patrick.net

WorkInProgress says

anon_945c8 says

Satoshi_Nakamoto says

WorkInProgress says

Why is it so important for money to trickle down from the rich instead of just letting the poor keep it in the first place?

Define poor. And what does "letting them keep it" mean for somebody who's not paying any FIT in a context for FIT reform?

That's exactly it, almost half of the population pay ZERO in Federal taxes, are these the poor he speaks about? What should congress do, lower their taxes even more? Is there such thing as a negative tax rate on the IRS charts?

Good point. But, I would counter with...If you need more taxes, where are you going to get it from, the people who have money or those who don't?

So we're clear on the "letting them keep it" part?

anon_89d64 says

WorkInProgress says

That's exactly it, almost half of the population pay ZERO in Federal taxes, are these the poor he speaks about? What should congress do, lower their taxes even more? Is there such thing as a negative tax rate on the IRS charts?

Good point. But, I would counter with...If you need more taxes, where are you going to get it from, the people who have money or those who don't?

How about REDUCING spending to the amount of taxes collected? How's that for a novel idea?

Do you keep writing checks out of your checkbook when the available balance gets to zero? Do you keep ordering products and services knowing you don't have the income to support it?

Are these tough questions?

I certainly can agree with you..BUT, tell me when that is going to happen. Bwahahabababa

anon_89d64 says

anon_fb813 says

The point that is missed, is that homeowners pay way more tax than non-owners. They are literally floating the cost of shared services already, so when asked to "help the poor" even further it really is fucking annoying to listen to.

Geez.... scary...

bob2356 says

You believe that somehow rental properties don't pay property taxes? Where do you live that they don't.

and these renters vote.... we're screwed...

I think there is some truth to that. How, exactly, do you think "disaffected" people are going to vote? What America should REALLY want is widespread prosperity. Human nature is what it is. Are you going to change human nature? Let me ask you this...Is greed less evil than envy? I would say both are bad and are related.

anon_89d64 says

That wasn't the topic of the OP, stop with the straw man, the OP was about FEDERAL taxes. But since you brought it up, how much medicare/S.S taxes does someone making $20K a year pay versus someone making $100K?

The man making 1 million or 10 million pays exactly the same social security as the one making $127k.

anon_89d64 says

How about REDUCING spending to the amount of taxes collected? How's that for a novel idea?

Shall we start with department of defence since it is the biggest spender of tax money? Followed by department of agriculture, as in corporate agriculture welfare.

Reagan's Trickle-Down brought Personal Computers to every American household; Trickle-Downs of the 1990's and 2000's brought Internet and Cellphone to every American household. All three were banned or un-affordable in Cuba and North Korea.

Having a few dozen to a few hundred to a few thousands to a few million 1%er rich competing against each other is far better for the middle class and even the poor, than having "equality" under the Castro Family or Kim Family, or whatever socialist dictatorship and its attendant corps of bureaucrats that might control the resources and capital in the name of "the people" (but of course for the bureaucrats' own benefit).

What's impoverishing the American middle class and the poor has little to do with the typical rich that people can see in their own lives but mainly due to terrible government policies. For example, what makes rent so high in the few big coastal cities is not due to greedy landlords (who have to compete against other landlords) but due to the combination of government restrictions on building houses where a lot of people want to live and government housing subsidies taking existing units off the market.

Those on the left with only academic experience but little market experience seem to think someone 1000x richer means he eats 3000 hamburgers a day instead of your own 3 hamburgers a day (and all those hamburgs fall from the sky, so if he eats more, you eat less). On the contrary, the 1000x richer guy in the beef economy is the one owning the cattle ranch and producing the hamburgers more efficiently than alternative owners! and the current low interest rate making the current discount cash value of daily hamburger production especially high on paper. What jacks up your hamburger price is the government subsidy enabling someone just a little less rich than you to bid that hamburger out of your hand! If we take those hamburger ranches into government bureaucratic operation, like Zimbabwe did under Mugabe, the result would not be more hamburgers for you but far less hamburgers! perhaps even mass starvation, just like in Zimbabwe, North Korea, and historically every place that ever tried the brain dead ideas of over-educated socialists with little understanding of how market and economy work.

