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Welfare for the Rich

TryingToBeOpenMinded
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12/19/2014 2:21:37 PM
Posted: 1 year ago
Why don't people view the tax deductions for stuff like mortgage interest and property taxes as welfare for the rich?

Government expenditures must be paid by taxes paid by the people. When you grant a tax deduction, you need to make up the shortfall by increasing the tax in another area. So, by granting tax deduction for homeowners, you must increase the taxes for non-homeowners. It's essentially a transfer of wealth from non-homeowners to homeowners. In other words, the poor to the rich. It's a huge ripoff for the non-homeowners.

(Here is an interesting spin. If everyone gets a tax deduction, no one gets a tax deduction. The reason is if you grant a tax deduction for everyone, then you have to increase the tax rate for everyone to make up for the shortfall.)
Greyparrot
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12/20/2014 8:11:22 AM
Posted: 1 year ago
At 12/19/2014 2:21:37 PM, TryingToBeOpenMinded wrote:
Why don't people view the tax deductions for stuff like mortgage interest and property taxes as welfare for the rich?

Government expenditures must be paid by taxes paid by the people. When you grant a tax deduction, you need to make up the shortfall by increasing the tax in another area. So, by granting tax deduction for homeowners, you must increase the taxes for non-homeowners. It's essentially a transfer of wealth from non-homeowners to homeowners. In other words, the poor to the rich. It's a huge ripoff for the non-homeowners.

(Here is an interesting spin. If everyone gets a tax deduction, no one gets a tax deduction. The reason is if you grant a tax deduction for everyone, then you have to increase the tax rate for everyone to make up for the shortfall.)

You can't have crony capitalism without welfare for the rich.
Khaos_Mage
Posts: 23,214
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12/21/2014 3:38:11 PM
Posted: 1 year ago
Why don't people view the standard deduction as welfare for the lower class?
Why don't people view tax-exempt social security income as welfare for the elderly?
Why don't people view child tax credits as welfare for poor families?
My work here is, finally, done.
Khaos_Mage
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12/21/2014 3:43:36 PM
Posted: 1 year ago
At 12/21/2014 3:38:11 PM, Khaos_Mage wrote:
Why don't people view the standard deduction as welfare for the lower class?
Why don't people view tax-exempt social security income as welfare for the elderly?
Why don't people view child tax credits as welfare for poor families?

Oops.
I meant child tax credits as welfare for families.
Earned income tax credits for the poor (and usually families, and unmarried, too)
My work here is, finally, done.
16kadams
Posts: 10,497
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12/21/2014 3:55:57 PM
Posted: 1 year ago
At 12/19/2014 2:21:37 PM, TryingToBeOpenMinded wrote:
Why don't people view the tax deductions for stuff like mortgage interest and property taxes as welfare for the rich?

Government expenditures must be paid by taxes paid by the people. When you grant a tax deduction, you need to make up the shortfall by increasing the tax in another area. So, by granting tax deduction for homeowners, you must increase the taxes for non-homeowners. It's essentially a transfer of wealth from non-homeowners to homeowners. In other words, the poor to the rich. It's a huge ripoff for the non-homeowners.

(Here is an interesting spin. If everyone gets a tax deduction, no one gets a tax deduction. The reason is if you grant a tax deduction for everyone, then you have to increase the tax rate for everyone to make up for the shortfall.)

I don't doubt that the rich get "welfare" (and the reasons for higher class 'welfare' are backwards). However, the top quintile is the only quintile that gives significantly more wealth to the government then they revive. The poorest and second poorest quintiles take significantly more than they give. And the second richest quintile gives an insignificant amount of revenue to the government (http://www.aei.org...).

But this is more of a case against crony capitalism and the state's intervention in the market system, not an argument against the free market or the wealthy.
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https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
TryingToBeOpenMinded
Posts: 201
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12/22/2014 9:52:16 AM
Posted: 1 year ago
At 12/21/2014 3:43:36 PM, Khaos_Mage wrote:
At 12/21/2014 3:38:11 PM, Khaos_Mage wrote:
Why don't people view the standard deduction as welfare for the lower class?
Why don't people view tax-exempt social security income as welfare for the elderly?
Why don't people view child tax credits as welfare for poor families?

Oops.
I meant child tax credits as welfare for families.
Earned income tax credits for the poor (and usually families, and unmarried, too)

Uh... those are already considered welfare for the lower class. The point I'm making is that the tax breaks are not considered welfare for the rich when they are absolutely are.

Health tax deductions, property tax deductions, mortgage interest deductions, etc. It's a lot of money that's given to the rich. But, the poor never complain because they don't realize that tax breaks are the same things as giving actual money. It's just hidden.
TryingToBeOpenMinded
Posts: 201
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12/22/2014 9:57:07 AM
Posted: 1 year ago
At 12/21/2014 3:55:57 PM, 16kadams wrote:
At 12/19/2014 2:21:37 PM, TryingToBeOpenMinded wrote:
Why don't people view the tax deductions for stuff like mortgage interest and property taxes as welfare for the rich?

Government expenditures must be paid by taxes paid by the people. When you grant a tax deduction, you need to make up the shortfall by increasing the tax in another area. So, by granting tax deduction for homeowners, you must increase the taxes for non-homeowners. It's essentially a transfer of wealth from non-homeowners to homeowners. In other words, the poor to the rich. It's a huge ripoff for the non-homeowners.

(Here is an interesting spin. If everyone gets a tax deduction, no one gets a tax deduction. The reason is if you grant a tax deduction for everyone, then you have to increase the tax rate for everyone to make up for the shortfall.)

I don't doubt that the rich get "welfare" (and the reasons for higher class 'welfare' are backwards). However, the top quintile is the only quintile that gives significantly more wealth to the government then they revive. The poorest and second poorest quintiles take significantly more than they give. And the second richest quintile gives an insignificant amount of revenue to the government (http://www.aei.org...).

