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Kill the Farm Bill

Deacon923 said:
I get it, you don't want all those people who are getting the mortgage interest deduction to lose it. You have made that abundantly clear. I have already responded to that argument about four times on this thread, by stating that eliminating this deduction should be part of an overall simplification of the tax code that lowers rates and has little or no impact on the middle class, and has a phase out period.

As for your specific stats, they conveniently ignore the fact that 25% of the dollars spent on the deduction go to people earning over $200,000 per year, even though those people make up a very small portion of the people who get the deduction overall, and that 75% of the dollars spent go to people earning over $100,000 per year. Which are numbers I posted several pages ago.

I have not verified your numbers, and you did not provide a cite, but they appear to come from a bunch of real estate industry websites. Nonetheless I will assume for the sake of argument they are correct. It appears that these numbers apparently try to justify the deduction as something that assists "the middle class". Your post then proceeds to define the middle class as including people who make more than 100,000 per year up to $200,000 per year. $100,000 puts a taxpayer in the top 17%. $199,000 puts a taxpayer in the top 3%. So you are apparently arguing that the top 17%-3% are in the "middle class". Seems to me that the "middle class" ought to be, I don't know, maybe in the actual middle of the income distribution? The national median is $44,000, but $199,000 is still "middle class"? Source for all numbers in this paragraph: http://en.wikipedia.org/wiki/Household_income_in_the_United_States

So, we have a situation where 75% of the cash spent on the deduction goes to people in the top 17%, and a good chunk of that goes to people in the 3-5%. If this is supposed to be a deduction that helps the "middle class", it's missing the target.

Got some more numbers for me? Would you care to respond to the numbers I just gave you?
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We had a discussion about middle class a couple of weeks ago. Depending on the location, middle class does go up to $200,000 (NYC, for example).

In 2009, the top 10% paid 71% of FIT. If top 17% get 75% of the MID benefit and still pay a comparable % of the taxes, what's the problem?
 
WFU71 said:
We had a discussion about middle class a couple of weeks ago. Depending on the location, middle class does go up to $200,000 (NYC, for example).

In 2009, the top 10% paid 71% of FIT. If top 17% get 75% of the MID benefit and still pay a comparable % of the taxes, what's the problem?
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I guess opinions can differ, but personally I don't think it makes sense for the government to tax me at a high marginal rate and then offer to give it back to me if I behave in a way the government likes by buying a house with a mortgage. I get no benefit if I pay for my house in cash. I get no benefit if I choose to rent. I get less of a benefit if I buy a modest home within my means, and more of a benefit if I get leveraged to the hilt and build a McMansion. So, because of the way this money is filtered through the government, the government is subsidizing the mortgage lending industry, the homebuilding industry, the realtors, and all the other people that benefit from single family, highly leveraged housing, while also distorting the market for housing and creating sprawl. Why not lower the marginal rates and let me use my housing money as I see fit?
 
Another good post, 923. Let the mortgage lending industry, the homebuilding industry, the realtors, etc hand out their own cash back coupons to homeowners instead of letting the government do it.
 
PhDeac said:
Another good post, 923. Let the mortgage lending industry, the homebuilding industry, the realtors, etc hand out their own cash back coupons to homeowners instead of letting the government do it.
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I agree and we should let people pay for their own childcare and education instead of letting the government do it with tax credits. Let's simplify the tax code.
 
False equivalence there olddke. Our society is better when our workers don't have worry about childcare and are more educated. Our society isn't necessarily better because people take out long-term loans to "own" a home which is essentially renting a home from a bank supported by the federal government.
 
