Big Tax Increases On The Way???

Discussion in 'Off-Topic' started by Glenn Holland, Oct 26, 2017.

  1. Glenn Holland

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    Dec 26, 2014
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    This is probably a political comment that will get the thread locked out, however I'll give it a try anyway

    On the San Francisco evening news, there was a story that the IRS is proposing to limit (or possibly eliminate) deductions for the interest on home mortgage, property taxes, IRAs and 401K contributions. The reporter mentioned that if the deduction for property taxes is eliminated, owners of the more expensive homes in San Francisco could wind up paying at least $25,000 and maybe as much as $50,000 per year in additional income taxes.

    This trial balloon has been floated before and it didn't go anywhere. However considering that the federal government is in such bad shape, I wouldn't be surprised if a diluted form of those tax increases gets sneaked through. Here in San Francisco and California, the government is in such bad shape that it's raising "fees" (because it can't raise taxes without a 2/3 vote) on everything except the sun coming up.
     
  2. dl324

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    Some or all of those changes are being considered in the GOP plan to redistribute wealth to the 0.1 percent.

    Part of the impact of removing deductions would be mitigated by increasing the standard deduction.

    The article was wrong to cite the IRS as the instigator. They just enforce the laws.
     
  3. Glenn Holland

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    The tax laws are actually written by lawyers for the big $$$ interests and their lobbyists have congress pass the legislation sight unseen.
     
  4. Papabravo

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    Nobody actually believes that their taxes will go down. Not only will your pockets get picked, but all the safety net programs will be defunded so the 0.1% can enjoy their Chardonay and Brie.
     
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  5. dl324

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    They're actually written by politicians who are paying back their rich donors. If the GOP doesn't pass a tax cut for the wealthy, they won't be able to raise enough money to get reelected. That's all they really care about.
     
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  6. Glenn Holland

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    Part of my hobby is doing research (FOIA for the federal government and "Sunshine Laws" for local and state) on what politicians are up to.

    I can tell you that practically all legislation is actually written by someone other than the politicians who pass it. Case in point: So called "Obama Care" is such a complicated document that no one but a team of expensive lawyers could have written it.
     
  7. JoeJester

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    And it was passed without being read.
     
  8. GopherT

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    Seems to be the standard method on healthcare bills from either party.
     
  9. JoeJester

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    Yeah, I remember Nancy saying you have to pass it to read it. I know a number of people were upset when they found out the tax return was the collection instrument for those who didn't have healthcare.
     
  10. wayneh

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    I think that kind of reporting is mostly intended to fire people up and sell ad space. The talks are ongoing and just because something shows up as a bullet item on the table for discussion doesn't mean it will come out the other end.

    But there is an 'eat the rich' sentiment in this country that has been carefully cultivated for decades. I've seen it parroted in this thread. You can't reduce the wealth of the rich without going after these things you've listed. To many Americans, people that can afford to live in San Francisco are "rich" and therefore deserve severe punishment in the form of wealth confiscation.

    The current taxation scheme is designed to prevent movement up in class. Income is the only mechanism by which the poor can accumulate wealth, and that's the behavior that we tax. We don't currently tax wealth itself, except indirectly in the form of property taxes, and those are avoidable to some degree.

    With such strong animosity towards the rich, it wouldn't surprise me at all if IRAs and 401Ks are eliminated for the one-percenters. They are too small a group to get a voice at the ballot box and the majority will rule. Their only recourse is to use their money for political purposes, which makes them even more hated.
     
  11. GopherT

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    A 0.1% annual tax on wealth would solve a lot of tax shortfall issues. Only a fraction of a financial adviser’s annual fees or inline with a low load mutual fund fees.
     
  12. wayneh

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    Yes, and you could even assign different rates to different forms of wealth. For instance, investment in the stock market or startup businesses could be taxed less than, say, gold or jewels or anything else that doesn't incur risk or create value.
     
  13. JoeJester

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    Are you talking about having a national property tax? Won't the states revolt because the feds are encroaching on one of their sources of income?

    I don't think gold or jewels are much risk, but there is certainly some. Both increase value as well. Today, gold is down ... according to https://www.jmbullion.com/charts/go...Q7N7ZREHFa2aYDg_2wIJsCoNsyRFCVTRoCgbMQAvD_BwE

    Overall, during the past 10 years, it has been up.

    Like all assets purchased for investments, the governments will get their money when the asset is sold.

    I guess the rich are already paying an additional 5 percent on assets sold.
     
  14. wayneh

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    [QUOTE="JoeJester, post: 1194341, member:]I don't think gold or jewels are much risk, but there is certainly some. Both increase value as well. Today, gold is down ... [/QUOTE]I was referring to business risk, alpha. The risk you bear when starting a new business, for instance. Gold toilets, jewel-encrusted cars and such may go up or down in market value (beta risk) but their value doesn’t depend much on their ‘success’.
     
  15. joeyd999

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    I'm going to resist the temptation to be drawn into this thread.

    You guys enjoy.
     
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  16. JoeJester

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    As their business grows so does their tax bill. Yes it's a big risk. If it wasn't there wouldn't be such a high failure rate.
     
  17. GopherT

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    A tax on asset transactions (gain or loss), could also be interesting. It would certainly change hi-speed trading.
     
  18. Glenn Holland

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    Here in the San Francisco area, the biggest wealth creator is not tech - it's being politically connected and getting rich off of government money.

    Obama, Hillary, and other big fish in the Democratic Party have visited San Francisco at least 27 times to attend fund raisers that were held in the home of some wealthy donor. Ron Conway is one of the biggest hogs when it comes to raking in government $$$ and it's going into useless ventures like Facebook, Google/Waymo's self driving car, Tesla, Solar City, government advertising, etc.

    I've made about 100 public records requests on government funded grants to big businesses in the S.F. area and I've got a cesspool full of info about who's slopping at the taxpayer trough big time.
     
  19. wayneh

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    Kind of like undoing the Internet so that transactions cost more, except the extra cost goes to taxes. It has merit. Anything to encourage longer run thinking could be helpful. Market efficiency and liquidity are good things but microsecond trading seems a bit unnecessary.

    I heard one improvement for the stock exchange would be as simple as batch trading every half second or so, to eliminate any market advantage arising from purely technical issues of bandwidth and proximity to the exchange. Everyone would be equal.
     
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  20. GopherT

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    The London Metals exchange accepts bid and offers for one session in the morning and one in the afternoon. Millions of kilos if Al, Steel and other metals in one session. If the buyer is outside of the sweet spot, they walk away empty handed. Likewise, the sellers walk away with their tons of steel if their price is too high. Wait another day.
     
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