forebill t1_it9lhuc wrote

Your explanations are useless. If I dig a ditch and receive $500.00, or I work 40 hours and receive $500.00 on a W2 there is NO difference. I've done $500.00 of economic activity. How that money is handled on either side of that exchange is all a matter of accounting, and policy.

I'm sorry you are too thick to see that really simple concept.


forebill t1_it9htbi wrote

You are using accounting terms trying to argue its not an accounting distinction.

Revenue is revenue. The only difference between corporate revenue and an employees revenue is the column it ends up in in the ledgers, kept by accountants so the taxes can be calculated properly. And that is all a matter of policy, enforced by accountants. It's all accounting.

But the flow of money is exactly the same in terms of economic impact. It still is an exchange.


forebill t1_it9fuu9 wrote

It's not at all. As an employee I'm investing my time, labor, and knowledge. It's all an accounting distinction. The economy is an aggregation of the exchange of money for the fruits of labor. All an entrepreneur does is convince employees that he can sell their labor better than they can. It's an American myth that it is a higher form of economic participation.

Revenue is revenue, the rest is all accounting.


forebill t1_it9anap wrote

Actually it's not. It's just an accounting distinction. You could just as easily say employee income is revenue gained from an investment of time and labor. You could tax a corporation's revenue, and choose not to tax an employee's income using the rationality that the money has already been taxed as corporate revenue.

All of these categories are just accounting terms. They are all the result of an exchange of time, material, labor, and knowledge for money. The distinctions only get important when you apply policy to them.


forebill t1_it93657 wrote

It makes a huge difference in cost. Without the incentive to own instead of rent massive amounts of wealth would be drained from the middle class. That would have massively terrible consequences.


forebill t1_it92smu wrote

>The subprime mortgage crisis didn't happen because the banks weren't profitable enough; the financial system was destabilized by banks turning out to be insolvent due to years of accumulating toxic assets, meaning a sudden loss of confidence in the system.

I'm pretty well aware of what happened. It's the consolidation of the banking system along with the removal of regulations on the types of investments they could be involved with that led to the crisis. (Along with lack of oversight.) If you know anything about how accounting works then you know that loans are capital for a bank. A bank cannot sell debt without income from existing loans. The toxic debt was a result of the subprime loans. The loans default and the bank can no longer service the debt right? You see you can stop condescending now.

>(and I'm very surprised to see corporate welfare being touted as a benefit to promote the mortgage interest tax deduction!).

My point is that I don't feel the "subsidy" exists solely for homeowners. I'm wasn't touting it, I was shining an alternative light upon it.

The fact remains that as a result of Trickle Down there are fewer and fewer pathways to building wealth other than real estate for those that start out life without any capital. The tax vantage of being able to deduct interest helps drive demand for home ownership. This demand increases the wealth of the owner. Removing that deduction would essentially be removing wealth from the middle class, and that is the ultimate negative impact of Supply Side or Trickle Down policy. History has demonstrated repeatedly that this is terrible policy.

Lastly, and back to my first point, a subsidy or "welfare" is a gift of money. Not taking as much of my income is not a gift. I've still done my part for the economy to have earned that money in the first place. The government is not printing money and awarding it to homeowners, it is simply not taking as much from the economy. You could just as easily say that not allowing rent to be deducted is a penalty for poor economic performance. What is the difference?


forebill t1_it8t7cm wrote

>, but I cannot deduct food, clothing, utilities, or most other expenses

Actually, the hurdle to itemization is getting past the standard deduction. A lot of those expenses CAN be deducted if they are related to a job, or maintenance of your home. So, if there is a dress standard at work such as business casual your clothing expenses for work can be deducted. If you go out of pocket for food while traveling for work . . . I need safety boots for work, and am required to do continuing education. So on and so forth.

If I make some inquiries about investments while on a trip, some of those trip expenses can be deducted. For instance, if I'm interested in real-estate investing in an area I travel to . . .

The interest on the mortgage get most people over that hurdle and opens up many more deductions most are not aware of because they fint make sense until the mortgage gets them there.

>Tax breaks are often used as subsidies.

But what is this subsidizing? It's much more beneficial to the financial industry than it is to individual home purchasers. If this "welfare" didn't exist and serious blow would be delivered to that sector of the economy. And we saw in 2008 how much Trickle Down has made the entire economy dependent upon that.


forebill t1_it80mk3 wrote

So, the break is on the interest of a mortgage. In order to qualify for a mortgage a person has to show income. The interest is paid from the income. That portion of the income is not taxed. How can a person receive state welfare from their own pot of money?

It's a huge incentive to purchase a home. This contributes to demand and helps keep prices up. This one of the few paths for middle class people to build wealth.

A business is not taxed on its expenses, only on profit. Does this make a business the beneficiary of a hidden welfare state?

A landlord is not only allowed to write off interest, but can also depreciate 1/27 the value of the improvements to a property. Does this put them in the hidden welfare caregory?

This is a stupid stupid stupid perspective. Also, it suspiciously ranks of supply-side idiotic rationality.