bill Gates money will only fund the federal deficit (over $1 trillion this year alone) for a few months. And then what to do? One enormous, immoral handout to the middle class is the mortgage interest tax deduction and the fixed-rate 30 year mortgage which are simply subsidized handouts to people well-off enough to purchase property. People have come to think this is a right, when in reality all taxpayers are handing over money to those rich enough to purchase property. Only the USA has the fixed-rate mortgage because it’s bad business for banks. Eliminating this would be a much more economically logical way to increase the tax take than soaking the rich, but I guarantee there is 0% chance of this happening because, again, no one likes paying taxes!

Ididntdothis 7y ago
A lot of the long term deficits came from tax cuts mainly for upper incomes. I don’t see why those couldn’t be reverted. The whole line “bashing the rich” doesn’t make sense to me. They had it really good over the last few decades compared to most other citizens.
mcny 7y ago
> If you have a very small percent of your population pay an ever increasing share of the tax burden, it’s quite easy for them to avoid it (move to Florida). This is why I like the idea of a federal property tax and a federal VAT. Sure, these taxes are not exactly progressive but couple high taxes with generous rebates (my own proposed name-pending housing allowance to soften the super high annual seven percent of property value federal property tax) in addition to the already well known freedom dividend (USD 1000 per month universal basic income) by one of the Presidential candidates. Taxation at the state or local level can't work. If we enshrine interstate commerce, we cannot allow capital/wealth to pit communities against one another. Look at Kansas City, Missouri. It is ridiculous that it has to keep offering lower taxes for businesses to not move across state line to Kansas (because Kansas City, Kansas keeps offering lower taxes). State and local governments are NOT sovereign and we must take away taxation from them for their own good. Canada apparently has a carbon tax that gives people money back so as long as your carbon footprint isn't too much, you don't pay a lot in additional taxes.
- foogazi 7y ago
  > This is why I like the idea of a federal property tax and a federal VAT Was just thinking how horrible this would be - there would be no escape.
  - mcny 7y ago
    Don’t worry. I do not have the power to implement a seven percent federal property tax with no exceptions. More importantly, I would NOT implement it even if I had that power. There would be way too much chaos and suffering in the short term even with my very limited conscience.
chronotis 7y ago
You used to be able to deduct _all_ interest expenses, including things like car loan and credit card interest. They removed those deductions back in the '80s but kept the home mortgage deduction as lots of small businesses dual-purpose their property for working and living in. Fully repealing the mortgage interest deduction would, at this point, recover ~$25B/year, or a little over 2% of the current annual deficit. I suspect the political cost to touching the MID again is much higher than the fiscal benefit to the deficit.
- fred_is_fred 7y ago
  The MID was already quite well touched, groped actually, with the last tax cuts. Much less people use it because the standard deduction was raised so significantly that very few itemize anymore.
seattle_spring 7y ago
I'm so confused. Why is it immoral to have tax cuts to provide shelter for the middle class, but not immoral to have tax cuts so the rich can have 3 megayachts instead of 2?
- seibelj 7y ago
  Why is it moral to allow the poorest taxpayers to subsidize property-owner tax deductions?
  - seattle_spring 7y ago
    I didn't realize that the owners of 3 megayachts are considered the poorest taxpayers.
    - seibelj 7y ago
      Why should anyone without property pay the taxes of those with property? If I buy a rental property with a mortgage, I then extract rent from citizens as they then subsidize my mortgage payments. I mean, a good deal for me, but not for the renters!
      - seattle_spring 7y ago
        SALT deductions are not the same as deducting interest as an expense for a rental property. If you removed SALT entirely then landlords would still get the benefit.
      - foogazi 7y ago
        > Why should anyone without property pay the taxes of those with property? Tenants don’t pay property taxes
cryptica 7y ago
Taxes don't make sense in a fiat system where the government could just print as much money as it needs anyway. Income tax hurts income earners, not asset holders. The system should not incentivize people to own more assets, it should incentivize them to produce more value. With the right regulatory framework and good separation of institutions, it would be much more efficient for the government to just print the money it needs directly. I don't buy the argument that this would cause capital flight. The government has many tools at their disposal to prevent that. It doesn't matter in the long term if rich people dump all their stocks all at once and move overseas; that would create significant opportunities for smaller local investors to replace them because most of the value-producing companies are on the ground; the infrastructure and the workers cannot be moved easily and that's where the real value is.
- plutonicks 7y ago
  Interesting argument and its true that income taxes hurt production and producers. My biggest challenge with the idea of governments printing the money they need is that there would be no accountability. It is reasonably apparent that governments are not accountable enough for their actions. i.e. why would they only stop at what they need when they could print 1M and give it to everyone or people who vote for them. And when that 1M is worthless, print another 10M for everyone. As imperfect as the tax system is there is still a theoretical trace of accountability. Budgets need to be paid through taxes, taxes impact people, people vote for governments, governments create budgets. I think we need to move towards a system with MORE accountability, less wasteful spending and less deferred debt. Interestingly enough this probably means broadening the tax base, where both rich and poor pay more of the share of total tax. Only then will people have "buy in" to the government and the desire to hold them to account
  - cryptica 7y ago
    >> My biggest challenge with the idea of governments printing the money they need is that there would be no accountability. I think this is a good argument but there could be some kind of institutional structure to create accountability. Kind of like the separation between the Federal Reserve and the Government. We need a structure that makes it difficult for the government to get the money. I think there is a difference between making it difficult and making it complicated. Right now it's not difficult for the government to get money somehow, it's just complicated but this complication just creates more bureaucratic jobs and makes the economy less efficient.
apta 7y ago
> immoral handout to the middle class is the mortgage interest tax deduction Quite ironic because it's interest itself that is extremely immoral and parasitic.
foogazi 7y ago
> Only the USA has the fixed-rate mortgage because it’s bad business for banks. The US is not the only country with fixed rate loans You can get a variable rate loan if you are “rich enough” to buy a house >no one likes paying taxes! Agreed