Those hamburgers do not fall from the sky. Someone has to be producing those hamburgs. Major increases in production need entrepreneurial risk-taking. Bureaucrats collecting fixed salaries and afraid of change can not deliver that, and will always fall behind people's ever rising expectations, especially aided by the ever-increasing laziness of fellow bureaucratic job holders. Only the incentive of getting rich, very rich!, can incentivize people to work 80+ hours a week in a smart way to deliver innovations like personal computers and smart phones and billions of internet sites that you can use today. Them getting rich is simply the market's way of giving working capital into the hands of those with a good track record of getting results. No, they do not eat 1000 times more hamburgers than you do; they are the ones raising cattles to make hamburgers and steaks, so perhaps someday the steak price can drop so much that you too can afford to eat steak!

Leaving money in the hands of those who know how to make money by catering to consumer demand is far better for consumers than taking that money away from the entrepreneurs and giving it to bureaucrats or even to consumers who would then jack up price for other consumers.

On vacation right now but checking to see how’s America latest scam is going. The last one was obummer and “change.”

What lure is the GOP and puss grabber are switching to now to bait voters.

I have been thinking of cancelling my return flight and never come back.

Reality says

Those on the left with only academic experience but little market experience seem to think someone 1000x richer means he eats 3000 hamburgs a day instead of your own 3 hamburgs a day (and all those hamburgs fall from the sky, so if he eats more, you eat less)

Just curious-the rich are eating German cities?

bob2356 says

hose on the left with only academic experience but little market experience seem to think someone 1000x richer means he eats 3000 hamburgs a day instead of your own 3 hamburgs a day (and all those hamburgs fall from the sky, so if he eats more, you eat less).

Joking aside, what the smart academics realize is that someone 1000x richer eats 3 hamburgers a day and hoards the rest of the cash, whereas if that 1000X wealth were spread over the entire population, there would actually be 3000 hamburgers or more eaten leading to more demand for beef and more jobs in the restaurant, more jobs on the farm, more jobs at the beef processers, etc. That's why high inequality is bad and leads to job losses and a crappy economy.

WorkInProgress says

anon_fb813 says

Reminder: home ownership is one of the largest drivers of the US economy. Furniture, construction, repairs, maintenance, hardware, tools, landscaping, service workers, technology, entertainment, automobiles, toys for the young and old alike, and so on.

I agree. Now how do we get more people with lower incomes into houses? Wouldn't that be better then giving it back to those who already own homes?

They already have shelter, what's the problem?

FortWayne says

Quigley says

Mortgage interest write-offs up to $750,000 mortgages

I feel this one needs to be scaled down a lot. That's like paying wealthy people to buy expensive houses, not right.

Absolutely! Very disappointing that such a high limit is getting included in that bill.

Patrick says

FortWayne says

Quigley says

Mortgage interest write-offs up to $750,000 mortgages

I feel this one needs to be scaled down a lot. That's like paying wealthy people to buy expensive houses, not right.

Absolutely! Very disappointing that such a high limit is getting included in that bill.

Meh. Really wealthy people buy cash and they got much bigger goodies in this tax bill.

Those who care about the mortgage deduction (courtiers to the rich at best) got shafted with the elimination of the personal exemptions and the limit to SALT.

Overall, I am happy about this tax bill.

After the neoliberals discredited themselves, now the right-wing populism will get exposed... hopefully; one should never underestimate the human stupidity. There is some small chance for the political pendulum to swing meaningfully to the left.

anon_3b28c says

Joking aside, what the smart academics realize is that someone 1000x richer eats 3 hamburgers a day and hoards the rest of the cash, whereas if that 1000X wealth were spread over the entire population, there would actually be 3000 hamburgers or more eaten leading to more demand for beef and more jobs in the restaurant, more jobs on the farm, more jobs at the beef processers, etc. That's why high inequality is bad and leads to job losses and a crappy economy.

