OT: Can anyone explain this to me?

[Boom Boom]

I can’t imagine looking at anything more differently than this.

That should not be the case. Sounds emotional, not logical.

What if congress passed a law that you are taxed at 100%? After all, it’s not your money. Then they spread out the money evenly with services regardless of how hard you work, if you work at all, or if you provide any value whatsoever.

that would not be the same, as i would not be paying my bill due. To be clear, I am NOT saying it's not my money etc, I am saying I have an obligation and I don't see paying a bill for services rendered as taking my money.

You can’t seriously believe the tax code is perfect and it’s not your money if they say it isn’t. I don’t believe you.

Oh hell no it's not perfect! It's absolutely possible that certain payers could be paying more than they "should" be. But with a giant deficit and an entire Party that can't point to things to cut (other than volcano monitoring) that isn't clearly just ideological opposition not budgeting, then it's pretty hard to make that case.

 

[Boom Boom]

There is no "standard rate". There are tax brackets that apply to taxable earnings. Low income people aren't getting a handout because they're not paying 37% on any of their taxable income. There are deductions that are better or worse from a policy standpoint, but for the most part they are not handouts although I'm sure there are some that are particularly unjustifiable that might qualify. None of what you listed is even arguably a handout except for the child tax credits. And again, for people not receiving a "refundable" part of the tax credit, even then it's arguably just balancing out the screwing they get on FICA.

So, if Congress passed a bill applying a 100% deduction to all of African descent as "reparations", this is ok because it's just their money and not a handout?

 

[Boom Boom]

There is no "standard rate". There are tax brackets that apply to taxable earnings. Low income people aren't getting a handout because they're not paying 37% on any of their taxable income. There are deductions that are better or worse from a policy standpoint, but for the most part they are not handouts although I'm sure there are some that are particularly unjustifiable that might qualify. None of what you listed is even arguably a handout except for the child tax credits. And again, for people not receiving a "refundable" part of the tax credit, even then it's arguably just balancing out the screwing they get on FICA.

Well, there's also the "effective" tax rate: the actual tax paid divided by actual income.

So much propaganda revolves around not counting certain income of rich people as actual income, just because some weenie put it as such in the tax code, and others are the dishonest type that will defend the fiction to achieve the ends they want.

 

[pseudonym]

So, if Congress passed a bill applying a 100% deduction to all of African descent as "reparations", this is ok because it's just their money and not a handout?

This is a better idea than the standard proposal of reparations in the form of actual handouts.

The reason you think of a tax break as a handout is because, fundamentally, you think you are entitled to the output of someone else's labor. This is one of the problems with income tax in the first place: It communicates that the government owns 100% of your labor, and they get to decide how much of the output of your labor you get to keep each year.

Personally, I don't like how complicated the tax code is. If it were up to me, I would:

1. abolish the income tax altogether
2. short of #1, simplify the tax code with one standard deduction and one tax rate.

You could have argued that there are tax breaks that unfairly benefit the rich and special interests, and that would have been an interesting argument to hear. But instead, you started from the fundamental philosophy that the government owns your labor and any amount of tax you don't pay is a handout.

 

[horshack.sixpack]

Someone legally earning money and legally keeping it = handout?

And he's doing mental gymnastics?

What would you call mortgage tax credit other than a subsidy/handout? I know that us homeowning Americans don't like the idea that we get any help from the federal government because it squashes our ideas that we don't need anybody's help. The reality is that you just have a more affluent version of a housing subsidy.

 

[dorndawg]

What would you call mortgage tax credit other than a subsidy/handout? I know that us homeowning Americans don't like the idea that we get any help from the federal government because it squashes our ideas that we don't need anybody's help. The reality is that you just have a more affluent version of a housing subsidy.

 

[horshack.sixpack]

That's pretty much true of all countries that have had sovereign debt crises and hyper inflation. Certainly easier for some countries than others and it should be really easy for the US. But based on our current voting population, I think we will go the Argentina route and essentially vote to continue handing out money and create an inflation crisis rather than trying to act responsibly. We're going to keep taking on debt as long as people will let us before we address the ponzi-like entitlements or slow down the pork.

This is most likely. The only party concerned about fiscal responsibility is the one not in power. I still find it amazing that Bill Freaking Clinton is the only president to hand us a surplus in ages...someone should go study how that happened and attempt something similar.

 

[johnson86-1]

What would you call mortgage tax credit other than a subsidy/handout? I know that us homeowning Americans don't like the idea that we get any help from the federal government because it squashes our ideas that we don't need anybody's help. The reality is that you just have a more affluent version of a housing subsidy.

Equalizing treatment between rental and owner occupied housing.

I wish we'd phase it out and think it's done more harm than good, but it's absurd to call it a handout. The only people that do that are ones that are knowingly trying to obfuscate and those that have been suckered by people trying to obfuscate.

 

[horshack.sixpack]

Equalizing treatment between rental and owner occupied housing.

I wish we'd phase it out and think it's done more harm than good, but it's absurd to call it a handout. The only people that do that are ones that are knowingly trying to obfuscate and those that have been suckered by people trying to obfuscate.