But this is more of a case against crony capitalism and the state's intervention in the market system, not an argument against the free market or the wealthy.

I'm not making an argument either against crony capitalism nor free market nor the wealthy.

The point I'm trying to make is that a lot of attention is given to how much welfare is given to the poor. But, people don't realize that the amount of tax breaks given to the rich is really staggering. It's not a few thousand here or there but amounts to tens of thousands that are given back to the wealthy. But, no one realizes that this is actually welfare but hidden under the guise of "tax breaks".

Personally, I think that most tax breaks should be eliminated. They don't influence behavior to the extent intended. For example, now that everyone has healthcare, why have tax breaks for it? If everyone gets tax breaks for them, it's really not a tax break. It's like giving you back a dollar via the tax break and then you giving it back through increased taxes. It's ludicrous.
Khaos_Mage
Posts: 23,214
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12/22/2014 10:08:32 AM
Posted: 1 year ago
At 12/22/2014 9:52:16 AM, TryingToBeOpenMinded wrote:
At 12/21/2014 3:43:36 PM, Khaos_Mage wrote:
At 12/21/2014 3:38:11 PM, Khaos_Mage wrote:
Why don't people view the standard deduction as welfare for the lower class?
I'm not sure I hear people calling that welfare.
Why don't people view tax-exempt social security income as welfare for the elderly?
Or this.
Why don't people view child tax credits as welfare for poor families?

Oops.
I meant child tax credits as welfare for families.
Earned income tax credits for the poor (and usually families, and unmarried, too)

Uh... those are already considered welfare for the lower class. The point I'm making is that the tax breaks are not considered welfare for the rich when they are absolutely are.
I don't call reducing the cost (tax liability) of a product welfare. Do you?
If so, then let's just have a flat tax, okay?
Oh, wait, that helps the rich, too?
Pretty much no matter what you do, the rich's taxes are affected.

Health tax deductions,
which the richer you are, the less likely you are to claim them (10% of itemized returns of $100K or more have them, while 14% and climbing as you go DOWN the income ladder)
property tax deductions,
Do you believe the federal government should tax money that is already taxed?
mortgage interest deductions,
This helps the middle class afford homes, and is how it is sold to the public.
etc.

It's a lot of money that's given to the rich.
It's a lot of money that is given to the poor.
But, the poor never complain because they don't realize that tax breaks are the same things as giving actual money. It's just hidden.
The poor have no right to complain about it, when they are literally given free money (tax credits) as opposed to deductions.
My work here is, finally, done.
Khaos_Mage
Posts: 23,214
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12/22/2014 11:17:19 AM
Posted: 1 year ago
And, to say the poor never complain is a bit silly, when so many poor people view tax day as a bonus check and are excited. By this, I mean, when their "return" is for $7,000, they are unaware that that money is not a refund, it is welfare.
My work here is, finally, done.
Greyparrot
Posts: 14,321
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12/22/2014 11:24:47 AM
Posted: 1 year ago
At 12/22/2014 9:57:07 AM, TryingToBeOpenMinded wrote:

I'm not making an argument either against crony capitalism nor free market nor the wealthy.
Why not?
TryingToBeOpenMinded
Posts: 201
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12/22/2014 1:11:36 PM
Posted: 1 year ago
At 12/22/2014 11:17:19 AM, Khaos_Mage wrote:
And, to say the poor never complain is a bit silly, when so many poor people view tax day as a bonus check and are excited. By this, I mean, when their "return" is for $7,000, they are unaware that that money is not a refund, it is welfare.

Are you being serious? I never stated that the poor never complain. I'm stating that the poor haven't complained about tax breaks for the wealthy because they don't realize it's actually a form of welfare. It's disguised as a "tax break".
TryingToBeOpenMinded
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12/22/2014 1:12:44 PM
Posted: 1 year ago
At 12/22/2014 11:24:47 AM, Greyparrot wrote:
At 12/22/2014 9:57:07 AM, TryingToBeOpenMinded wrote:

I'm not making an argument either against crony capitalism nor free market nor the wealthy.
Why not?

Because it's a digression to this thread. I'm against for those things but for the purposes of this discussion, I'm not making an argument for or against.
Khaos_Mage
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12/22/2014 1:16:23 PM
Posted: 1 year ago
At 12/22/2014 1:11:36 PM, TryingToBeOpenMinded wrote:
At 12/22/2014 11:17:19 AM, Khaos_Mage wrote:
And, to say the poor never complain is a bit silly, when so many poor people view tax day as a bonus check and are excited. By this, I mean, when their "return" is for $7,000, they are unaware that that money is not a refund, it is welfare.

Are you being serious? I never stated that the poor never complain.
Yeah, you did:
At 12/22/2014 9:52:16 AM, TryingToBeOpenMinded wrote:
But, the poor never complain because they don't realize that tax breaks are the same things as giving actual money. It's just hidden.

I'm stating that the poor haven't complained about tax breaks for the wealthy because they don't realize it's actually a form of welfare. It's disguised as a "tax break".
Are you going to actually address my points or not?
Why is it welfare?
Why should there be a potential for over 100% taxation?
What do you propose to do, since any deduction/credit is welfare, according to you, and a flat tax benefits the rich as well?
My work here is, finally, done.
TryingToBeOpenMinded
Posts: 201
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12/22/2014 2:25:35 PM
Posted: 1 year ago
At 12/22/2014 1:16:23 PM, Khaos_Mage wrote:
At 12/22/2014 1:11:36 PM, TryingToBeOpenMinded wrote:
At 12/22/2014 11:17:19 AM, Khaos_Mage wrote:
And, to say the poor never complain is a bit silly, when so many poor people view tax day as a bonus check and are excited. By this, I mean, when their "return" is for $7,000, they are unaware that that money is not a refund, it is welfare.

