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Let's drug-test the rich before approving tax deductions, US congresswoman says

2&2 Slider To Leyritz said:
Because it isn't a reward, it is simply getting screwed less. There is a big difference. If two houses get robbed and one house has two TVs stolen while the other house has one TV stolen, did the guy with one stolen TV get a reward? Of course not. They both got screwed, one just got screwed less.
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it must be strange to go through life being so angry
 
Taxpayers are free to change their behavior to better position themselves to take advantage of current tax policy.
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Hey guys! Get rich and you can take advantage of the tax breaks as well!
 
WFFaithful said:
Hey guys! Get rich and you can take advantage of the tax breaks as well!
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Stupid poors aren't changing their behavior to better position themselves to take advantage of current tax policy.
 
WFFaithful said:
Hey guys! Get rich and you can take advantage of the tax breaks as well!
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Not really true. The richer you get, the fewer tax breaks you have access to (well, depends on if you define the capital gains tax as a tax break).*

That said, count me as a generally fiscally conservative person who would be quite happy with eliminating most deductions.

Incentivize saving for education and retirement (with contribution limits, not income limits) and leave it at that. Home ownership is not something we need to incentivize, it's engrained in the culture.

Although, there's an argument that having a MID actually makes renting vs owning more equitable. A landlord's interest should be deductible as a business expense.

*Note: this isn't rigorously researched so I might be wrong... but I would welcome someone to point out tax breaks that wealthy people (particularly high income earners) have access to that the general populace does not. The wealthy might be better positioned to use them though.
 
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WFU Lurker said:
Not really true. The richer you get, the fewer tax breaks you have access to (well, depends on if you define the capital gains tax as a tax break).*

That said, count me as a generally fiscally conservative person who would be quite happy with eliminating most deductions.

Incentivize saving for education and retirement (with contribution limits, not income limits) and leave it at that. Home ownership is not something we need to incentivize, it's engrained in the culture.

Although, there's an argument that having a MID actually makes renting vs owning more equitable. A landlord's interest should be deductible as a business expense.

*Note: this isn't rigorously researched so I might be wrong... but I would welcome someone to point out tax breaks that wealthy people (particularly high income earners) have access to that the general populace does not. The wealthy might be better positioned to use them though.
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that's like ridiculously easy to research. If you don't make much money, you don't get tax breaks. Here's just one example (again, picking on the MID is easy, there are many others)

4-4-13hous-f1.jpg
 
I don't think that's his argument. Everyone has access to the MID, but the higher income earners (who likely have higher mortgages) would obviously get larger deductions. Contrast that with other deductions like IRA contributions that phase out at certain income levels.
 
Deacon923 said:
If you're going to start equating democratically determined taxation with theft, I think we can safely say we've gone as far as we can with this discussion. I hope y'all have a good weekend. It's about to be beer o'clock.
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You knew that was coming. I'm curious how that type of conservative thinking considers the philosophy of a coupon. Can a coupon be a gift?

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06deacon said:
I don't think that's his argument. Everyone has access to the MID, but the higher income earners (who likely have higher mortgages) would obviously get larger deductions. Contrast that with other deductions like IRA contributions that phase out at certain income levels.
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High-income earners also have higher tax rates. Of course it doesn't benefit those with incomes below $30k... they don't really pay taxes in the first place. Can't really design around that. And it makes a discussion about how high income earners benefit so much from more tax deductions then low income earners a little logically tough. I mean what's the so what of that? Why shouldn't they benefit more? High income earners still pay much more in taxes than the low income earners. And, again, why shouldn't that be the case?

If I was trying to make this argument... I would go down the path of capital gains tax. And the rebuttal for that is that it helps level the playing field between equity and debt, although equity is still likely taxed more heavily.
 
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Deacon923 said:
that's like ridiculously easy to research. If you don't make much money, you don't get tax breaks. Here's just one example (again, picking on the MID is easy, there are many others)

4-4-13hous-f1.jpg
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So then you agree with this statement? "I would welcome someone to point out tax breaks that wealthy people (particularly high income earners) have access to that the general populace does not. The wealthy might be better positioned to use them though." Because, per your chart, it looks people with incomes as low as $20k benefit from the MID.
 
