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CBO - Ryan Plan will cost seniors $6000+/year

Corporations are paying plenty of taxes. Don't believe that populist news stories.
 
ChrisL68 said:
Corporations are paying plenty of taxes. Don't believe that populist news stories.
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It's true that some corporations play plenty of taxes, effective tax rate of 27 percent or so across the board, but the big issue has always been the fact that it is in a multinational's best interest to defer repatriating foreign earnings to avoid the unreasonably high taxes (vis-a-vis other countries).

So as a result, not only does the US lose out on some additional tax revenue, but the simple fact is also that the money invested or held in foreign jurisdictions are dollars that are not invested in the US (which in turn would create jobs, etc.)

That said, there are certainly some corporations that take advantage of offshoring a lot more than others, so they essentially can lower their effective tax rate into the single digits via the foreign tax credit.
 
WPDeac said:
It's true that some corporations play plenty of taxes, effective tax rate of 27 percent or so across the board, but the big issue has always been the fact that it is in a multinational's best interest to defer repatriating foreign earnings to avoid the unreasonably high taxes (vis-a-vis other countries).

So as a result, not only does the US lose out on some additional tax revenue, but the simple fact is also that the money invested or held in foreign jurisdictions are dollars that are not invested in the US (which in turn would create jobs, etc.)

That said, there are certainly some corporations that take advantage of offshoring a lot more than others, so they essentially can lower their effective tax rate into the single digits via the foreign tax credit.
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The foreign tax credit is fair. If you are earning money overseas and paying overseas tax on it, and then you subject that income to us taxation, you should get a credit for the foreign taxes up to the US rate, or else that money would be double taxed.

I agree that we should restructure the US tax code for multis. I would tax any company that does business in the US at the US tax rate for worldwide income and give a foreign tax credit up to the US rate. And then lower the US rate to a competitive level.

It would help US based companies vis a vis foreign companies selling into the US and would eliminate the incentive to not repatriate.
 
Actually , when I think about it from the top down I don't feel so badly about Seniors losing some benefits. They've benefited mightily from gov't overspending for decades, and now it's time to pay when government must reign in their spending.

Note: I still feel a bit badly, just not nearly as badly.
 
RJKarl said:
About 20% of our economy is based on real estate. Doing this would kill the RE market for several years to come.

Even more people would be upside down in their homes. People use their equity for everything from paying bills to college tuition to using as collateral to start a business or guarantee a business loan.

It will cost jobs on many, many levels. Everyone from tim ber to truck driveers to bankers and even at Home Depot will be at risk.
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I'm still not getting it. I understand how a bunch of money moves around due to having an over-inflated home value. But to me, having goods (homes included) valued at their true value and not a value propped up by a government subsidy would be wonderful.

Also, I'd like to add that home ownership isn't for everyone. In fact, the government has done us a disservice by making it so attractive.
 
WPDeac said:
It's true that some corporations play plenty of taxes, effective tax rate of 27 percent or so across the board, but the big issue has always been the fact that it is in a multinational's best interest to defer repatriating foreign earnings to avoid the unreasonably high taxes (vis-a-vis other countries).

So as a result, not only does the US lose out on some additional tax revenue, but the simple fact is also that the money invested or held in foreign jurisdictions are dollars that are not invested in the US (which in turn would create jobs, etc.)

That said, there are certainly some corporations that take advantage of offshoring a lot more than others, so they essentially can lower their effective tax rate into the single digits via the foreign tax credit.
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I worked in corporate finance for years. Many corporations have shell subsidiaries set up to do nothing but take advantage of the tax laws. One mining company was "factoring" their receivables to an Irish subsidiary for nothing more than a tax benefit. The company had no other operations in Ireland. Corporations should have to prove that they have a nexus in any country where they have a subsidiary.
 
WhatUTalkinBout Willis said:
I'm still not getting it. I understand how a bunch of money moves around due to having an over-inflated home value. But to me, having goods (homes included) valued at their true value and not a value propped up by a government subsidy would be wonderful.

Also, I'd like to add that home ownership isn't for everyone. In fact, the government has done us a disservice by making it so attractive.
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There will be a several year period where tens of millions of people cannot move due to being upside down in their homes if we took away the interest deduction.

It will also end refinancing for a similar period which will further slow the economy. People won't have the money to home improvements.