Are you being serious? I never stated that the poor never complain.
Yeah, you did:
At 12/22/2014 9:52:16 AM, TryingToBeOpenMinded wrote:
But, the poor never complain because they don't realize that tax breaks are the same things as giving actual money. It's just hidden.



I'm stating that the poor haven't complained about tax breaks for the wealthy because they don't realize it's actually a form of welfare. It's disguised as a "tax break".
Are you going to actually address my points or not?
Why is it welfare?
Why should there be a potential for over 100% taxation?
What do you propose to do, since any deduction/credit is welfare, according to you, and a flat tax benefits the rich as well?

I said they complain about this specific aspect, I never said they never complain at all. That's ludicrous. You're putting words in my mouth. I'm not sure if you're being intentionally obtuse or it's sincere.

With respect to reforms to the tax code, that's a huge topic and perhaps saved for another thread. For starters, get rid of most tax credits and deductions. These tax breaks are supposed to affect behavior but I don't think it influences behavior. People do not on the most part say that, "Oh there is tax break, i'm going to do this." They would have acted this way with or without the tax break. I also a strong believer of only an earned income tax credit that motivates people to work rather than direct welfare or minimum wage. With ACA, we need to get rid of healthcare deductions for everyone. Like I said, if everyone gets a deduction, then it's the same thing as no one getting it. 1040 needs to be cleaned up so we can do our taxes in under 30 minutes. The list of what needs to be done is long....
Khaos_Mage
Posts: 23,214
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12/22/2014 2:36:12 PM
Posted: 1 year ago
At 12/22/2014 2:25:35 PM, TryingToBeOpenMinded wrote:
At 12/22/2014 1:16:23 PM, Khaos_Mage wrote:
At 12/22/2014 1:11:36 PM, TryingToBeOpenMinded wrote:
At 12/22/2014 11:17:19 AM, Khaos_Mage wrote:
And, to say the poor never complain is a bit silly, when so many poor people view tax day as a bonus check and are excited. By this, I mean, when their "return" is for $7,000, they are unaware that that money is not a refund, it is welfare.

Are you being serious? I never stated that the poor never complain.
Yeah, you did:
At 12/22/2014 9:52:16 AM, TryingToBeOpenMinded wrote:
But, the poor never complain because they don't realize that tax breaks are the same things as giving actual money. It's just hidden.



I'm stating that the poor haven't complained about tax breaks for the wealthy because they don't realize it's actually a form of welfare. It's disguised as a "tax break".
Are you going to actually address my points or not?
Why is it welfare?
Why should there be a potential for over 100% taxation?
What do you propose to do, since any deduction/credit is welfare, according to you, and a flat tax benefits the rich as well?

I said they complain about this specific aspect, I never said they never complain at all. That's ludicrous. You're putting words in my mouth. I'm not sure if you're being intentionally obtuse or it's sincere.

With respect to reforms to the tax code, that's a huge topic and perhaps saved for another thread. For starters, get rid of most tax credits and deductions. These tax breaks are supposed to affect behavior but I don't think it influences behavior. People do not on the most part say that, "Oh there is tax break, i'm going to do this." They would have acted this way with or without the tax break.
Well, you are right that it is unlikely to affect behavior on its own, when you figure 47% of people pay no federal income taxes. And, yes, I've managed to calculate close to this figure before.

I also a strong believer of only an earned income tax credit that motivates people to work rather than direct welfare or minimum wage.
Well, the earned income tax credit is only on earned income.
Would you support welfare being treated as taxable income? Because it's not.

With ACA, we need to get rid of healthcare deductions for everyone. Like I said, if everyone gets a deduction, then it's the same thing as no one getting it.
A point you did not address, health deductions are actually used by the poor more than the rich. (well, at least when compared to those who itemize).
Further, you are aware that the ACA's "subsidies" are actually tax credits, right?
So, this is kind of hypocritical.

1040 needs to be cleaned up so we can do our taxes in under 30 minutes. The list of what needs to be done is long....
I'd say a good chunk of Americans can do their taxes in under 30 minutes, use 1040A or 1040EZ, and I just looked something up that said 46% of returns are these.
Further, doing them on paper is super fast, if you know what you are doing.

You haven't answered this question, either:
Should the federal government tax me on money that is already taxed?

You can't get all uppity that I am putting words in your mouth when you can't answer simple questions directed at you.

Here is another question:
Should charitible donations be absolved, too?
Student loan interest? Hell, college credits as well?
My work here is, finally, done.
TryingToBeOpenMinded
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12/22/2014 3:09:30 PM
Posted: 1 year ago
At 12/22/2014 2:36:12 PM, Khaos_Mage wrote:

Well, you are right that it is unlikely to affect behavior on its own, when you figure 47% of people pay no federal income taxes. And, yes, I've managed to calculate close to this figure before.


Again, you're twisting my words. It's obvious that I intended to say that the tax breaks do not affect the people who are taking the tax breaks. Maybe you're being facetious but then you're derailing the discussion by bringing up tangential stats.

I also a strong believer of only an earned income tax credit that motivates people to work rather than direct welfare or minimum wage.
Well, the earned income tax credit is only on earned income.
Would you support welfare being treated as taxable income? Because it's not.


Welfare as taxable income? Are you serious? That's like saying the government gives you $10 and then they take back $3. I guess you can do that but what's the point? They can just give you $7 and save the paperwork. It's stupid but I think you're being serious.

With ACA, we need to get rid of healthcare deductions for everyone. Like I said, if everyone gets a deduction, then it's the same thing as no one getting it.
A point you did not address, health deductions are actually used by the poor more than the rich. (well, at least when compared to those who itemize).

Uh...you do realize in your stats, you didn't include the companies that take tax breaks. I don't understand why you would include this.

Further, you are aware that the ACA's "subsidies" are actually tax credits, right?
So, this is kind of hypocritical.


Although it's not important point, it's not true. The subsidies can be taken now because you can pay for health insurance premiums that can be a fraction of what's normals. So, the government puts up the money so it's not a tax credit.