I'm afraid the academics doing those Keynesian aggregates are being dumb or deliberately dumb:

1. Those 1000x richer eating 3 steaks a day, by paying the farmers more for those steak cuts, are allowing the farmers to sell the hamburger meat for less per pound! They are not in the market competing for the hamburger eater's lower quality cuts of meat, but in effect helping to lower the price of those lower quality cuts by giving farmers more money for the higher quality cuts, so the farmers' break-even point for the entire cattle can involve a lower price point for the hamburger meat. Restaurants would cease to exist if there is no wealth inequality; in fact, high taxation and/or raising minimum wage too high would literally cause restaurants to shutter their doors, as we have seen in Seattle in the last year or two. Wealth inequality (and low taxation/regulation) is the reason why some people can afford to go to restaurant and some others are willing to make food for them.

2. If the government steps in, and take the 1000x richer's money and give it to 1000 bean eaters who previously couldn't afford hamburgers, the immediate effect is not more hamburgers, but hamburger prices shooting through the roof! That's precisely what has happened in housing, medicine and education, where government subsidies are the heaviest and running up against government imposed limitation on supply: zoning rules and licensing. The result is not easy access or affordability but impoverishing the middle class who previous could afford those services and goods on their own. What the dumb academics call "hoarding" is in effect keeping the cattle alive and keeping the ranch in operation so that there can be hamburgers and steaks tomorrow.

3. All those bureaucrats doing the taxation and redistribution do not work for free. They need to eat too, and they usually demand higher benefits than the alleged recipients of those government benefits. It has been proven over and over again that government can not grow the economy faster than entrepreneurs can. Not just in Soviet Russia/Ukraine or Zimbabwe or East Germany, but also in this very country: when the entrepreneurs handle technology we have ever broader access to computer/internet/cellphone technology; when the government gets involved heavily in technology as in medicine we have sky-rocketing cost and utter impoverishment of the middle class if they ever need medical care. If the government had been in charge to make computer and internet accessible to everyone in 1990, you'd be bankrupt just for just watching a video online.

As for the relationship between high inequality vs. economic growth, it depends on how you measure equality in society/countries/economies like those of Cuba and North Korea: the average worker makes less than $20/mo while the leaders own private yachts/mansions/beaches/islands and free access to hordes of women. If you want to quote clueless numbers like Gini Index that ignore such lack of transparency, then low nominal inequality absolutely correlates with shitty economy, like Cuba and North Korea. If we confine our discussion to relatively transparent economies like the US over time, then rising inequality absolutely leads to economic growth and falling inequality leads to economic stagnation: simply because the stock market precedes the economy by about 6-18 months! The wealthy has more exposure to the stock market.

FP says

There is some small chance for the political pendulum to swing meaningfully to the left.

Wasn’t it the Clinton Presidency that gave us the quote: “It’s the economy, stupid!”?

If we get four years of escalating economic gains under Trump, he will be IMPOSSIBLE to replace in 2020. People will be like, “its working well so far, and the next guy could screw it up! My portfolio needs more Trump!”

@reality that was a very interesting post full of ideas I hadn’t considered! Thanks for posting!

Quigley says

four years of escalating economic gains

In a late stage business cycle? Dream on. At best a blow off top stock market.

FP says

In a late stage business cycle? Dram on. At best a blow off top stock market.

I guess I’m not educated enough about economics to understand your point. However, economists have been absolutely horrible at predicting the economy for the past forever, so I’m not going to second guess myself based on some academic exercise.

What I’ve seen from years of paying attention to markets is that people’s TRUE opinions on the market are what drives it up or down. When people (who are investors) genuinely believe there’s money to be made by participating in the economy, they invest and the economy improves. When they don’t, the opposite happens.

Right now everyone seems to believe the economy is improving and will continue to do so under our GEOTUS.
So the economy will continue to improve.
QED

Bob, renters never pay property taxes. Those are the taxes that pay for county services, like schools and roads.