Admittedly, I'm pretty ignorant on the origin, but I thought started as a way to encourage home ownership. I think the terms we use for these things are mostly semantics. If you have a mortgage on a home, then the government has decided to exempt the interest on your debt from taxation. For whatever reason, we get that money handed back to us. If you just look at mortgage interest deductions against the money spend on directly subsidized housing it is 3x the amount. So one could posit that the people who need it the least (i.e. can afford to buy a house/pay a mortgage) get the largest benefit from the government, ahead of the people who need it the most (i.e. they qualify for subsidized housing). Not unlike the 401k, which I participate in, it largely exists to benefit the haves, whether that was the original intent or not.

ETA: Also, there is a 0% chance that I'll not be taking the exemption as long as it exists because one thing that an ineffective/inefficient government does is instill in people's minds that it will not make the best use of our money, so we might as well keep as much for ourselves as possible. I still think a flat tax would be great with two tiers: below poverty line level and above poverty line level.

 

[mstateglfr]

Equalizing treatment between rental and owner occupied housing.

I wish we'd phase it out and think it's done more harm than good, but it's absurd to call it a handout. The only people that do that are ones that are knowingly trying to obfuscate and those that have been suckered by people trying to obfuscate.

What term do you use to categorize a mortgage tax credit?

You clearly don't view the credit as a subsidy or a handout, even though it effectively does the same thing that other programs do, which are accepted as being subsidies and handouts.

Cool then, but what do you call the category?

 

[johnson86-1]

This is most likely. The only party concerned about fiscal responsibility is the one not in power. I still find it amazing that Bill Freaking Clinton is the only president to hand us a surplus in ages...someone should go study how that happened and attempt something similar.

He had a republican congress and was scared by swing voters that still cared about the deficit and debt.

By the time Obama rolled around, the pork interests were so much stronger than the deficit hawks republican voters that they couldn't make a deal. The only reason we got sequestration is that people voting for it naively thought they'd be able to reach a deal on targeted cuts. If they had realized they wouldn't be able to, we probably wouldn't have even gotten sequestration.

Now deficit hawks have basically zero power. Their influence extends to certain leadership having to occasionally pretend to care about spending. Where republican congressmen used to at least pretend to care about deficits when a democrat was president and would prefer lower spending to spending on democrat priorities, now they just want to make sure they get their share of pork and graft. They end up actually making it worse rather than tamping spending down like they did with Clinton and Obama because they're just another constituency to buy off.

 

[pseudonym]

What would you call mortgage tax credit other than a subsidy/handout? I know that us homeowning Americans don't like the idea that we get any help from the federal government because it squashes our ideas that we don't need anybody's help. The reality is that you just have a more affluent version of a housing subsidy.

Again, we are coming from different philosophies. Some believe the government allowing you to keep the output of your labor = handout. Others don't. I'm not going to try to undo decades of programming.

But I'd be happy to get rid of the mortgage interest deduction.

 

[johnson86-1]

Admittedly, I'm pretty ignorant on the origin, but I thought started as a way to encourage home ownership. I think the terms we use for these things are mostly semantics. If you have a mortgage on a home, then the government has decided to exempt the interest on your debt from taxation. For whatever reason, we get that money handed back to us. If you just look at mortgage interest deductions against the money spend on directly subsidized housing it is 3x the amount. So one could posit that the people who need it the least (i.e. can afford to buy a house/pay a mortgage) get the largest benefit from the government, ahead of the people who need it the most (i.e. they qualify for subsidized housing). Not unlike the 401k, which I participate in, it largely exists to benefit the haves, whether that was the original intent or not.

ETA: Also, there is a 0% chance that I'll not be taking the exemption as long as it exists because one thing that an ineffective/inefficient government does is instill in people's minds that it will not make the best use of our money, so we might as well keep as much for ourselves as possible. I still think a flat tax would be great with two tiers: below poverty line level and above poverty line level.

All interest used to be deductible. My understanding was that it was on the theory that interest paid by somebody was income to somebody else, therefore deducting interest payments and taxing the receipt of interest was logical. I don't know why this wasn't applied to pretty much any expenditure.

But with respect to the money spent on subsidized housing, you are ignoring the deductions for interest on the rental stock. If you include deductibility of interest as a subsidy, then the subsidy to non-owner occupied housing is way bigger, as practically all of that interest gets deducted whereas lots of homeowners still don't itemize.

 

[pseudonym]

Admittedly, I'm pretty ignorant on the origin, but I thought started as a way to encourage home ownership. I think the terms we use for these things are mostly semantics. If you have a mortgage on a home, then the government has decided to exempt the interest on your debt from taxation. For whatever reason, we get that money handed back to us. If you just look at mortgage interest deductions against the money spend on directly subsidized housing it is 3x the amount. So one could posit that the people who need it the least (i.e. can afford to buy a house/pay a mortgage) get the largest benefit from the government, ahead of the people who need it the most (i.e. they qualify for subsidized housing). Not unlike the 401k, which I participate in, it largely exists to benefit the haves, whether that was the original intent or not.