Further, the difference between tax credit and welfare is timing. Which is my point. It's essentially the same but tax credit isn't viewed that way.

1040 needs to be cleaned up so we can do our taxes in under 30 minutes. The list of what needs to be done is long....
I'd say a good chunk of Americans can do their taxes in under 30 minutes, use 1040A or 1040EZ, and I just looked something up that said 46% of returns are these.
Further, doing them on paper is super fast, if you know what you are doing.


Uh...to take full advantage when you've got a lot of expenses and income, 30 minutes is impossible. If you make enough money to take all the various deductions, serious time is needed. But, I think that's my point. It doesn't affect behavior and so it's a complete waste of time. It's like your idea of giving $10 and then taking back $3 when you could have just given $7 to begin with.

You haven't answered this question, either:
Should the federal government tax me on money that is already taxed?

Of course not but I don't think property tax deduction is doing that. I think that's the whole point you're missing. If you eliminate the property tax deduction, then you would be able to reduce the tax rate so you would get at the end get taxed the same amount! But, now you wouldn't be distinguishing between the homeowners from the non-homeowners!

You can't get all uppity that I am putting words in your mouth when you can't answer simple questions directed at you.


You've asked a lot of questions in many different spots...it's hard to follow.

Here is another question:
Should charitible donations be absolved, too?

Yes. Definitely.

Student loan interest? Hell, college credits as well?

Yes. Definitely.
Khaos_Mage
Posts: 23,214
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12/23/2014 9:06:44 AM
Posted: 1 year ago
At 12/22/2014 3:09:30 PM, TryingToBeOpenMinded wrote:
At 12/22/2014 2:36:12 PM, Khaos_Mage wrote:

Well, you are right that it is unlikely to affect behavior on its own, when you figure 47% of people pay no federal income taxes. And, yes, I've managed to calculate close to this figure before.


Again, you're twisting my words. It's obvious that I intended to say that the tax breaks do not affect the people who are taking the tax breaks. Maybe you're being facetious but then you're derailing the discussion by bringing up tangential stats.

Then I am missing your point.

I also a strong believer of only an earned income tax credit that motivates people to work rather than direct welfare or minimum wage.
Well, the earned income tax credit is only on earned income.
Would you support welfare being treated as taxable income? Because it's not.


Welfare as taxable income? Are you serious? That's like saying the government gives you $10 and then they take back $3. I guess you can do that but what's the point? They can just give you $7 and save the paperwork. It's stupid but I think you're being serious.

Why is some income taxed than and not others?
That's a tax break.
You tax unemployment income, after all.

With ACA, we need to get rid of healthcare deductions for everyone. Like I said, if everyone gets a deduction, then it's the same thing as no one getting it.
A point you did not address, health deductions are actually used by the poor more than the rich. (well, at least when compared to those who itemize).

Uh...you do realize in your stats, you didn't include the companies that take tax breaks. I don't understand why you would include this.
And the ACA does nothing to change this, which is a point you did not address.
Further, the rich are not corporations, the rich are individuals.
So, again, you are being confusing.

Further, you are aware that the ACA's "subsidies" are actually tax credits, right?
So, this is kind of hypocritical.


Although it's not important point, it's not true. The subsidies can be taken now because you can pay for health insurance premiums that can be a fraction of what's normals. So, the government puts up the money so it's not a tax credit.
And it's reported on your tax return and regulated by the IRS.
IT IS A TAX CREDIT. It's an advanced tax credit.

Further, the difference between tax credit and welfare is timing. Which is my point. It's essentially the same but tax credit isn't viewed that way.
Then tax credits aren't welfare by your standard.
And, since tax deductions are not tax credits, I have no idea what the hell you are talking about anymore.

1040 needs to be cleaned up so we can do our taxes in under 30 minutes. The list of what needs to be done is long....
I'd say a good chunk of Americans can do their taxes in under 30 minutes, use 1040A or 1040EZ, and I just looked something up that said 46% of returns are these.
Further, doing them on paper is super fast, if you know what you are doing.


Uh...to take full advantage when you've got a lot of expenses and income, 30 minutes is impossible. If you make enough money to take all the various deductions, serious time is needed. But, I think that's my point. It doesn't affect behavior and so it's a complete waste of time. It's like your idea of giving $10 and then taking back $3 when you could have just given $7 to begin with.
So, the rich don't donate more than they otherwise would to reap tax benefits?
Do you agree that taxing someone MORE is going to affect their behavior? If so, then why is the reverse not true? And, Obama would disagree with you, since he claimed the green energy tax credit was a success.

And, to take advantage of all the balh, blah, blah.
Yes, it CAN take hours. Hell, it can take months for some businesses.
But, I'd say most people can do their taxes in less than one hour, if they know what they are doing and know what they qualify for.
An ex-student with one job making $30K with no property. That's a 1040A with one deduction, done in five minutes.
What's that? You have to file a schedule C? Well, that's going to take some prep time, and a bit longer, too.

But, that is the problem with laws. They are complicated.
So, let's just tax the poor more with a flat tax, then.

You haven't answered this question, either:
Should the federal government tax me on money that is already taxed?

Of course not but I don't think property tax deduction is doing that. I think that's the whole point you're missing. If you eliminate the property tax deduction, then you would be able to reduce the tax rate so you would get at the end get taxed the same amount! But, now you wouldn't be distinguishing between the homeowners from the non-homeowners!
So, I own property, and I pay the county/state $3,000. You expect me to be taxed on that $3,000 both on the state and federal level? That is the property tax deduction.
For the average homeowner, that means just owning the house, costs me at least (in MN) $3,450.
Keeping in mind that property taxes usually go towards local things, like police, schools, neighborhoods, while federal and state are a little more grand of usage (highways, military)

You can't get all uppity that I am putting words in your mouth when you can't answer simple questions directed at you.


