4 ms·

If he makes $1.5m/ year and his net worth is only $8m, he's not very good with money. My feeling on taxes is likely overly simple. Take the median price of a h

If he makes $1.5m/ year and his net worth is only $8m, he's not very good with money. My feeling on taxes is likely overly simple. Take the median price of a home in the area and divide it by 4. If people make less than that, they shouldn't pay any taxes. Then people should pay flat rate for every dollar above that.

11thEarlOfMar 6y ago
That's interesting. The median home price in the US (it varies dramatically by region, I need to simplify first) is $295,000. Divided by 4 is about $74,000. The median household income (using household since you're using house prices) is $69,000. The actual numbers would need to change for this to work, maybe it needs to be 1/10th the median home price as the threshold, for example. But it's interesting to think through the impact this type of approach would have on home prices. I'm confident the tax rates and taxable thresholds could be worked out to generate the revenue needed, but to what extent would people be incentivized to move to areas with lower home prices? Taking an extreme example, the median home price in Santa Clara County is $1,395,000. If we use the 10% threshold, families would not pay taxes if their household income were below $139,500. The median household income is $124,000. Income and housing prices are not linearly corelated, so it would need some type of non-linear scaling. But at the heart of it, housing is generally the greatest family expense and perhaps it makes sense to use that in the approach to taxing income. Come to think of it, perhaps that's in effect what the mortgage interest deduction does.
- ogre_codes 6y ago
  I was going off the top of my head. What I was intending was for people to not get taxed until they can afford to buy a home in their locale. A mortgage payment should be 1/4 of your income which is where I came up with 1/4, but I commingled ideas here and said the home price. It was a seat of the pants attempt to make taxation based on actual living costs. (and in retrospect not great for a variety of reasons). The big point is people who can't afford basic living expenses shouldn't be taxed.
  - 11thEarlOfMar 6y ago
    Do you think UBI would accomplish that, at least partially? It would ensure survival-level income, even for unemployed persons.

11thEarlOfMar 6y ago

That's interesting. The median home price in the US (it varies dramatically by region, I need to simplify first) is $295,000. Divided by 4 is about $74,000. The median household income (using household since you're using house prices) is $69,000. The actual numbers would need to change for this to work, maybe it needs to be 1/10th the median home price as the threshold, for example. But it's interesting to think through the impact this type of approach would have on home prices. I'm confident the tax rates and taxable thresholds could be worked out to generate the revenue needed, but to what extent would people be incentivized to move to areas with lower home prices? Taking an extreme example, the median home price in Santa Clara County is $1,395,000. If we use the 10% threshold, families would not pay taxes if their household income were below $139,500. The median household income is $124,000. Income and housing prices are not linearly corelated, so it would need some type of non-linear scaling. But at the heart of it, housing is generally the greatest family expense and perhaps it makes sense to use that in the approach to taxing income. Come to think of it, perhaps that's in effect what the mortgage interest deduction does.

ogre_codes 6y ago
I was going off the top of my head. What I was intending was for people to not get taxed until they can afford to buy a home in their locale. A mortgage payment should be 1/4 of your income which is where I came up with 1/4, but I commingled ideas here and said the home price. It was a seat of the pants attempt to make taxation based on actual living costs. (and in retrospect not great for a variety of reasons). The big point is people who can't afford basic living expenses shouldn't be taxed.
- 11thEarlOfMar 6y ago
  Do you think UBI would accomplish that, at least partially? It would ensure survival-level income, even for unemployed persons.