119 replies to this topic

[FCP Bob]

I think the discussion about reforming the tax system deserves it's own thread.Feel free to post anything tax related in this thread.

[FCP Bob]

This article is about The US but the discussion about whether charitable giving should be a tax expenditure is valid for many countries.The Charitable Deduction as a Tax Expenditure: What it Buys and What to Do About It

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The Bottom Line The bottom line is that the popularity of the charitable deduction rests on a set of false premises. In reality, the deduction is best viewed not as a reduction in taxation but as an increase in expenditures. Surprisingly little of the giving that qualifies for the deduction goes to truly charitable purposes. And warnings that the nonprofit sector would face collapse without the charitable deduction are greatly exaggerated, if not altogether baseless. My personal conclusion is that Congress should simply abolish the charitable deduction along with the host of other tax loopholes that permeate our rotten tax code. However, that may be too radical for many.

[Balloon guy]

Yea, let's focus on risking charities ability to help the poor and needy to fix the 120,000 page tax code....We can look at depreciation of corporate assets much much later.Plus it will be a great time to get the government involved in feeding the millions of meals a day charities provide for the homeless.

[brvheart]

The conclusion of that article is insane. It's super funny when he dissects how "worthless" churches are at "helping people" too. lol. Having staff and a buliding is such a waste! Why not just help people via robots?!Also, it was really hard to keep reading after this line: "(I am assuming here that Boeing actually pays taxes, as it claims to do; a premise that some dispute.)"That screams, "I'm a bias left-wing piece of shit that doesn't know what the hell I'm talking about, but I'm going to take little jabs that are obviously not true so that other left wing people will rally behind my stupid article...."

[hblask]

I've discussed my version of tax reform before - a land tax -- and have yet to meet any serious objections other than "we can't get there from here".My second favored method is The Fair Tax, or some version of a national sales tax to replace all other taxes. To make it "fair" (whatever that means), you either give everyone a prebate for the amount of taxes a poor person would pay, or you just don't tax anything that poor people *need*. So maybe houses are taxed after $150,000, or rent over $2500. Basically, anything that people think the poor need to live, you don't tax it, and just raise the rate on everything else accordingly. The drawback to this: the govt would keep just enough of the other taxes to slowly bring them back, and we'd end up with *both* a sales and income tax.This is no third choice. Reforming the system bit by bit will never ever happen, because the rich own congress. It's gotta be like a Band-Aid, just pull it all at once.

[BaseJester]

I've always thought the mortgage interest deduction was special interest pandering. Get rid of that.

[hblask]

BaseJester, on Friday, April 20th, 2012, 7:37 PM, said:

I've always thought the mortgage interest deduction was special interest pandering. Get rid of that.

Yeah, that's definitely one of the low hanging fruit if all we can get is reform of our ridiculously flawed system. I forget the exact number, but it's almost all of the benefit of the mortgage deduction goes to those with incomes over $100K.

[LongLiveYorke]

hblask, on Friday, April 20th, 2012, 8:49 PM, said:

I've discussed my version of tax reform before - a land tax -- and have yet to meet any serious objections other than "we can't get there from here".

Well, it would be incredibly regressive. It would mean that you could make as much money as you want and not pay more in taxes if your land size remains constant.In addition, it makes no sense for people living in cities.Also, the tax itself would be completely determined by how the government determines the rate of different areas. So, it would effectively give the government control over the distribution of populations, where people live, etc (I'm assuming you don't want a constant rate, right, because then that kills farmers, etc).Honestly, I don't see any good reasons why this is a good idea.

[hblask]

LongLiveYorke, on Saturday, April 21st, 2012, 7:56 AM, said:

Well, it would be incredibly regressive. It would mean that you could make as much money as you want and not pay more in taxes if your land size remains constant.

Except the rich own land in areas where land is valuable; the poor don't own land at all. That's about as progressive as you can get: no taxes vs very high taxes that increase the more you have. (It's a tax on land *value*, not land *area*).

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In addition, it makes no sense for people living in cities.

Why do you say this? Basically, *somebody* owns the land, just maybe not the person renting the office in the building on that land. Whoever owns Rockefeller center would pay LOTS of taxes, the guy renting an apartment in Brooklyn pays none. Of course, in real life, the costs get allocated to the renters, but that's true with any type of tax -- taxes always get reallocated according to supply, demand, and ability of individuals.

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Also, the tax itself would be completely determined by how the government determines the rate of different areas. So, it would effectively give the government control over the distribution of populations, where people live, etc (I'm assuming you don't want a constant rate, right, because then that kills farmers, etc).

No, it would be a single tax rate for the entire country. And it would be based on the value of the land, which is very easy to determine based on public records.

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Honestly, I don't see any good reasons why this is a good idea.