You've asked a lot of questions in many different spots...it's hard to follow.
Not my problem you can't follow a conversation, especially one that you are trying to explain.

Here is another question:
Should charitible donations be absolved, too?

Yes. Definitely.

Student loan interest? Hell, college credits as well?

Yes. Definitely.

And, lastly, you aware aware that these also help the middle class, too, right?
The mortgage interest deduction, property tax deduction, and state tax deduction all help anyone who takes it, not just the rich. (for me, this is about $15K this year, which yields a tax savings of about $3,300)
The fact is, most poor people take the standard deduction instead of itemizing because they get MORE of a deduction.

To answer the OP, the reason why it isn't viewed as welfare for the rich is because the EVERYONE uses it if they can, and many people are not rich who do.
Do the rich benefit more for them? Yes, but they benefit the most from ANY deduction.
My work here is, finally, done.
16kadams
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12/23/2014 3:51:50 PM
Posted: 1 year ago
At 12/22/2014 9:57:07 AM, TryingToBeOpenMinded wrote:
At 12/21/2014 3:55:57 PM, 16kadams wrote:
At 12/19/2014 2:21:37 PM, TryingToBeOpenMinded wrote:
Why don't people view the tax deductions for stuff like mortgage interest and property taxes as welfare for the rich?

Government expenditures must be paid by taxes paid by the people. When you grant a tax deduction, you need to make up the shortfall by increasing the tax in another area. So, by granting tax deduction for homeowners, you must increase the taxes for non-homeowners. It's essentially a transfer of wealth from non-homeowners to homeowners. In other words, the poor to the rich. It's a huge ripoff for the non-homeowners.

(Here is an interesting spin. If everyone gets a tax deduction, no one gets a tax deduction. The reason is if you grant a tax deduction for everyone, then you have to increase the tax rate for everyone to make up for the shortfall.)

I don't doubt that the rich get "welfare" (and the reasons for higher class 'welfare' are backwards). However, the top quintile is the only quintile that gives significantly more wealth to the government then they revive. The poorest and second poorest quintiles take significantly more than they give. And the second richest quintile gives an insignificant amount of revenue to the government (http://www.aei.org...).

But this is more of a case against crony capitalism and the state's intervention in the market system, not an argument against the free market or the wealthy.

I'm not making an argument either against crony capitalism nor free market nor the wealthy.

Well crony capitalism deserves to be argued against.


The point I'm trying to make is that a lot of attention is given to how much welfare is given to the poor. But, people don't realize that the amount of tax breaks given to the rich is really staggering. It's not a few thousand here or there but amounts to tens of thousands that are given back to the wealthy. But, no one realizes that this is actually welfare but hidden under the guise of "tax breaks".

OK. And did you read the link I posted, which noted how the wealthy are the only quintile to give a significant amount of money back into the system, instead of just taking the benefits? It kinda refutes your entire premise... The people who are getting your 'welfare' are also the ones who pay the most taxes, and give *on net* more money to the government than they receive.


Personally, I think that most tax breaks should be eliminated. They don't influence behavior to the extent intended. For example, now that everyone has healthcare, why have tax breaks for it? If everyone gets tax breaks for them, it's really not a tax break. It's like giving you back a dollar via the tax break and then you giving it back through increased taxes. It's ludicrous.

Tax breaks don't influence people they way they were predicted? Sorry, its not like anyone has done research. Oh wait, they have. And the vast majority of the studies show tax breaks are actually good for the economy (http://taxfoundation.org...).

Further, using cross-sectional data, taxes were found to be one of the only factors differentiating European unemployment rates when compared to the US. "[T]ax rates between France and the United States explained nearly all of the 30 percent shortfall of labor inputs in France compared with the United States." http://www.econlib.org...
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TryingToBeOpenMinded
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12/24/2014 10:37:25 AM
Posted: 1 year ago
At 12/23/2014 3:51:50 PM, 16kadams wrote:
At 12/22/2014 9:57:07 AM, TryingToBeOpenMinded wrote:
At 12/21/2014 3:55:57 PM, 16kadams wrote:
At 12/19/2014 2:21:37 PM, TryingToBeOpenMinded wrote:
Why don't people view the tax deductions for stuff like mortgage interest and property taxes as welfare for the rich?

Government expenditures must be paid by taxes paid by the people. When you grant a tax deduction, you need to make up the shortfall by increasing the tax in another area. So, by granting tax deduction for homeowners, you must increase the taxes for non-homeowners. It's essentially a transfer of wealth from non-homeowners to homeowners. In other words, the poor to the rich. It's a huge ripoff for the non-homeowners.

(Here is an interesting spin. If everyone gets a tax deduction, no one gets a tax deduction. The reason is if you grant a tax deduction for everyone, then you have to increase the tax rate for everyone to make up for the shortfall.)

I don't doubt that the rich get "welfare" (and the reasons for higher class 'welfare' are backwards). However, the top quintile is the only quintile that gives significantly more wealth to the government then they revive. The poorest and second poorest quintiles take significantly more than they give. And the second richest quintile gives an insignificant amount of revenue to the government (http://www.aei.org...).

But this is more of a case against crony capitalism and the state's intervention in the market system, not an argument against the free market or the wealthy.

I'm not making an argument either against crony capitalism nor free market nor the wealthy.

Well crony capitalism deserves to be argued against.


The point I'm trying to make is that a lot of attention is given to how much welfare is given to the poor. But, people don't realize that the amount of tax breaks given to the rich is really staggering. It's not a few thousand here or there but amounts to tens of thousands that are given back to the wealthy. But, no one realizes that this is actually welfare but hidden under the guise of "tax breaks".

OK. And did you read the link I posted, which noted how the wealthy are the only quintile to give a significant amount of money back into the system, instead of just taking the benefits? It kinda refutes your entire premise... The people who are getting your 'welfare' are also the ones who pay the most taxes, and give *on net* more money to the government than they receive.