This has been beaten to death in another thread. Landlord pays the prop taxes. Never the renter. Renter pays to use the space to live. Landlord's balance sheet is irrelevant.

anon_a8630 says

Bob, renters never pay property taxes. Those are the taxes that pay for county services, like schools and roads.

This has been beaten to death in another thread. Landlord pays the prop taxes. Never the renter. Renter pays to use the space to live. Landlord's balance sheet is irrelevant.

I know what property taxes are used for thank you very much. I write checks for plenty of them and have done so for a very long time. Unless the landlord is very, very stupid the renters pay everything. Mortgage, property taxes, insurance, maintenance, plus a reasonable rate of return. I would strongly suggest you stay out of rental real estate if you believe otherwise.

anon_a8630 says

Landlord pays the prop taxes. Never the renter. Renter pays to use the space to live.

Wow, just wow.

What do you thing the landlord spends that money on that he collects from the renter? Hookers?

bob2356 says

I would strongly suggest you stay out of rental real estate if you believe otherwise.

Great suggestion.

Quigley says

FP says

In a late stage business cycle? Dram on. At best a blow off top stock market.

I guess I’m not educated enough about economics to understand your point.

We've been in the late stage business cycle for an additional 3 years or so compared to normal cycles. Normally the bottom comes out every 6 - 8 years. The last bottom was 2008. One of my financial guys can't explain it either, so he says "just ride the wave".

Let me ask you real estate experts another question - say a landlord has many properties which are rented out, plus some other investment income. What happens if the landlord chooses to pay the property tax rolls using the income from the investments? Did the renters pay for property taxes in this case?

What if a landlord tries to set his rental price based upon the fact that his mortgage and interest payments are very high. What will happen to this landlord if comparable properties are only fetching much less in rent?

anon_670d2 says

Let me ask you real estate experts another question - say a landlord has many properties which are rented out, plus some other investment income. What happens if the landlord chooses to pay the property tax rolls using the income from the investments? Did the renters pay for property taxes in this case?

Yes the renters still pay for property taxes. How exactly it's paid is just a technicality.

anon_670d2 says

What if a landlord tries to set his rental price based upon the fact that his mortgage and interest payments are very high. What will happen to this landlord if comparable properties are only fetching much less in rent?

The property will remain vacant until he adjusts the rent to market.

Wrong - the renters IN ALL CASES only pay for use of the dwelling.

When you buy a car - you only pay for the car, not the auto company's expenses for making the car. How an auto company funds their expenses is irrelevant to the car buyer. The car buyer simply now has a car to use.

Your guy's logic is crazy: by your own definition, because car consumers and renters all pay taxes, then neither landlords nor auto companies should be subject to any tax whatsoever. Obviously, the government is not this retarded.

The government is not just retarded (IQ < 80); the IQ of government is Zero! Only individual human beings can think. "Government" is a made-up concept. There are individuals wearing costumes and claim to work on behalf of government, just like there are individuals wearing costumes and claim to speak on behalf of God. Most sheeple worship at the altar of one or the other. Just like the primary beneficial function of a government is keeping away other more despotic governments, the primary beneficial function of most religion is reducing the sheeple's worshiping of the government-god as default.

Tax on businesses may be able to rob business owners in the short run, but in the long run the cost gets passed onto the consumers . . . just like literal robbing of a corner store may in the short-run hit the bottom-line / cash register of the owner/operator, but in the long run that cost works into every item sold in the store. Fundamentally, it's the natural human beings that have to live. The businesses don't have to continue or stay in the hostile environment; they can pack up or close down if continuing business is not profitable.

Think about it, if a store gets robbed once every 3 months just like quarterly property tax collection, be it a robber wearing ski mask or a mafia owning the turf/neighborhood or a guy claiming to be the town tax-collector . . . if the robbing is that regular, you don't think the cost of the regular robbery gets worked into the price of goods sold at the store? especially if every competitor is robbed the same way every quarter hence having the same level of cost for doing business?

anon_0c821 says

Wrong - the renters IN ALL CASES only pay for use of the dwelling.

