RE: Personal Income Tax Increases

RE: Personal Income Tax Increases (Full Version)

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willbeurdaddy -> RE: Personal Income Tax Increases (11/12/2011 10:36:04 AM)
FR Its interesting how many object to rolling back the Bush "tax cuts for the rich" because rolling them back will disproportionatley hurt the poor and middle class. Morons.

tj444 -> RE: Personal Income Tax Increases (11/12/2011 12:05:12 PM)
No, imo, it helped to OVER-stimulate the housing industry. That is the problem with it, it encouraged people to buy bigger than they could really afford or buy when they really shouldnt have,.. (btw, Canada does not give this type of tax deduction and the housing industry does just fine. So.. if it works there..).. ..that and its not equally fair to everyone. Imo, to complain about the tax shelters that benefit certain people (the rich), this mortgage interest rate deduction is the same thing, it benefits certain people.. do people not see the hypocrisy here? That was really my point.. quote: ORIGINAL: OrionTheWolf This is a deduction that helped stimulate the housing industry. It was the lack of regulation over these loans, and the accountability of the financial institutions. I believe there should be a cap on it, based upon the value of the home though. quote: ORIGINAL: tj444 quote: ORIGINAL: OrionTheWolf Just remove the loop holes and tax shelters for things that do not directly stimulate our nation's economy. It has been done before. you mean like the mortgage interest tax deduction for personal residences? Imo, that was one of the contributing factors to the whole housing debacle.. And its unfair to renters (which tend to be lower income) and those who pay cash/have clear title.

tj444 -> RE: Personal Income Tax Increases (11/12/2011 12:13:37 PM)
quote: ORIGINAL: BanthaSamantha quote: ORIGINAL: tj444 you mean like the mortgage interest tax deduction for personal residences? Imo, that was one of the contributing factors to the whole housing debacle.. And its unfair to renters (which tend to be lower income) and those who pay cash/have clear title. Tax law is a complicated subject. It is unlikely that the mortgage interest tax deduction was a major influence on the housing crisis. Remember that the MITD is a below-the-line deduction, meaning one will only qualify it once their itemized deductions begin to outweigh their standard deduction. Likewise, in order for it to have a truly influencing effect, the deduction must substantially surpass the standard deduction. As a person makes more money, they're likely to have more itemized deductions. But, as a person makes more money, there are less likely to default on a mortgage. Their mortgage might be underwater, but they have the resources to continue paying it down. Such means that this deduction is only really encouraging a narrow band of people to buy a home when they ordinarily wouldn't: people whom make enough money to get a substantial deduction but don't make enough to protect themselves from default. yes tax law is complicated.. but many realtors use the deduction as an additional reason to buy and because it is complicated, the average person might not sit down and work out how it actually would affect their taxes.. They just tend to make certain assumptions and away they go.. I know there has been talk about strategic defaults, how many are actually doing that i dont know.. but those that are have the money/resources to continue paying their mortgage, they however chose not to..

BanthaSamantha -> RE: Personal Income Tax Increases (11/12/2011 1:15:44 PM)
quote: ORIGINAL: tj444 yes tax law is complicated.. but many realtors use the deduction as an additional reason to buy and because it is complicated, the average person might not sit down and work out how it actually would affect their taxes.. They just tend to make certain assumptions and away they go.. I know there has been talk about strategic defaults, how many are actually doing that i dont know.. but those that are have the money/resources to continue paying their mortgage, they however chose not to.. These are fair suppositions, but they don't actually support the conclusion that the MID materially affects home ownership rates. They only support the notion that it is reasonable to believe it could encourage home ownership. While it makes sense that the MIT might provide a justification for increased homeownership, actual data and studies have reached the opposite conclusion: the mortgate interest deduction simply isn't all that effective at ecouraging people to buy houses. The ancient Greeks believed that the heaver an object is, the faster it falls. Such a notion certainly sounded correct; it made sense to them. On the other hand, if the Greeks bothered to perform experiments and conduct a study, they'd find out that their reasonable conclusion simply didn't bear out in the data.

