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If you only tax money people don't spend, i.e. only tax savings, then you discourage saving. Taxes aren't just about fairness, they're about setting the right
by klipt 6y ago
If you only tax money people don't spend, i.e. only tax savings, then you discourage saving.
Taxes aren't just about fairness, they're about setting the right incentives. Do you think discouraging saving is a good incentive?
- bradleyjg 6y agoI agree it would be problematic to tax savings. However, if you have a two earner household a nanny is arguably a cost of revenue. I could imagine a system that allowed cost of revenue expenses to be deducted but not, say, a trip to bora bora.
- deleted 6y ago[deleted]
- klipt 6y agoOkay, but saying there should be more tax incentives for childcare is different to saying you should be able to deduct all your workers' payroll taxes (which could equally apply to someone in a mansion whose staff includes a cook, a butler, and a pilot who flies them to Bora Bora every year). You actually can deduct some childcare costs with a Dependent Care Flexible Savings Account. It's only up to 5k a year though which is lower than the cost of even the cheapest daycares in many areas.
- LorenPechtel 6y agoHow about domestic help/childcare/dogwalking etc is deductible up to 50% or perhaps 33% of what you would reasonably would make in the time it would take you to provide whatever service they are providing. (Divide your employment income by the hours you typically spend in a year doing that job to get an hourly rate. You can't deduct such expenses on days you aren't working except if the nature of their pay means it continues anyway. Your taking a day off work doesn't mean you get to not pay your nanny, thus that expense remains deductible.)
- deleted 6y ago[deleted]