If this concept is ever to be seriously thought about, it should be when we are at 4-5% unemployment and can phased in via steps or something similar.

Even at that rate of unemployment doing it all at one time will cost jobs.
 
RJ, that doesn't make any sense. If you are saying that the tax deduction affects people's ability to make their payments such that they would be underwater without it, are you asserting that there is a large portion of the population that underpays their mortgage on a monthly basis, only to make up the difference when they get a tax refund every April or May? I've never heard of anyone setting up their payments that way.
 
Johnny Utah said:
RJ, that doesn't make any sense. If you are saying that the tax deduction affects people's ability to make their payments such that they would be underwater without it, are you asserting that there is a large portion of the population that underpays their mortgage on a monthly basis, only to make up the difference when they get a tax refund every April or May? I've never heard of anyone setting up their payments that way.
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I never said anything like what posted I'll break it down for you:

1. If we eliminate the tax deuction for owning a home, the value of homes will plummet as people will not be able to afford homes at the prices they are today.

2. If we eliminate the tax deduction, many millions of people will owe more on their homes than they owe. This will prevent them from moving for years. The sheer volume of such predicaments will crush the sales of homes.

3. Without the equity or the tax credit for mortgages, people wil not be able to do home improvements. This will cost countless jobs in many verticals of business.

4. If we do this at one time during very high unemployment, it will create a very long recession if not a depression.
 
RJKarl said:
There will be a several year period where tens of millions of people cannot move due to being upside down in their homes if we took away the interest deduction.

It will also end refinancing for a similar period which will further slow the economy. People won't have the money to home improvements.

If this concept is ever to be seriously thought about, it should be when we are at 4-5% unemployment and can phased in via steps or something similar.

Even at that rate of unemployment doing it all at one time will cost jobs.
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Sounds to me like the right thing to do would be phase it over 10 years and give a 3 year heads up. A 10% reduction in the interest deduction annually until it's done beginning in 2015 would do nicely, IMO. Soften the blow to everyone.
 
None of the arguments hold water if you means test and then phase out the mortgage deduction.
 
WhatUTalkinBout Willis said:
Sounds to me like the right thing to do would be phase it over 10 years and give a 3 year heads up. A 10% reduction in the interest deduction annually until it's done beginning in 2015 would do nicely, IMO. Soften the blow to everyone.
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Why not just grandfather and cap it for current homeowners and take it away for anybody who buys a home after December 31, 2011? The cap wouldn't affect anybody who needs it and it's much simpler than phasing it in.

As far as corporate tax, I know nothing about it, but it seems like a flat fee makes sense. Find some way to classify corporations and charge them upfront for the cost of doing business in the US. I know it's much more complicated than that but it seems like we just need to make it more profitable to pay taxes in the US than avoid paying taxes.
 
The grandfarthering would lead to a bunker mentality, with folks hunerking down where they live.

A phasing out, 5-10 percent a year would not have that shock but would still lead to long term revenue gains.
 
If there was a bunker mentality, it would be proceeded by a spike in homebuying to beat the deadline. The cap would make it so there wasn't as much advantage to a bunker mentality. The fact that so many people are underwater is bunker enough. I don't think this would make it significantly worse.
 
Spike already happened with the tax credit for first time home buyers.

Phase it out based on income and interest payments. You could eliminate it in 10 years without damaging the economy.
 
Here's something from today about the average cost of home in the US:

"And the healthiest real-estate market in the U.S. is … North Dakota! “There’s a very low cost of ownership there and a very low unemployment rate, which is a huge factor for them,” Findlay said. They have a low cost of living, the unemployment rate is less than half the national average at just 3.7% and debt to income is the one of the best on the list at just 14%. Real estate prices are pretty inexpensive here, with the average home price at $173,000, compared to the national average of $298,000."
 
RJKarl said:
Here's something from today about the average cost of home in the US:

"And the healthiest real-estate market in the U.S. is … North Dakota! “There’s a very low cost of ownership there and a very low unemployment rate, which is a huge factor for them,” Findlay said. They have a low cost of living, the unemployment rate is less than half the national average at just 3.7% and debt to income is the one of the best on the list at just 14%. Real estate prices are pretty inexpensive here, with the average home price at $173,000, compared to the national average of $298,000."
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That is only half the story on North Dakota. I think this is a relevant graph:

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And this is a relevant statement: North Dakota Sucks It.
 
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