willbeurdaddy -> RE: Personal Income Tax Increases (11/12/2011 2:12:46 PM)
quote: ORIGINAL: tj444 No, imo, it helped to OVER-stimulate the housing industry. That is the problem with it, it encouraged people to buy bigger than they could really afford or buy when they really shouldnt have,.. (btw, Canada does not give this type of tax deduction and the housing industry does just fine. So.. if it works there..).. ..that and its not equally fair to everyone. Imo, to complain about the tax shelters that benefit certain people (the rich), this mortgage interest rate deduction is the same thing, it benefits certain people.. do people not see the hypocrisy here? That was really my point.. quote: ORIGINAL: OrionTheWolf This is a deduction that helped stimulate the housing industry. It was the lack of regulation over these loans, and the accountability of the financial institutions. I believe there should be a cap on it, based upon the value of the home though. quote: ORIGINAL: tj444 quote: ORIGINAL: OrionTheWolf Just remove the loop holes and tax shelters for things that do not directly stimulate our nation's economy. It has been done before. you mean like the mortgage interest tax deduction for personal residences? Imo, that was one of the contributing factors to the whole housing debacle.. And its unfair to renters (which tend to be lower income) and those who pay cash/have clear title. Its not unfair to renters. The mortgage tax deduction levels the playing field between renting and owning. Landlords get a tax deduction for interest on property they buy to rent out and pass that on to renters through their lower carrying costs. Homeowners spend more on their property than landlords and renters do combined so it also stimulates the economy.

BanthaSamantha -> RE: Personal Income Tax Increases (11/12/2011 2:50:09 PM)
quote: ORIGINAL: willbeurdaddy Homeowners spend more on their property than landlords and renters do combined so it also stimulates the economy. I am not sure that this statement is actually true. Can you back this up?

tj444 -> RE: Personal Income Tax Increases (11/12/2011 3:12:55 PM)
quote: ORIGINAL: willbeurdaddy Its not unfair to renters. The mortgage tax deduction levels the playing field between renting and owning. Landlords get a tax deduction for interest on property they buy to rent out and pass that on to renters through their lower carrying costs. Homeowners spend more on their property than landlords and renters do combined so it also stimulates the economy. There are times in the economic cycle where it is true that rents are lower than owning but not in down times, imo.. like now and the last several years. For example, there is an investor in SoCal that bought one property in Moreno Valley, fixed it up and tried to sell it. He got 12 offers on the property but the appraisal was ridiculously low.. so he couldnt sell it and instead rented it out.. He rented it out in 2 days for $1,100 and that was double what a buyers mortgage payment would have been.. btw, he fixed up the house extremely nicely (I saw photos), he is not a slumlord.. He is not just a casual investor, he did that to all his properties.. I know another major investor in SoCal too that does the same to all his houses.. he wanted to date me so i did see a couple of his houses as he was fixing them up at the time.. had those houses been owned by occupant owners, I doubt they would have done anything more than the landlords did..

tj444 -> RE: Personal Income Tax Increases (11/12/2011 3:21:26 PM)
quote: ORIGINAL: BanthaSamantha These are fair suppositions, but they don't actually support the conclusion that the MID materially affects home ownership rates. They only support the notion that it is reasonable to believe it could encourage home ownership. While it makes sense that the MIT might provide a justification for increased homeownership, actual data and studies have reached the opposite conclusion: the mortgate interest deduction simply isn't all that effective at ecouraging people to buy houses. The ancient Greeks believed that the heaver an object is, the faster it falls. Such a notion certainly sounded correct; it made sense to them. On the other hand, if the Greeks bothered to perform experiments and conduct a study, they'd find out that their reasonable conclusion simply didn't bear out in the data. As i said in another post above, it encouraged people to buy bigger than they could really afford or buy when they really shouldnt have,.. I also believe that it discourages owners from paying their mortgages off faster and encouraged the whole ATM thing, and constantly trading up to more and more debt,.. a house wasnt someplace to live in any longer, it was a cash cow... So in those ways imo it contributed to the housing debacle, not necessarily increasing ownership rates, but in part, encouraging way too much debt..