Do you realize how lopsided wealth distribution is in this country? The top 5% holds the same amount as the bottom 90%. In another post, I broke in down into pieces of corn if we were all farmers. The average person only gets .2 pieces of corn a year while the top 1% gets 26 pieces of corn. Do you realize how uneven that distribution is?

So, when you say that the top quintile pays most of the taxes, I would say that's not surprising when they take home almost all of the wealth generated in this country. (I'm not just saying majority but almost all. The disparity is staggering.)

And, I can personalize it for your own situation. I don't know what school you go to but if I had to make a guess, there is a more than 80% chance that you'll end up in the bottom 80%. In other words, there is a very good chance that you're going to be one of the people who only take home .2 pieces of corn while that one person over there takes 26 pieces.

But, we're getting a little sidetracked. My original point is that tax breaks is a hidden form of welfare that probably vastly exceeds actual welfare. (I haven't done the calculations so I'm just guessing.)


Personally, I think that most tax breaks should be eliminated. They don't influence behavior to the extent intended. For example, now that everyone has healthcare, why have tax breaks for it? If everyone gets tax breaks for them, it's really not a tax break. It's like giving you back a dollar via the tax break and then you giving it back through increased taxes. It's ludicrous.

Tax breaks don't influence people they way they were predicted? Sorry, its not like anyone has done research. Oh wait, they have. And the vast majority of the studies show tax breaks are actually good for the economy (http://taxfoundation.org...).


Uh...I'm not sure if you're doing this on purpose but you've misinterpreted my argument. I'm not saying that tax breaks don't promote growth (of course it does) but the tax break doesn't promote the behavior it was intended to do. For example, mortgage interest deduction was supposed to encourage people to become homeowners. But, since tax breaks come after the fact, it doesn't do this. People were going to buy the home whether or not they got the tax break. Additionally, the calculation of the tax break is so complicated and convoluted that it's impossible to determine beforehand what the tax break is going to be. So, how is it going to influence your behavior if you don't know what the actual tax break is?

Ironically, the website that you cited as evidence actually concurs with me on this point. That these tax breaks should be eliminated because they are unnecessarily confusing and doesn't achieve its intended effect.

Have you ever filed taxes before? Because if you have, you don't even need to provide research to prove this point. It's patently obvious when you try to figure out these deductions beforehand, it's extremely difficult. Who's going to know what your AGI is and how much is 8% of that is and whether your health expenses will exceed it and by how much? And, are you going to do this for each type of deduction as you go on with your life?
Greyparrot
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12/24/2014 11:10:03 AM
Posted: 1 year ago
If you are arguing for a normalization of income, you can't have a serious discussion about tax breaks for the rich without attacking crony capitalism.

You also have to recognize there exists a limit to how high you can tax before the general welfare suffers due to less products being produced domestically.
16kadams
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12/24/2014 12:32:38 PM
Posted: 1 year ago
At 12/24/2014 10:37:25 AM, TryingToBeOpenMinded wrote:
At 12/23/2014 3:51:50 PM, 16kadams wrote:
At 12/22/2014 9:57:07 AM, TryingToBeOpenMinded wrote:
At 12/21/2014 3:55:57 PM, 16kadams wrote:
At 12/19/2014 2:21:37 PM, TryingToBeOpenMinded wrote:
Why don't people view the tax deductions for stuff like mortgage interest and property taxes as welfare for the rich?

Government expenditures must be paid by taxes paid by the people. When you grant a tax deduction, you need to make up the shortfall by increasing the tax in another area. So, by granting tax deduction for homeowners, you must increase the taxes for non-homeowners. It's essentially a transfer of wealth from non-homeowners to homeowners. In other words, the poor to the rich. It's a huge ripoff for the non-homeowners.

(Here is an interesting spin. If everyone gets a tax deduction, no one gets a tax deduction. The reason is if you grant a tax deduction for everyone, then you have to increase the tax rate for everyone to make up for the shortfall.)

I don't doubt that the rich get "welfare" (and the reasons for higher class 'welfare' are backwards). However, the top quintile is the only quintile that gives significantly more wealth to the government then they revive. The poorest and second poorest quintiles take significantly more than they give. And the second richest quintile gives an insignificant amount of revenue to the government (http://www.aei.org...).

But this is more of a case against crony capitalism and the state's intervention in the market system, not an argument against the free market or the wealthy.

I'm not making an argument either against crony capitalism nor free market nor the wealthy.

Well crony capitalism deserves to be argued against.


The point I'm trying to make is that a lot of attention is given to how much welfare is given to the poor. But, people don't realize that the amount of tax breaks given to the rich is really staggering. It's not a few thousand here or there but amounts to tens of thousands that are given back to the wealthy. But, no one realizes that this is actually welfare but hidden under the guise of "tax breaks".

OK. And did you read the link I posted, which noted how the wealthy are the only quintile to give a significant amount of money back into the system, instead of just taking the benefits? It kinda refutes your entire premise... The people who are getting your 'welfare' are also the ones who pay the most taxes, and give *on net* more money to the government than they receive.


Do you realize how lopsided wealth distribution is in this country? The top 5% holds the same amount as the bottom 90%. In another post, I broke in down into pieces of corn if we were all farmers. The average person only gets .2 pieces of corn a year while the top 1% gets 26 pieces of corn. Do you realize how uneven that distribution is?


So? My dad owns a business and gets more than his workers. He works there from 8 - 10 each night, spends his free time working, etc. His workers work from 8 - 5 and get breaks in between. He deserves more. Wealth inequality doesn't worry me much. Most of them deserve it. There is also an economic argument that *some* economic inequality is a good thing. If anything, how income *moves* is more important than an inequality snap-shot. Most people being paid minimum wage get more money by the end of the year. Most of the lower and middle classes are moving up the economic scale, not down.

So, when you say that the top quintile pays most of the taxes, I would say that's not surprising when they take home almost all of the wealth generated in this country. (I'm not just saying majority but almost all. The disparity is staggering.)