Ididntdothis 7y ago

A lot of the long term deficits came from tax cuts mainly for upper incomes. I don’t see why those couldn’t be reverted. The whole line “bashing the rich” doesn’t make sense to me. They had it really good over the last few decades compared to most other citizens.

mcny 7y ago

> If you have a very small percent of your population pay an ever increasing share of the tax burden, it’s quite easy for them to avoid it (move to Florida). This is why I like the idea of a federal property tax and a federal VAT. Sure, these taxes are not exactly progressive but couple high taxes with generous rebates (my own proposed name-pending housing allowance to soften the super high annual seven percent of property value federal property tax) in addition to the already well known freedom dividend (USD 1000 per month universal basic income) by one of the Presidential candidates. Taxation at the state or local level can't work. If we enshrine interstate commerce, we cannot allow capital/wealth to pit communities against one another. Look at Kansas City, Missouri. It is ridiculous that it has to keep offering lower taxes for businesses to not move across state line to Kansas (because Kansas City, Kansas keeps offering lower taxes). State and local governments are NOT sovereign and we must take away taxation from them for their own good. Canada apparently has a carbon tax that gives people money back so as long as your carbon footprint isn't too much, you don't pay a lot in additional taxes.

foogazi 7y ago
> This is why I like the idea of a federal property tax and a federal VAT Was just thinking how horrible this would be - there would be no escape.
- mcny 7y ago
  Don’t worry. I do not have the power to implement a seven percent federal property tax with no exceptions. More importantly, I would NOT implement it even if I had that power. There would be way too much chaos and suffering in the short term even with my very limited conscience.

chronotis 7y ago

You used to be able to deduct _all_ interest expenses, including things like car loan and credit card interest. They removed those deductions back in the '80s but kept the home mortgage deduction as lots of small businesses dual-purpose their property for working and living in. Fully repealing the mortgage interest deduction would, at this point, recover ~$25B/year, or a little over 2% of the current annual deficit. I suspect the political cost to touching the MID again is much higher than the fiscal benefit to the deficit.

fred_is_fred 7y ago
The MID was already quite well touched, groped actually, with the last tax cuts. Much less people use it because the standard deduction was raised so significantly that very few itemize anymore.

seattle_spring 7y ago

I'm so confused. Why is it immoral to have tax cuts to provide shelter for the middle class, but not immoral to have tax cuts so the rich can have 3 megayachts instead of 2?

seibelj 7y ago
Why is it moral to allow the poorest taxpayers to subsidize property-owner tax deductions?
- seattle_spring 7y ago
  I didn't realize that the owners of 3 megayachts are considered the poorest taxpayers.
  - seibelj 7y ago
    Why should anyone without property pay the taxes of those with property? If I buy a rental property with a mortgage, I then extract rent from citizens as they then subsidize my mortgage payments. I mean, a good deal for me, but not for the renters!
    - seattle_spring 7y ago
      SALT deductions are not the same as deducting interest as an expense for a rental property. If you removed SALT entirely then landlords would still get the benefit.
    - foogazi 7y ago
      > Why should anyone without property pay the taxes of those with property? Tenants don’t pay property taxes

cryptica 7y ago

Taxes don't make sense in a fiat system where the government could just print as much money as it needs anyway. Income tax hurts income earners, not asset holders. The system should not incentivize people to own more assets, it should incentivize them to produce more value. With the right regulatory framework and good separation of institutions, it would be much more efficient for the government to just print the money it needs directly. I don't buy the argument that this would cause capital flight. The government has many tools at their disposal to prevent that. It doesn't matter in the long term if rich people dump all their stocks all at once and move overseas; that would create significant opportunities for smaller local investors to replace them because most of the value-producing companies are on the ground; the infrastructure and the workers cannot be moved easily and that's where the real value is.

plutonicks 7y ago
Interesting argument and its true that income taxes hurt production and producers. My biggest challenge with the idea of governments printing the money they need is that there would be no accountability. It is reasonably apparent that governments are not accountable enough for their actions. i.e. why would they only stop at what they need when they could print 1M and give it to everyone or people who vote for them. And when that 1M is worthless, print another 10M for everyone. As imperfect as the tax system is there is still a theoretical trace of accountability. Budgets need to be paid through taxes, taxes impact people, people vote for governments, governments create budgets. I think we need to move towards a system with MORE accountability, less wasteful spending and less deferred debt. Interestingly enough this probably means broadening the tax base, where both rich and poor pay more of the share of total tax. Only then will people have "buy in" to the government and the desire to hold them to account
- cryptica 7y ago
  >> My biggest challenge with the idea of governments printing the money they need is that there would be no accountability. I think this is a good argument but there could be some kind of institutional structure to create accountability. Kind of like the separation between the Federal Reserve and the Government. We need a structure that makes it difficult for the government to get the money. I think there is a difference between making it difficult and making it complicated. Right now it's not difficult for the government to get money somehow, it's just complicated but this complication just creates more bureaucratic jobs and makes the economy less efficient.

apta 7y ago

> immoral handout to the middle class is the mortgage interest tax deduction Quite ironic because it's interest itself that is extremely immoral and parasitic.

foogazi 7y ago

> Only the USA has the fixed-rate mortgage because it’s bad business for banks. The US is not the only country with fixed rate loans You can get a variable rate loan if you are “rich enough” to buy a house >no one likes paying taxes! Agreed