So what does the landlord do with the dollars he collects as the rent payment?

anon_ad0c3 says

anon_0c821 says

Wrong - the renters IN ALL CASES only pay for use of the dwelling.

So what does the landlord do with the dollars he collects as the rent payment?

You guys are just arguing semantics here.

Strategist says

Yes the renters still pay for property taxes. How exactly it's paid is just a technicality.

Right! It's technically correct to say that landlords pay the property tax, but they pay it with money they get from the tenants, so the tenants are in effect paying the property tax if not personally paying it to the government.

I will wait for when we discuss this again in a few months to comment. I know many renters are still not satisfied with the consensus.

anon_670d2 says

Let me ask you real estate experts another question - say a landlord has many properties which are rented out, plus some other investment income. What happens if the landlord chooses to pay the property tax rolls using the income from the investments? Did the renters pay for property taxes in this case?

Let's ask another nonsense question while we are at it - Is the moon actually made of green cheese? It is a nonsense question. If the properties are in an LLC then it's all separate and accounted for in the LLC. If you are not in an LLC all the money is just income and expenses no matter what the source or destination. It all goes into and out of a bank account.

anon_670d2 says

What if a landlord tries to set his rental price based upon the fact that his mortgage and interest payments are very high. What will happen to this landlord if comparable properties are only fetching much less in rent?

What if the moon were actually made of green cheese?

The tenant is paying the taxes no matter what silly semantic games you want to play.

Patrick says

Right! It's technically correct to say that landlords pay the property tax, but they pay it with money they get from the tenants, so the tenants are in effect paying the property tax if not personally paying it to the government.

It is semantics, but it is an important distinction and a fundamental law of economics--price is set by supply and demand and is independent of the cost of the good or service except in the very long run (which we never reach).

anonymous says

Tax overhaul deal sweetens for working class

Here's how to sweeten the deal. Every person saves $1 before anyone saves $2. Every person saves $100 before anyone saves $101. Simply lower everybody's taxes the exact same amount until their taxes reach zero. Now that would be tax reform.

Better yet, keep taxes where they are and give everyone an equal tax-free income based on what's available from spending cuts.

anon_1d1b8 says

Here's how to sweeten the deal. Every person saves $1 before anyone saves $2. Every person saves $100 before anyone saves $101. Simply lower everybody's taxes the exact same amount until their taxes reach zero. Now that would be tax reform.

I’m guessing you flunked math.

Higher earners would pay hardly anything under your system, even if everyone else’s taxes under $200k are reduced to zero.

Quigley says

I’m guessing you flunked math.

Higher earners would pay hardly anything under your system, even if everyone else’s taxes under $200k are reduced to zero.

Nope--everyone starts at today's level of taxes and any reductions are made equally in dollar terms. It would be much better than the current tax plan.

anon_8f378 says

Patrick says

Right! It's technically correct to say that landlords pay the property tax, but they pay it with money they get from the tenants, so the tenants are in effect paying the property tax if not personally paying it to the government.

It is semantics, but it is an important distinction and a fundamental law of economics--price is set by supply and demand and is independent of the cost of the good or service except in the very long run (which we never reach).

Supply and demand? WTF does that have to do with tenets paying rent which is used for paying taxes.

bob2356 says

Supply and demand? WTF does that have to do with tenets paying rent which is used for paying taxes.

The point is that rent is independent of the landlord's cost. Like I said--semantics.

anon_8f378 says

Nope--everyone starts at today's level of taxes and any reductions are made equally in dollar terms. It would be much better than the current tax plan.

Here's who benefits in the new plan:


https://www.marketwatch.com/story/here-are-the-winners-and-losers-of-the-final-version-of-the-republican-tax-bill-2017-12-18

In practice tenants pay for all expenses and more. Landlord don’t get into this business to lose money. They can sell the property at anytime, unlike most tenants who are stuck renting due to credit, qualification, etc.