Why should people who work more pay more taxes?


And, I can personalize it for your own situation. I don't know what school you go to but if I had to make a guess, there is a more than 80% chance that you'll end up in the bottom 80%. In other words, there is a very good chance that you're going to be one of the people who only take home .2 pieces of corn while that one person over there takes 26 pieces.

How does that mean he has to pay more? Just because I am a wealthy person does not mean I should be forced to give it away. If they want to, they can. If they don't, I don't see why having a high income means they should be forced to give it to the government. In many cases, they use *fewer* government resources (send their children to private schools, use other modes of transportation than government roads and buses, etc.)

Charging people based on the services they use makes more sense than based on income. However, a low rate flat tax would be a happy medium.


But, we're getting a little sidetracked. My original point is that tax breaks is a hidden form of welfare that probably vastly exceeds actual welfare. (I haven't done the calculations so I'm just guessing.)


I already gave you the calculations. The welfare the rich get is miniscule in comparison to what they give back to the government--and the economy. I support tax breaks for everyone, not just the rich. But if tax breaks for the rich are described as 'welfare', I suppose I support welfare.


Tax breaks don't influence people they way they were predicted? Sorry, its not like anyone has done research. Oh wait, they have. And the vast majority of the studies show tax breaks are actually good for the economy (http://taxfoundation.org...).


Uh...I'm not sure if you're doing this on purpose but you've misinterpreted my argument. I'm not saying that tax breaks don't promote growth (of course it does) but the tax break doesn't promote the behavior it was intended to do. For example, mortgage interest deduction was supposed to encourage people to become homeowners. But, since tax breaks come after the fact, it doesn't do this. People were going to buy the home whether or not they got the tax break. Additionally, the calculation of the tax break is so complicated and convoluted that it's impossible to determine beforehand what the tax break is going to be. So, how is it going to influence your behavior if you don't know what the actual tax break is?

Ironically, the website that you cited as evidence actually concurs with me on this point. That these tax breaks should be eliminated because they are unnecessarily confusing and doesn't achieve its intended effect.

I know. The current tax code should be abolished. Do we agree on that?


Have you ever filed taxes before? Because if you have, you don't even need to provide research to prove this point. It's patently obvious when you try to figure out these deductions beforehand, it's extremely difficult. Who's going to know what your AGI is and how much is 8% of that is and whether your health expenses will exceed it and by how much? And, are you going to do this for each type of deduction as you go on with your life?

Luckily I am 17 so no. But my parents own a business and are doctors. They hate the tax code and current regulations. But they would love to see a tax break, even if it is called welfare. lol
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https://rekonomics.wordpress.com...
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TryingToBeOpenMinded
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12/25/2014 3:03:06 AM
Posted: 1 year ago
At 12/24/2014 12:32:38 PM, 16kadams wrote:

So? My dad owns a business and gets more than his workers. He works there from 8 - 10 each night, spends his free time working, etc. His workers work from 8 - 5 and get breaks in between. He deserves more. Wealth inequality doesn't worry me much. Most of them deserve it. There is also an economic argument that *some* economic inequality is a good thing. If anything, how income *moves* is more important than an inequality snap-shot. Most people being paid minimum wage get more money by the end of the year. Most of the lower and middle classes are moving up the economic scale, not down.


I never said that people"s income should be equal. Reread my comments. It"s the lopsided nature of the distribution that I am complaining about. I"m realizing the numbers I used don"t make a meaningful impression on you.

Think of it like this. If you and I were on a island and we only grew corn, the current distribution would work out like this. Say I work harder and smarter but we still need to work together to grow the corn. Due to my clever negotiation, I take 99% of the wealth and you take 1%. That"s actually a realistic ratio that illustrates the disparity between the bottom 80% and the top 10%. It"s really that big.

Btw, not important issues but just a response to 2 of your comments.

"Most people being paid minimum wage get more money by the end of the year." Do you know how hard it is to live on minimum wage?!?!? I mean just think about living on $15k/year. You've gotta pay housing, food, clothes, etc. all on a little more than $1k/month. It's near impossible. Given your age, you probably can't empathize but trust me, it really sucks.

"Most of the lower and middle classes are moving up the economic scale, not down." I won"t get into it but this statement is mathematically impossible.


How does that mean he has to pay more? Just because I am a wealthy person does not mean I should be forced to give it away. If they want to, they can. If they don't, I don't see why having a high income means they should be forced to give it to the government. In many cases, they use *fewer* government resources (send their children to private schools, use other modes of transportation than government roads and buses, etc.)


There are many justifications.

First, the wealthy person pays more in taxes because the initial distribution that was determined by our social contract was unfair to begin with. Even if you work harder, you don"t work 10 times harder so why should you get paid 10 to 200 times more? (The 20% makes about ten times more than the bottom 80% and the 1% makes about 200 times more.)

Second, just because you work harder, it doesn"t mean you HAVE to get paid more. This isn"t a self-evident truth like most people like to believe. If you take a ulitarian approach and are trying to maximize total happiness by its members, then this axiom is definitely not valid.

There are many other reasons (such as the ability to bequeath your wealth gives an unfair advantage to people) but you get the idea.

Charging people based on the services they use makes more sense than based on income. However, a low rate flat tax would be a happy medium.


You"re referring to a progressive consumption tax. I agree with this. But, a low rate flat tax would exacerbate the current lopsided inquality. Not sure why you would say it would be a happy medium when you're moving more to one side rather than the middle.


I already gave you the calculations. The welfare the rich get is miniscule in comparison to what they give back to the government--and the economy. I support tax breaks for everyone, not just the rich. But if tax breaks for the rich are described as 'welfare', I suppose I support welfare.


You"re calculations are competely off. I haven"t done the exact calculations but the benefits that the wealthy get probably vastly exceed welfare by the poor. Corporate welfare for the top fortune 500 companies alone is $63 billion. That's just subsidies.