Deacon923 said:
I guess opinions can differ, but personally I don't think it makes sense for the government to tax me at a high marginal rate and then offer to give it back to me if I behave in a way the government likes by buying a house with a mortgage. I get no benefit if I pay for my house in cash. I get no benefit if I choose to rent. I get less of a benefit if I buy a modest home within my means, and more of a benefit if I get leveraged to the hilt and build a McMansion. So, because of the way this money is filtered through the government, the government is subsidizing the mortgage lending industry, the homebuilding industry, the realtors, and all the other people that benefit from single family, highly leveraged housing, while also distorting the market for housing and creating sprawl. Why not lower the marginal rates and let me use my housing money as I see fit?
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OK, I didn't see where you were talking about lowering the marginal rates.
 
Our society is better when our citizens live within their means. Don't do things you cannot afford to pay for - that includes having kids and going to college.
 
olddke said:
Our society is better when our citizens live within their means. Don't do things you cannot afford to pay for - that includes having kids and going to college.
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Only the rich should get an education, olddke? Then how do people move up socioeconomically?
 
PhDeac said:
Only the rich should get an education, olddke? Then how do people move up socioeconomically?
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Didn't say they shouldn't go to college. I said they should live within their means while doing so, my brother and I did as the first two in our family to go to college. My neighbor who lost his job 2 years ago and has a sick wife hasn't been able to pay for any of his sons college. The son had to go to the community college for two years and then to the state university about 50 miles away as a day student. He didn't go to his dream school but he is going. Pick a cheaper school, go part time and work, start at a community college and transfer. There are ways to achieve the goal for almost all if they will work hard and make smart decisions.

I am not opposed to financial aid and loans, even government subsidized loans. I am oppoosed to a bloated tax code with credits and deductions for every group with a lobbying arm.
 
So then rich people should get to go to better schools and get better jobs by virtue of the prestige of their schools simply because they can afford it?
 
not sure what you mean by living within your means but if it means not borrowing money then you are leaving a lot of future money on the table.

i went to grad school and took on a large amount of debt. i didnt live within my means but the npv of the project (grad school) was positive because the future value of the profits (my increased earnings potential) far outweighed the future value of the debt burden.
 
Deacon923 said:
I guess opinions can differ, but personally I don't think it makes sense for the government to tax me at a high marginal rate and then offer to give it back to me if I behave in a way the government likes by buying a house with a mortgage. I get no benefit if I pay for my house in cash. I get no benefit if I choose to rent. I get less of a benefit if I buy a modest home within my means, and more of a benefit if I get leveraged to the hilt and build a McMansion. So, because of the way this money is filtered through the government, the government is subsidizing the mortgage lending industry, the homebuilding industry, the realtors, and all the other people that benefit from single family, highly leveraged housing, while also distorting the market for housing and creating sprawl. Why not lower the marginal rates and let me use my housing money as I see fit?
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We're not that far apart on phasing out the MID. Basically it's timing and implementation.

If we lower the marginal rates, we'd have to get rid of lots of other deductions and see what the revenue models would look like.

If we lower the marginal rates, we should look at raising the rates on interest and eliminating the way people take pay from buyouts and other things which allow Buffet and Romney earn money.

Maybe get rid of all specialty rates.
 
PhDeac said:
So then rich people should get to go to better schools and get better jobs by virtue of the prestige of their schools simply because they can afford it?
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We cannot all go to Harvard, Yale or Princeton that is just a reality and those graduates will get better jobs by the virtue of the prestige of their schools. Do you think we should shut them down because everyone cannot attend there?

It is about having opportunities to improve your lot in life. You are living in a dream world if you want a society where hitting the birth lottery doesn't play into opportunities. I cannot think of a single society without some type of advantage to those lucky enough to be born into the wealthy or politically powerful groups. I think ours is about as good as you can find.
 
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Deacon923 said:
This is not true. Direct subsidies have been cut, but the funding has been redirected into new or expanded crop insurance entitlements.
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You have no idea what you are talking about. All direct payments and counter cyclical payments have been eliminated. The farm bill currently being debated is almost a trillion dollars over a 5 year period, and the anticipated tax payer cost for the insurance program is around 30-40b dollars (7-8b / year). This is in lieu of the current farm bill where farmers get direct payments from the government no matter what (just for farming) and counter cyclical payments on cotton if the price falls below a certain mark.

