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Post by Deleted on Nov 4, 2017 14:20:12 GMT -5
Okay. The Republican tax overhaul eliminates all kinds of stuff and simply sucks overall, IMO. Plenty to talk about there. But I'm going to kick it off with one particular item that I find appalling in every way: the elimination of the adoption tax credit. www.nationalreview.com/article/453410/adoption-tax-credit-pro-life-policy-republicans-saveWow. Wow. Hypocritical, mean-spirited, heartless, petty, and pointless. Who on earth thinks this is a good idea?! I would think people on both sides of the aisle would want to support and encourage adoption, whether it's because you are pro-life and want to discourage abortions, or because you care about kids, or both. I don't know ANYONE who doesn't believe in supporting adoptions. I've cited the National Review above because clearly the conservatives there agree. Everybody seems to agree, except, apparently, the Republicans in Congress. Why, GOP? Why? Seriously, can anyone here come up with a justification for this? Are they just going all out Cruella DeVille? What's next, a puppy roast on the White House lawn?
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Post by Christine on Nov 4, 2017 19:12:55 GMT -5
I have been advised by fellow professionals--who've been practicing longer than I've been alive--that it's pointless to pontificate on tax reforms that have not been passed by Congress.
It pains me to say this, because I have A LOT of opinions on the proposed changes. But to be true to my profession and to adhere to the advice of my betters, I will refrain from expressing any opinions on the proposed changes to the tax code until and unless Congress passes this utterly deplorable plan.
Damn. I was so close.
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Post by robeiae on Nov 5, 2017 10:13:29 GMT -5
Almost all of the tax credits and deductions should be eliminated, including nonsense like deductions for mortgage interest. Hey, I use that deduction year after year after year, and it's a big one. But it's stupid, imo. Get rid of the credits and deductions, simplify the codes, lower the rates, and the tax revenues will be the same or higher.
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Post by Deleted on Nov 5, 2017 10:29:06 GMT -5
I used to think that. But I don't think it holds up. People with similar incomes simply aren't fungible.
The expenses in some areas are dramatically higher, for example. You can buy my mom's 3 bedroom house for $125K, or thereabouts. I'd have to pay $800k or more for a very modest one-bedroom apartment in Manhattan. So a $100k income that would have me living high on the hog in Buffalo would have me barely making ends meet in NYC. I could live very comfortable where my mother lives on $35k. I'd be pretty much unable to live in the NYC area on that, unless maybe I lived way out in the Bronx with roommates and watched every dime. Kids, student loans, etc. -- all of those things have a huge impact on how far your dollar goes. As things are, medical expenses can bankrupt you if you are unlucky enough to get cancer. Etc.
Eliminate those deductions, and only the wealthy will be able to afford such things. As a society, is that really what we want?
I don't.
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Post by Deleted on Nov 5, 2017 10:35:51 GMT -5
And honestly, with tax software? Doing your taxes isn't all that hard. Unless you're wealthy and have lots of investments and assets, in which case you can afford to pay a professional.
I hate doing my taxes, but if I'm going to pay them, I'd rather do a more complicated form than pretend every human making the same income is in a comparable position.
ETA:
I say all this, by the way, as someone who has no kids and no mortgage, so I don't take these deductions. But I do see why we have them.
And just yanking them, without addressing the issues that they address? I submit it will have ugly consequences for our society.
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Post by mikey on Nov 5, 2017 11:29:09 GMT -5
For me I've never had a set amount of income. My income has always fluctuated from one day, week, month,or year, from one to the other. So to deal with this, I've always set my budget to my lowest income, which means I'm pretty frugal with taking on monthly payments.
So in the end my automatic deductions has always been worth more than trying to itemize. Which means that there's no mortgage, or child care deductions for me
As long as the automatic deductions stays in place, which from what I understand, is the plan, then the the rest of the deductions won't affect me at all. Which means ether way, I'll not be impacted.(I think)
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Post by robeiae on Nov 5, 2017 12:30:39 GMT -5
I used to think that. But I don't think it holds up. People with similar incomes simply aren't fungible. The expenses in some areas are dramatically higher, for example. You can buy my mom's 3 bedroom house for $125K, or thereabouts. I'd have to pay $800k or more for a very modest one-bedroom apartment in Manhattan. So a $100k income that would have me living high on the hog in Buffalo would have me barely making ends meet in NYC. I could live very comfortable where my mother lives on $35k. I'd be pretty much unable to live in the NYC area on that, unless maybe I lived way out in the Bronx with roommates and watched every dime. Kids, student loans, etc. -- all of those things have a huge impact on how far your dollar goes. As things are, medical expenses can bankrupt you if you are unlucky enough to get cancer. Etc. Eliminate those deductions, and only the wealthy will be able to afford such things. As a society, is that really what we want? I don't. Well first, the rates are too high to begin with, imo. And second, tax deductions aren't a function of location, so I don't know why you are focusing on that. But sure, expenses based on circumstances impact one's budget. That's not a new thing, is it? Simple truth: deductions like these and others function as a kind of entitlement, "granted" by politicians. And taking back an entitlement is next to impossible, because there's always a chunk of people who are willing to get outraged, who are willing to make the issue an emotional one, above all else. Why is mortgage interest deductible? What's the theory behind it? I'll tell what the genesis was: it came about when all interest for any loans was made tax deductible. It survived where others didn't because it was falsely--imo--proclaimed to be an incentive for home ownership. But it's really not, imo. I don't think the evidence supports that claim, at all. The people who really benefit from it are people with massive mortgages--i.e. not middle to lower class--and the real estate industry. It's contributed to high price of home, imo. And in that respect, it ultimately hurts the middle to lower income classes because it put them too deep in debt. People--in this country--continue to spend money that they don't have and the tax code, with all of it's deductions and credits, is an enabler in this regard. As a society, don't we actually want both citizens and the government to be financially secure?