1. Extremely easy to implement -- run a computer analysis on land values, send a bill. No invasive forms, no audits, No IRS, nothing. Collection costs are almost zero. 2. Extremely visible -- no back door hidden taxes for bureaucrats to sneak through buried in a 1000 page bill, and it takes the courage of convictions to change it (either up or down), because everyone is watching. Everyone knows EXACTLY what the govt costs them so that they can make effective cost-benefit decisions.3. Simple -- not susceptible to the shenanigans of lobbyists or other favoritism. One rate for the whole country. Senator McGraft can't insert a tax break for his uncle's wife's kid for that new startup.4. Fair -- people pay in relation to the amount they get from the economy. People tend to own or use land in direct relationship to their relative position in the economy. Land use is an excellent proxy for wealth. Therefore, the more they get, the more they pay, in a very direct way.5. Prevents land speculation. This is an argument for those who believe that we all have equal right to the earth, and that govt is artificially destroying that right by allowing property ownership. By charging people in direct relationship to the portion of the earth they are using, you are offsetting the advantage of having land, making for a more equal society. The rich cannot just buy up huge tracts of land in the hope that it will eventually be worth more. Instead, that land is more available to the rest of society. [To me, this is a good argument built on a weak premise, but thought I'd include it for completeness].Does my explanation cover your objections? It seems like your objections are based on misunderstanding what it is, not the actual idea. With the above explanation, do you still have objections? Because to me it seems like such a radical idea that there's got to be something wrong with it. When I heard about it I originally thought it was nuts, for some of the same reasons you do, but the more I discussed it with people, the more I like it. It has all the features of a good tax code: fair, simple, visible, difficult to corrupt, and easy to implement.Frankly, I keep waiting for a reason to hate it, because then I could just drop the idea.

[vbnautilus]

#4 is obviously the weak point. There might be some relationship between land use and wealth, but that doesn't mean land use is the best metric for wealth. A company like Facebook can amass half the world's wealth while renting a small office, and pay no taxes. They would just have incentive to never buy any office space of their own.

[Sal Paradise]

what about people that own a lot of land but not much else? my family owns (and I will own soon if my mom can figure out how to transfer it to me without paying out the ass in taxes) a decent sized piece of land, but we're poor. land tax get's instituted either I'm paying my whole salary into a tax to keep the land or I sell it and it gets clearcutted and developed. that's fucked up.

[hblask]

vbnautilus, on Saturday, April 21st, 2012, 10:40 AM, said:

#4 is obviously the weak point. There might be some relationship between land use and wealth, but that doesn't mean land use is the best metric for wealth. A company like Facebook can amass half the world's wealth while renting a small office, and pay no taxes. They would just have incentive to never buy any office space of their own.

The goal is not really to tax every dollar at every point. The fact that Facebook the corporation pays fewer taxes means the employees and shareholders have more money. This leads to them buying bigger houses, etc. Eventually, people want physical stuff. But you may have a point, this favors service type businesses over physical-based businesses. I guess the question is whether that's a good thing or a bad thing. If you can provide goods and services to people using fewer physical resources, wouldn't that be a very good trend?Perhaps this goes back to the Georgian roots of this idea, that land, being a gift from nature, belongs to us all. Therefore, since the govt is dividing it up, those who benefit should pay, those who don't benefit do not. I guess the idea is that pretty much everything else is the fruit of our labor and therefore ours to keep. I don't completely buy into this line of argument because it could be used to justify some really bad ideas. But there is something appealing about the idea of land being the only pure gift from nature so it's what we owe to each other.There is a group of people who would escape completely -- people who buy a yacht and never permanently land anywhere. That group is probably small enough to ignore.

[hblask]

Sal Paradise, on Saturday, April 21st, 2012, 11:20 AM, said:

what about people that own a lot of land but not much else? my family owns (and I will own soon if my mom can figure out how to transfer it to me without paying out the ass in taxes) a decent sized piece of land, but we're poor. land tax get's instituted either I'm paying my whole salary into a tax to keep the land or I sell it and it gets clearcutted and developed. that's fucked up.

First, welcome back, where have you been?I think of what you discuss here as the primary problem with the land tax -- you can't get there from here. Just switching to it now would be horribly unfair to the people who planned their life under the current rules.If a land tax had been in place all along, though, your family would've converted non-productive land into other types of assets all along. You may not have as much land, but you have other forms of wealth to compensate for it. Some people consider this the primary feature of the land tax, that people don't "hoard" land, giving everyone a chance to be a landowner. It brushes much too close to social engineering for me to like that argument strongly, but I can't completely dismiss it either.Like much of government, the hardest part is the transition to something sensible.

[brvheart]

Yeah, where have you been Shake?

[hblask]

brvheart, on Saturday, April 21st, 2012, 1:13 PM, said:

Yeah, where have you been Shake?

Is Shake the same as Sal? I don't follow who is who's alts very closely (as in "not at all"). I believe IE is someone's alt too, right?

[ShakeZuma]

shake is sal is izuma. we're all one great big unhappy family!

[SuitedAces21]

you weirdos and your multiple accounts.

[AmScray]

brvheart, on Friday, April 20th, 2012, 10:35 AM, said:

That screams, "I'm a bias left-wing piece of shit that doesn't know what the hell I'm talking about, but I'm going to take little jabs that are obviously not true so that other left wing people will rally behind my stupid article...."

This is why the issue of doing away with charitable deductions is becoming cause-celebre with the 'compassionate left' It tracks back to their hatred of religion. If that 35% were Enviromental/Animal welfare, they'd defend it as their most sacred cow. I mean, could it possibly be any more ****ing absurd to say "Doing away with the 1/1 tax incentives for charitable giving won't hurt charitable giving"?What elaborate academic theories and tortured logic were drawn upon to arrive at that turd of a 'theory' ?

[The Ocho]

Anyone who wants to get rid of the mortgage deduction is nuts.You think property values are depressed right now?

[akoff]

this whole thread is nuts, we have a spending problem not a tax problem.