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> How is it not unfair that, for example I can’t deduct rent from my income? Tax policy isn't set by moral arguments, it's set by government need for revenue w
by rsj_hn 5y ago
> How is it not unfair that, for example I can’t deduct rent from my income?
Tax policy isn't set by moral arguments, it's set by government need for revenue which is then tweaked by political pressure groups.
The reason why you can deduct mortgage interest but not rent has nothing to do with fairness, which is undefined and a massively ambiguous term, but because banks, which are the primary beneficiaries of mortgage subsidies, have a lot more political power in Washington than landlords, who would be the primary beneficiaries of national rent subsidies.
- Ericson2314 5y agoGovernments like the US today can borrow money or print it with very few constraints. Taxes are not primarily about raising revenue. For small, opening (usually developing) economies the matter is different, and they should have more capital controls accordingly.
- alister 5y ago> Taxes are not primarily about raising revenue That’s an intriguing comment. Can you explain further?
- Infinitesimus 5y agoI suspect the parent is coming at this from the MMT angle: https://en.m.wikipedia.org/wiki/Modern_Monetary_Theory https://en.m.wikipedia.org/wiki/Modern_Monetary_Theory For states like the USA that print their own currency and enjoy tremendous global demand for their currency, taxes are less about revenue and more about controlling behavior and unemployment outcomes. Some argue that taxes are just a way to force demand for a currency the government has a monopoly on to ensure it always has _some_ value. (Note: this is a rather polarizing theory and still somewhat young. The US Fed pulled off printing trillions last year and things haven't gone to hell yet do there's something there )