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Post by Amadan on Nov 5, 2017 13:05:17 GMT -5
Fair enough, if you want to eliminate all deductions and simplify the tax code. But Congress is basically picking at deductions here and there that affect mostly people who don't matter (to them) and/or are convenient targets.
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Post by Christine on Dec 23, 2017 20:50:06 GMT -5
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Post by Vince524 on Dec 23, 2017 20:57:45 GMT -5
Thank God for that.
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Post by Don on Dec 24, 2017 6:08:55 GMT -5
Tax deductions are grants of political privilege, and like every form of privilege, it gives an advantage to those so blessed. It's funny how people are quick to condemn male privilege, white privilege, rich privilege, education privilege, and every other kind of privilege that advantages one person over another.
OTOH, if the lords and masters are handing it out, they're all standing quietly in the line.
But wait, there's more! You get the added benefit of economic misallocation, too! It's like something Ron Popeil dreamed up.
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Post by Amadan on Dec 24, 2017 21:52:22 GMT -5
Tax deductions are grants of political privilege, and like every form of privilege, it gives an advantage to those so blessed. It's funny how people are quick to condemn male privilege, white privilege, rich privilege, education privilege, and every other kind of privilege that advantages one person over another. OTOH, if the lords and masters are handing it out, they're all standing quietly in the line. But wait, there's more! You get the added benefit of economic misallocation, too! It's like something Ron Popeil dreamed up. If you start from the premise that taxes are a legitimate method of funding the government (and I know you disagree with that premise, and yes, I still owe you a response on your "Anarcho-Libertarian Utopia" thread, but let's look at it from the perspective of those who are not anarcho-libertarians), then assuming you also believe that taxation should be progressive (i.e., that rich people should pay proportionately more than poor people), then deductions are a method of trying to distribute taxation in a more equitable manner. In theory, you tax the well off more for things they don't need than you tax the less well off for things they do need. Obviously, the intent may fail badly in execution, but there is nothing inherently hypocritical in accepting tax deductions. The devil, of course, is in the details.
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Post by Don on Dec 25, 2017 6:58:05 GMT -5
Yeah, I know the rationale. It's still a grant of political privilege.
"the intent may fail badly in execution" reminds me of what paves the road to Hell. Which goes nicely with "the devil is in the details."
Government, as with any other good or service, should be judged on performance, not intentions. So how is the mortgage exemption, which reduces taxes for those wealthy enough to own property, progressive? How does it distribute taxation in a more equitable manner? The same questions should be asked of the adoption tax credit. Let's understand what's going on here, not just believe in the good intentions of the ruling class.
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Post by Amadan on Dec 25, 2017 11:49:53 GMT -5
"the intent may fail badly in execution" reminds me of what paves the road to Hell. Which goes nicely with "the devil is in the details." Government, as with any other good or service, should be judged on performance, not intentions. So how is the mortgage exemption, which reduces taxes for those wealthy enough to own property, progressive? How does it distribute taxation in a more equitable manner? The same questions should be asked of the adoption tax credit. Let's understand what's going on here, not just believe in the good intentions of the ruling class. The fact that the road to hell is paved with good intentions doesn't mean all well-intended efforts that you disagree with lead to hell. You know the rationale for the mortgage tax deduction, too - it makes homes more affordable for the working class. Of course that means people with more expensive homes benefit more, unless you put a cap on the deduction. There are arguments to be made against such deductions, but I still don't see any hypocrisy in supporting it, even if you disagree with its effectiveness.
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Post by Don on Dec 25, 2017 13:05:46 GMT -5
Like I said, I know the rationale. Again, how is that progressive? How does it distribute taxation in a more equitable manner? It apparently does the opposite.
That issue aside, you're accepting as fact that the mortgage deduction makes homes more affordable for the working class. Given that markets aren't stupid, the tax savings is factored into market prices already. It's no secret and it's available to anyone for houses priced far above middle-class dwellings in most places. Real estate markets are local; having a single federal cap is worthless.
Put a realistic cap on it at the market level and it might, possibly, accomplish its intended task. As is, it's an incentive to buy the biggest house possible in the hope you sell at the crest of the next boom-bust driven by ridiculously easy money. It's also an incentive to put all your investment eggs in your real estate basket, instead of diversifying. It's contributed to the growth in the size and feature of new housing (so much for the environmental concerns), which, ironically, has driven up entry-level housing costs. The 1000 sq ft starter home is almost never built these days. Go big or rent is the message.
Put a cap on it equal to the first-year interest for a starter home in the local market and you'll actually see an impact.
The list goes on. The stated benefits are easy to see. The unseen damages are not so easy to ferret out. It's certainly distorted the market toward owning over renting living space, and it's certainly distorted the investment market toward personal real estate, and contributed to the bubble mentality. Banks and real estate and construction companies love it, of course.
I seriously doubt that it's actually made homes more affordable for the middle class, for all the reasons explained above and the other unseens that result from market distortion.
And at the root of all that, another question. Why should those who prefer to rent pay for the privilege of those who prefer to buy, in the form of higher taxes?
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