Real0ne -> RE: Personal Income Tax Increases (11/12/2011 3:27:52 PM)
quote: ORIGINAL: willbeurdaddy Its not unfair to renters. The mortgage tax deduction levels the playing field between renting and owning. Landlords get a tax deduction for interest on property they buy to rent out and pass that on to renters through their lower carrying costs. Homeowners spend more on their property than landlords and renters do combined so it also stimulates the economy. whos economy? not mine! at least we still have some change!

BanthaSamantha -> RE: Personal Income Tax Increases (11/12/2011 3:48:30 PM)
quote: ORIGINAL: tj444 As i said in another post above, it encouraged people to buy bigger than they could really afford or buy when they really shouldnt have,.. I also believe that it discourages owners from paying their mortgages off faster and encouraged the whole ATM thing, and constantly trading up to more and more debt,.. a house wasnt someplace to live in any longer, it was a cash cow... So in those ways imo it contributed to the housing debacle, not necessarily increasing ownership rates, but in part, encouraging way too much debt.. As I said before: while those are perfectly reasonable suppositions, they are not borne out by facts. Certainly there are instances where those examples are true, but the overall trend is different. On a macro level, the MID simply doesn't have that much of an impact. To clarify your issue with the distinction between encouraging homeownership and encouraging debt, the data and studies have concluded that the mortgage interest deduction simply doesn't have that much effect on the behavior of people in the housing market. Whether or not this deduction existed, the housing market would still have went sour.

tj444 -> RE: Personal Income Tax Increases (11/12/2011 4:02:44 PM)
quote: ORIGINAL: BanthaSamantha As I said before: while those are perfectly reasonable suppositions, they are not borne out by facts. Certainly there are instances where those examples are true, but the overall trend is different. On a macro level, the MID simply doesn't have that much of an impact. To clarify your issue with the distinction between encouraging homeownership and encouraging debt, the data and studies have concluded that the mortgage interest deduction simply doesn't have that much effect on the behavior of people in the housing market. Whether or not this deduction existed, the housing market would still have went sour. I never said that the housing market wouldnt have gone sour, there are a variety of reasons why it did. I personally feel that the MID was a contributing factor out of many.. Suggest to people that they double their mortgage payments to pay it off faster and they will look at you like you are crazy! eta- "Celia Chen, a senior director and housing economist at Moody's Analytics. "It hasn't helped to expand homeownership, but it's helped to support purchases of larger homes." "He argued that with a reduction at the top level, prices on more expensive homes would fall, but so too would prices on less expensive homes as certain buyers realized they could not afford as much house without the deduction." ""The price of the deduction is built into the home" http://seattletimes.nwsource.com/html/realestate/2016729966_realdeduction13.html

BanthaSamantha -> RE: Personal Income Tax Increases (11/12/2011 4:26:15 PM)
quote: ORIGINAL: tj444 Suggest to people that they double their mortgage payments to pay it off faster and they will look at you like you are crazy! Ha yeah, that is the general reaction whenever you ask someone to solve a math problem. That said, doing that does save many times more money than the MID would. You don't even need to double the payment, all you really need to do is double the principal portion of the payment. When you factor in interest, insurance, and taxes, the principal portion of a payment is often pretty small.

tj444 -> RE: Personal Income Tax Increases (11/12/2011 5:04:46 PM)
quote: ORIGINAL: BanthaSamantha quote: ORIGINAL: tj444 Suggest to people that they double their mortgage payments to pay it off faster and they will look at you like you are crazy! Ha yeah, that is the general reaction whenever you ask someone to solve a math problem. That said, doing that does save many times more money than the MID would. You don't even need to double the payment, all you really need to do is double the principal portion of the payment. When you factor in interest, insurance, and taxes, the principal portion of a payment is often pretty small. btw, I edited and added a link in my previous post.. When i was younger, a co-worker and i were discussing homeownership and he was doubling his payment (the second payment went entirely to pay down the principle) and he expected to have it paid off in 7 years.. Now that is what i mean by paying your mortgage off faster! Its less now with interest rates being low but i recall it used to cost a person about 2-1/2 times the cost of the house at the end of a 25 year mortgage.. I mean, seriously.. isnt that worth paying off asap! The upside is you cheat those horrible bankers out of all that money.. [;)]