You don"t realize it but a lot of the money that"s paid by the top is actually given right back to them via tax deductions and corporate subsidies.
Wocambs
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12/25/2014 9:19:16 PM
Posted: 1 year ago
At 12/19/2014 2:21:37 PM, TryingToBeOpenMinded wrote:
Why don't people view the tax deductions for stuff like mortgage interest and property taxes as welfare for the rich?

Government expenditures must be paid by taxes paid by the people. When you grant a tax deduction, you need to make up the shortfall by increasing the tax in another area. So, by granting tax deduction for homeowners, you must increase the taxes for non-homeowners. It's essentially a transfer of wealth from non-homeowners to homeowners. In other words, the poor to the rich. It's a huge ripoff for the non-homeowners.

(Here is an interesting spin. If everyone gets a tax deduction, no one gets a tax deduction. The reason is if you grant a tax deduction for everyone, then you have to increase the tax rate for everyone to make up for the shortfall.)

Government policy causing wealth to be distributed more equally is evil socialism. Government policy causing wealth to be distributed less equally is rugged individualism.

Seems legit.

You're right, I mean. The government enacts policies that have an effect on the distribution of wealth, and policies that cause more unequal distribution are not looked at as gifts to the rich, welfare for the rich, or whatever. The reason being of course that those in power don't really want people having that thought.
TryingToBeOpenMinded
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12/26/2014 8:51:36 AM
Posted: 1 year ago
At 12/25/2014 9:19:16 PM, Wocambs wrote:
At 12/19/2014 2:21:37 PM, TryingToBeOpenMinded wrote:
Why don't people view the tax deductions for stuff like mortgage interest and property taxes as welfare for the rich?

Government expenditures must be paid by taxes paid by the people. When you grant a tax deduction, you need to make up the shortfall by increasing the tax in another area. So, by granting tax deduction for homeowners, you must increase the taxes for non-homeowners. It's essentially a transfer of wealth from non-homeowners to homeowners. In other words, the poor to the rich. It's a huge ripoff for the non-homeowners.

(Here is an interesting spin. If everyone gets a tax deduction, no one gets a tax deduction. The reason is if you grant a tax deduction for everyone, then you have to increase the tax rate for everyone to make up for the shortfall.)

Government policy causing wealth to be distributed more equally is evil socialism. Government policy causing wealth to be distributed less equally is rugged individualism.

Seems legit.

You're right, I mean. The government enacts policies that have an effect on the distribution of wealth, and policies that cause more unequal distribution are not looked at as gifts to the rich, welfare for the rich, or whatever. The reason being of course that those in power don't really want people having that thought.

Wow, something that we finally agree on!

(I still think communism will never work.)
Greyparrot
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12/26/2014 11:33:34 AM
Posted: 1 year ago
At 12/25/2014 3:03:06 AM, TryingToBeOpenMinded wrote:

There are many justifications.

First, the wealthy person pays more in taxes because the initial distribution that was determined by our social contract was unfair to begin with. Even if you work harder, you don"t work 10 times harder so why should you get paid 10 to 200 times more? (The 20% makes about ten times more than the bottom 80% and the 1% makes about 200 times more.)

Second, just because you work harder, it doesn"t mean you HAVE to get paid more. This isn"t a self-evident truth like most people like to believe. If you take a ulitarian approach and are trying to maximize total happiness by its members, then this axiom is definitely not valid.

There are many other reasons (such as the ability to bequeath your wealth gives an unfair advantage to people) but you get the idea.

Charging people based on the services they use makes more sense than based on income. However, a low rate flat tax would be a happy medium.


So the tax code should be purely based on the gallons of sweat produced?

Working smarter should be discouraged?

Behaviors such as saving a lot of money and then gambling it smartly through investing should be discouraged?

Would the country truly be a better place with a 100 percent blue-collar workforce?
TryingToBeOpenMinded
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12/26/2014 12:59:38 PM
Posted: 1 year ago
At 12/26/2014 11:33:34 AM, Greyparrot wrote:
At 12/25/2014 3:03:06 AM, TryingToBeOpenMinded wrote:

There are many justifications.

First, the wealthy person pays more in taxes because the initial distribution that was determined by our social contract was unfair to begin with. Even if you work harder, you don"t work 10 times harder so why should you get paid 10 to 200 times more? (The 20% makes about ten times more than the bottom 80% and the 1% makes about 200 times more.)

Second, just because you work harder, it doesn"t mean you HAVE to get paid more. This isn"t a self-evident truth like most people like to believe. If you take a ulitarian approach and are trying to maximize total happiness by its members, then this axiom is definitely not valid.

There are many other reasons (such as the ability to bequeath your wealth gives an unfair advantage to people) but you get the idea.

Charging people based on the services they use makes more sense than based on income. However, a low rate flat tax would be a happy medium.


So the tax code should be purely based on the gallons of sweat produced?

Working smarter should be discouraged?

Behaviors such as saving a lot of money and then gambling it smartly through investing should be discouraged?

Would the country truly be a better place with a 100 percent blue-collar workforce?

I don't know of where you get this because I do believe if you make the right decisions, you should be rewarded. Just because I'm against something, it doesn't mean I'm an advocate of the direct opposite.

Like I've said repeatedly, I think that the current distribution of wealth is completely lopsided. I don't think people realize how uneven it is. The bottom 90% of the population only owns a third of the wealth of our society.

Do you realize that all the great wealth that was created in the last 30 years from computers, the internet, productivity, etc. Did you get any of it? Nope. All of that wealth went to the top 1%. Do you realize how crazy that it? The median income of the bottom hasn't gone up in the last 30 years if you adjust for inflation. The next 14% does go up but only perhaps 50% (I don't have the exact numbers) but wealth has gone up 6 times and the 1% has taken almost all of it. Do you think that this winner take all is fair? It's so much greed.