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> The tax provision clearly wasn't intended to promote car ownership, so all of those people should be in jail, right? That's a red herring. Once he receives t
by jeremysalwen 7y ago
> The tax provision clearly wasn't intended to promote car ownership, so all of those people should be in jail, right?
That's a red herring. Once he receives the money from the tax break (the reward) in exchange for buying a house (the incentivized activity), what he does with that money is completely irrelevant, unless it somehow involves reducing home ownership.
- AnthonyMouse 7y agoBut it wasn't in exchange for buying a house. He was buying the house anyway, what he did was to take out a larger home loan and use the extra money to buy a car. This is the same general problem as assigning a jurisdiction to profits. Money is fungible. If you take out a $30,000 "home loan" and buy a $30,000 car, did you borrow $30,000 to buy a house or to buy a car? If you pay a million dollars to develop software in the US and then license it for ten million dollars in Europe, do you have a nine million dollar profit in the US or in Europe? Notice how the US is going to want to claim it's in the US and Europe is going to want to claim it's in Europe, and the company is going to want to claim it's wherever the tax rate is lower, but none of that is an answer to the question.