Know what you are talking about before venturing into this topic. The farm bill is around 200b per year and the only part that gets press is the 4% that goes to protecting the most important asset our country has to offer (a stable and CHEAP food supply). The farm bill is the last thing that needs to die. People generally have ZERO idea what they are talking about when this is concerned. This is evidenced by the board libs calling for the death of the farm bill when this would mean the death of food stamps.

Considering the change of course on this thread anyway, you should change the topic, but you should really change it just because it is such a stupid statement.

YAYYYY!! No more food stamps...no more nutrition programs for public schooling!!!! Woohoo! Great idea!
 
Wrangor said:
You have no idea what you are talking about. All direct payments and counter cyclical payments have been eliminated. The farm bill currently being debated is almost a trillion dollars over a 5 year period, and the anticipated tax payer cost for the insurance program is around 30-40b dollars (7-8b / year). This is in lieu of the current farm bill where farmers get direct payments from the government no matter what (just for farming) and counter cyclical payments on cotton if the price falls below a certain mark.

Know what you are talking about before venturing into this topic. The farm bill is around 200b per year and the only part that gets press is the 4% that goes to protecting the most important asset our country has to offer (a stable and CHEAP food supply). The farm bill is the last thing that needs to die. People generally have ZERO idea what they are talking about when this is concerned. This is evidenced by the board libs calling for the death of the farm bill when this would mean the death of food stamps.

Considering the change of course on this thread anyway, you should change the topic, but you should really change it just because it is such a stupid statement.

YAYYYY!! No more food stamps...no more nutrition programs for public schooling!!!! Woohoo! Great idea!
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First of all, you need to identify which bill you are talking about. The Democratic bill in the Senate, or the Republican bill in the House? Both of them contain cuts, the Democratic bill more on the subsidy side, and the Republican one more on the SNAP side. Do you support one of them, neither of them, or both?

Here is what appears to be a reasonably good summary of the Senate bill. http://www.nytimes.com/2012/06/22/u...farm-bill-but-tougher-road-seen-in-house.html

This is a $1 trillion bill and they managed to find a way to trim $23.6 billion around the edges. Most of the savings in the direct payment cuts went back into the insurance programs, just as I said. The bill apparently continues at least some direct payments and price supports. Sure, they've ended direct payments to farmers for not planting - but they've replaced it with insurance, which gives an incentive for farmers to plant on marginal land knowing that they'll get a check if the crop fails. Plus, the insurance system is set up so farmers get paid based on the market value of the commodity at the end of the growing season - which means that in a drought, when the crop fails and prices go up, farmers get a windfall. Why on earth are we signing up for such a negative feedback loop?

In the article I linked there is a nice section where all the special interest groups complain that their particular ox is being gored.
 
olddke said:
We cannot all go to Harvard, Yale or Princeton that is just a reality and those graduates will get better jobs by the virtue of the prestige of their schools. Do you think we should shut them down because everyone cannot attend there?

It is about having opportunities to improve your lot in life. You are living in a dream world if you want a society where hitting the birth lottery doesn't play into opportunities. I cannot think of a single society without some type of advantage to those lucky enough to be born into the wealthy or politically powerful groups. I think ours is about as good as you can find.
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I'm fine with the wealthy having advantages. It's a fact of life and it's always going to be that way. That really doesnt bother me.

I also agree that we "cannot all go to Harvard, Yale or Princeton." However, that should only be because of intelligence and not wealth. Education should be the one area where wealth (along with any other socioeconomic factor) should not come into play. Going to a more prestigous university should be based soley on one's intelligence and ability. It should be something that is earned. Plain and simple. If they cannot afford the tuition, then the school should provide grants for the less fortunate. There will still be plenty of students with means to pay tuition and plenty of wealthy alumni giving back. Give that poor student a chance, and he'll more likely be that grateful wealthy alumnus giving money back to the school that gave him a chance.
 
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