This is where you lose me. When is that money handed back to us?

 

[horshack.sixpack]

Again, we are coming from different philosophies. Some believe the government allowing you to keep the output of your labor = handout. Others don't. I'm not going to try to undo decades of programming.

But I'd be happy to get rid of the mortgage interest deduction.

Should a person who expects a functioning federal government, and all the benefits thereof, expect to pay nothing for it? How much is enough? We are among the least taxed countries in the world. For me the dissonance is all the things I'd like the government to be, and willing to pay for vs the idea that there is so much corruption and general incompetence that I should not want to add fuel to the fire. It's quite the dichotomy.

 

[horshack.sixpack]

This is where you lose me. When is that money handed back to us?

Most often in your tax refund, or reduced tax burden as compared to non-home owners, but it absolutely hits your bottom line.

 

[mstateglfr]

This is where you lose me. When is that money handed back to us?

Money doesn't need to be physically handed from me to the government for money to be handed back to me by the government.
It is handed back to us during tax season when everyone figures out if they owe or get a refund from the prior year.



...have you never paid a mortgage or even read about them?

 

[mstateglfr]

Again, we are coming from different philosophies. Some believe the government allowing you to keep the output of your labor = handout. Others don't. I'm not going to try to undo decades of programming.

But I'd be happy to get rid of the mortgage interest deduction.

I think you would be in the minority of homeowners who would be happy to get rid of that deduction.

 

[pseudonym]

Most often in your tax refund, or reduced tax burden as compared to non-home owners, but it absolutely hits your bottom line.

As I suspected, we are on the same page in terms of the mechanics. We just disagree on whose money it is in the first place.

 

[dorndawg]

Should a person who expects a functioning federal government, and all the benefits thereof, expect to pay nothing for it? How much is enough? We are among the least taxed countries in the world. For me the dissonance is all the things I'd like the government to be, and willing to pay for vs the idea that there is so much corruption and general incompetence that I should not want to add fuel to the fire. It's quite the dichotomy.

It's almost as though the U-S-A! PATRIOTZ is all talk, and nowhere to be found when the bill comes due.

 

[pseudonym]

Money doesn't need to be physically handed from me to the government for money to be handed back to me by the government.
It is handed back to us during tax season when everyone figures out if they owe or get a refund from the prior year.



...have you never paid a mortgage or even read about them?

Less than 1% of my interaction with money involves physical cash or even a physical check. That is not the point of disagreement. We disagree on whose money it is in the first place.

 

[johnson86-1]

Should a person who expects a functioning federal government, and all the benefits thereof, expect to pay nothing for it? How much is enough? We are among the least taxed countries in the world. For me the dissonance is all the things I'd like the government to be, and willing to pay for vs the idea that there is so much corruption and general incompetence that I should not want to add fuel to the fire. It's quite the dichotomy.

If you want to look at it by income, the federal government has generally been spending around 20% of GDP (this is increased massively recently, and is now around 24%). GDP isnt' equivalent to income, but take the 20% number (b/c the recent increase isn't b/c of an increase in actual costs; just more pork), take out the half that are transfer payments, and I think if you're not paying a 10% effective tax rate, that's a good ball park for determining whether you are paying your fair share for government, or at least paying an amount that would allow for a functioning federal government.

If you're paying a 20% effective tax rate, you are more than paying for your share of not only a functional government but also all the dysfunctional parts (or at least until the recent spike).

Alternatively, if you want to look at headcount rather than income, we're spending something like 6.5 trillion this year, so with 333M people, that works out to roughly $19,519 per person. So if you are paying that per family member, you're certainly paying your fair share or more.

If you limit it to just adults, it's about $25k per adult, so that per adult would be the cutoff for saying you are for sure paying your share or more.

Of course those numbers are talking assume income taxes are the only revenue. Would be a little less than that if you backed out other income. And then how you determine how much of a tariff burden or corporate income tax burden you bear is pretty difficult to determine. Subtracting corporate taxes, tariffs, and other revenue from the 6.5 trillion would probably give a fairer number.

 

[mstateglfr]

Less than 1% of my interaction with money involves physical cash or even a physical check. That is not the point of disagreement. We disagree on whose money it is in the first place.

yes, you have made that clear. It is a push vs pull argument. Is it my money or the governments money. I get what you were saying.
But you are effectively making a distinction without a difference.



To be clear though, a tax credit or deduction is something that does not apply to everyone, so it is the government giving money back to specific people who qualify for that credit or deduction. Everyone pays taxes, and then those who qualify for specific credits or deductions get to apply those, and the government then reduces those peoples tax burdens accordingly.
If someone doesn't have 12mo worth of mortgage interest to claim, they can't don't get to claim 12mo of deduction.

I guess you could pay basicay nothing in taxes thru paycheck and then just pay what you owe at the end.
If that makes you feel better, since it would be you paying the gvt and not the gvt 'giving you' money back.