Politesub53 -> RE: Personal Income Tax Increases (11/12/2011 5:09:16 PM)
quote: ORIGINAL: BanthaSamantha quote: ORIGINAL: willbeurdaddy Can you back this up? You must be new here. [;)]

willbeurdaddy -> RE: Personal Income Tax Increases (11/12/2011 6:02:47 PM)
quote: ORIGINAL: BanthaSamantha quote: ORIGINAL: willbeurdaddy Homeowners spend more on their property than landlords and renters do combined so it also stimulates the economy. I am not sure that this statement is actually true. Can you back this up? There are several reasons for it: living space per individual is larger in owner occupied dwellings, requiring more maintenance and more furnishings there is more outside property to maintain per individual, with no common areas for single family homes there is less sharing of durable goods such as washers, dryers, lawnmowers, snowblowers etc homes are in less densely populated areas with less access to viable public transportation than rentals, requiring increased spending on transportation the ability to tap home equity (with historically more appreciation than most individual's non-real estate investments) enables increased spending Home ownership spending is by far the largest component of GDP.

tazzygirl -> RE: Personal Income Tax Increases (11/12/2011 6:12:15 PM)
Nearly half (47%) of GDP is services, not products. These include everything from financial services to health care.

BanthaSamantha -> RE: Personal Income Tax Increases (11/12/2011 6:12:49 PM)
quote: ORIGINAL: willbeurdaddy There are several reasons for it: living space per individual is larger in owner occupied dwellings, requiring more maintenance and more furnishings there is more outside property to maintain per individual, with no common areas for single family homes there is less sharing of durable goods such as washers, dryers, lawnmowers, snowblowers etc homes are in less densely populated areas with less access to viable public transportation than rentals, requiring increased spending on transportation the ability to tap home equity (with historically more appreciation than most individual's non-real estate investments) enables increased spending Home ownership spending is by far the largest component of GDP. None of this is evidence that your statement is true. It is merely an explanation for why your statement might be plausable. It isn't proper to go from "it sounds plausable" to "it is a cold hard fact."

Politesub53 -> RE: Personal Income Tax Increases (11/13/2011 5:05:34 AM)
quote: the ability to tap home equity (with historically more appreciation than most individual's non-real estate investments) enables increased spending Ever wondered what contributed the 2008 credit crunch Wilbur ?

thompsonx -> RE: Personal Income Tax Increases (11/13/2011 10:44:46 AM)
quote: ORIGINAL: tazzygirl quote: Perhaps if you were to learn how to do arithmetic you would not need a prybar to get your feet out of your mouth 698,105,000,000/336,000,000=1/2077 which is a tiny fraction of 1% And the country is a tiny fraction of the US... the population is a tiny fraction of the US... You were the one who chose estonia for your example. I pointed out that your example did not prove your point but the exact opposite. Your point is pointless on this. That would be your opinon but the numbers you posted say otherwise. United States 312,582,000 population... United States 698,105,000,000 military 2,233.40 per person spent on military Estonia 1,340,194......... Estonia 336,000,000 251.00 per person spent on military Your argument is more in keeping that we spend far too much on military... My argument was that if a country has a 18/19% tax on all income both corporate and private it will not be difficult to ballance the budget if you are not spending 2000+ times as much money on the miltary. Now if estonia does ok on 18/19% with a tiny military budget how can the u.s. get by with 18/19% with the 2000+ times amount we spend on the military?

tazzygirl -> RE: Personal Income Tax Increases (11/13/2011 10:49:27 AM)
My argument was that if a country has a 18/19% tax on all income both corporate and private it will not be difficult to ballance the budget if you are not spending 2000+ times as much money on the miltary. Now if estonia does ok on 18/19% with a tiny military budget how can the u.s. get by with 18/19% with the 2000+ times amount we spend on the military? By cutting the budget... something Congress will never allow. It doesnt matter what country you use in comparison, we spend far too much money on military... The last ten years have not helped one bit.

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