I am not sure what semantic argument you are trying to make. The benefits of most tax expenditures are received by the wealthy, because they have the highest incomes and because they can afford bigger houses etc (not to mention tax advice). All Americans"have access" to everything in the tax code, but the poor and middle class, overwhelmingly, do not take advantage of the benefits available.

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Deacon923 said:
I am not sure what semantic argument you are trying to make. The benefits of most tax expenditures are received by the wealthy, because they have the highest incomes and because they can afford bigger houses etc (not to mention tax advice). All Americans"have access" to everything in the tax code, but the poor and middle class, overwhelmingly, do not take advantage of the benefits available.

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Not true. High income Americans do not have access to most education related deductions or some retirement related deductions. That's my point. Access is a different question than decision to use or ability to use.

And, again, it is impossible and would be nonsensical to structure any kind of deduction from which the high income earners do not benefit more than low income earners. As simple as you have to pay taxes to benefit from a deduction.

Again, I am fine eliminating some deductions, but think there's no need to get excited with the rhetoric. And also think that the two most obvious examples (MID and capita gains) actually have a logical defense as being tax equalizing due to the deductibility of debt expense on the corporate side.
 
WFU Lurker said:
Not true. High income Americans do not have access to most education related deductions or some retirement related deductions. That's my point. Access is a different question than decision to use or ability to use.

And, again, it is impossible and would be nonsensical to structure any kind of deduction from which the high income earners do not benefit more than low income earners. As simple as you have to pay taxes to benefit from a deduction.

Again, I am fine eliminating some deductions, but think there's no need to get excited with the rhetoric. And also think that the two most obvious examples (MID and capita gains) actually have a logical defense as being tax equalizing due to the deductibility of debt expense on the corporate side.
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I'm not sure how committed we are to specifically talking about deductions and not tax expenditures generally, but you can make a given tax expenditure equal for high- and low-income folks by replacing a deduction with a x% refundable tax credit. Pretty simple IMO.
 
WFFaithful said:
Hey guys! Get rich and you can take advantage of the tax breaks as well!
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Why do you have to talk about getting rich? the example people were discussing was the mortgage tax deduction. Lot's of lower middle class and middle class folks have houses and get the deduction. Others choose to rent, often paying more in rent than they would in a mortgage. I know there are other issues around buying a house, like downpayment, maintenance, etc. - but, if those people want to take advantage of the mortgage deduction they can do so - without having to get 'rich'.

And, as others have pointed out, many of the most basic tax deductions are phased out based on income - most long before you reach an income level that most people would call 'rich'.
 
You are forgetting that lots of rich people don't get paid salaries. They get paid as dividends and other ways to avoid paying the progressive rate. Everyone over about $110,000 get a tax break those make under that don't get by the capping of Social Security Tax which shouldn't happen and should apply to all earnings.
 
scooter84 said:
Why do you have to talk about getting rich? the example people were discussing was the mortgage tax deduction. Lot's of lower middle class and middle class folks have houses and get the deduction. Others choose to rent, often paying more in rent than they would in a mortgage. I know there are other issues around buying a house, like downpayment, maintenance, etc. - but, if those people want to take advantage of the mortgage deduction they can do so - without having to get 'rich'.

And, as others have pointed out, many of the most basic tax deductions are phased out based on income - most long before you reach an income level that most people would call 'rich'.
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Only 30% of filers itemized in 2010. http://www.taxpolicycenter.org/publications/who-itemizes-deductions/full
 
RJKarl said:
You are forgetting that lots of rich people don't get paid salaries. They get paid as dividends and other ways to avoid paying the progressive rate. Everyone over about $110,000 get a tax break those make under that don't get by the capping of Social Security Tax which shouldn't happen and should apply to all earnings.
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What percentage of people get no salary and only dividends? I would guess it is minuscule. Why are we talking about them?

Social Security tax is a different issue. That money is just supposed to be set aside to be given back to the taxpayer later and has nothing to do with funding the government. That is not technically a tax break - it just means less money going in to fund an account that will be coming back to you later.
 
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