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November 15, 2012

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Who would you define as "the rich" for the purpose of eliminating the "big three" deductions? Or eliminate all of them, period?

A big motivator for me to refi my mortgage was the probable future loss of the mortgage interest deduction. Of course, the "savings" gained by the reduction of the monthly payment will no doubt be eaten up by increased taxes.

Getting rid of the state income tax deduction is a good one for the GOP. Another one would be to limit the mortgage interest deduction to the first, say, $250k in debt from the current first $1 million. Those two combined would jack up the tax bill for wealthy New York and San Francisco Democrats considerably. And the new Obamacare surcharge would sting some too.

But a simpler and maybe smarter approach for the GOP would be to stop defending the Bush tax rates on the top 2% and say if we're going to go back to Clinton rates for the top 2%, let's go back to the Clinton rates for everyone. Then everyone would see a tax increase. And with the Obamacare surcharge, the top marginal federal income tax rate would be 43%.

Then the GOP would get more traction with their tax cutting agenda.

"The states with highest taxes are blue states like New York and California, so removing the deduction for state taxes would punish high-tax blue states."

I agree with this and capping charitable donations to charities that don't involve medical or scientific research.

We also should be lobbying state legislators to start cutting off the flow of money to the the liberal non-STEM and non-business departments.

Drive the SWPLs out of their Ivory Tower cocoon and into the private sector where they can feel the sting of their own disastrous economic policies, instead of employing them in think tanks, colleges, and regulatory agencies where they profit from destroying the private sector.

On CNBC this morning, George Bush III (son of Jeb) said that some liberal think tank has determined that capping deductions at $50k will raise $800 billion over 10 years, which is half of the $1.6B that Obama wants to raise. Seems like a no-brainer to me, although I would be more political and get rid of the deductions for state and local taxes and mortgage interest, both of which benefit high tax, high cost blue states far more than red states.

If we can't get rid of the mortgage deduction, it should at least be limited to one home and capped at a $500,000 mortgage, which would help the middle class and stick it to SWPLs.

[HS: The 50K cap gets rid of all the deductions in one swoop, so that may be better than arguing about specific deductions, each which has some big business lobbying behind.]

Sigma, for a middle class tax reform, what do you think of cutting the payroll tax in half and funding 100% of the cut through a national sales tax?

This tax change would benefit middle class workers who pay a bigger % of their salary through payroll taxes and who keep spending at a judicious level and shift taxation from worker productivity to consumption.

[HS: I'm not really in favor of a such a thing. I'd prefer to work on reforming the income tax and making it better, rather than introducing a whole new tax--unless it can be in lieu of state sales taxes which are a huge pain in the ass for national retailers.]

My understanding is that taxes are going to have to go up for everyone. Even if we took 100% of income over $250,000 that wouldnt cover the deficit.

I think the GOP focus should be on alternate taxes that tax things we want less of (trade tariffs, financial transaction taxes, pollution taxes, etc) and reducing cost of living by tackling education, health, and housings costs. All three of those things are handled in incredibly stupid ways and could cost dramatically less. That is something that could have a far better impact on middle class finances that any conceivable tax break.

The GOP better hold firm on taxes (do nothing and let the temporary tax breaks expire). Better this than agreeing explicitly to some sort of tax increase.

"While poor people give charity to their church, rich people give charity to liberal-controlled organizations like universities and foundations."

Would you make an exception for charitable deductions to hospitals and health research organizations? People like Sandy Weill give huge (as in $175M) gifts to local hospitals. And the NYU Medical Center is now named "Langone" and "Tisch" for obvious reasons.

Also, a lot of contributions to charity are of products and services at inflated values (e.g., inventory a small business owner can't sell) - in this way, people actually make money donating to charity through the tax savings.

What would you consider a big-ass mansion? I live in what you called the trashiest place in the US, and my home cost 700k. And don't people pay upward to $1 million for 2 BR ranch homes in Silicon Valley?

"and reducing cost of living by tackling education, health, and housings costs. All three of those things are handled in incredibly stupid ways and could cost dramatically less."

I like the idea of reducing the middle class' cost of living. The rising cost of living explains why Republican economic policies are losing appeal to the middle class: The middle class cares less about free market economics because the cost of living is eating up more of their disposable income even in good economic times.

I think we can kill two birds with one stone by pledging to reduce the cost of college and make college degrees more valuable to employers with specialized training.

By eliminating the gened we would also be cutting off funding for the leftist liberal arts departments because most of the funding for the liberal arts comes from gened classes filled with non-liberal arts majors because there are relatively few libarts majors.

Eliminating the gened also helps fight dysgenics because female college graduates would graduate two years earlier if they could bypass the liberal arts and start forming families earlier.

Ramesh: Overemphasizing the Liberal Arts

http://thedartmouth.com/2012/10/25/opinion/ramesh

While most countries begin specialization early in high school, the United States has a unique tradition in liberal arts education. In India, students begin to specialize in their “plus two” years, the equivalent of their junior and senior years of high school. Based on the track they choose, they apply to colleges for a specific program. Computer science majors would not take any literature courses, and business students would not take biology classes. Most proponents of the liberal arts argue that a well-rounded education provides broader tools to tackle a wide range of problems, and, presumably, such personal development also plays a crucial role in happiness.

However, from an employment perspective, a liberal arts education is disastrous. With 53 percent of all college graduates under the age of 25 unemployed or severely underemployed, this economy does not offer the luxury of postponing specialization until graduate school. According to Payscale, the top 10 schools with the best starting salaries were all technical schools, with the Massachusetts Institute of Technology, California Institute of Technology and Loma Linda University topping the list. Many students know from the beginning that they want to pursue a field in a hard science, and for them the “liberal arts” education is nothing but an obstacle. As these fields have shown, solving specialized, narrow problems is incredibly valuable, if not more valuable than solving broad, wide-ranging problems.

snip

I’m not espousing the superiority of hard sciences over all other fields of study, nor am I claiming that the humanities are not worthy of study. Rather, if a student wishes to pursue the humanities or the sciences, then let him do so without mandates. Not everyone comes to college with the hope of earning an enormous starting salary, and that is perfectly understandable. Those who believe in a broad-based approach to education will continue to take classes from a variety of departments, but those who want to utilize their four years in specialization and honing their talents in a field should be offered the same opportunity.

http://www.theatlantic.com/business/archive/2012/11/should-colleges-force-liberal-arts-students-to-pay-more/264417/

Down in Florida, a task force commissioned by Governor Rick Scott is putting the finishing touches on a proposal that would allow the state's public universities to start charging undergraduates different tuition rates depending on their major. Students would get discounts for studying topics thought to be in high demand among Florida employers. Those would likely include science, technology, engineering, and math (aka, the STEM fields), among others.

"And rich people don’t need a special tax break to subsidize their big-ass mansion."

The home mortgage deduction phases out at loan levels well below what would pay for "a big ass mansion" - at least in any coastal metropolitan area. I'm not sure what it would buy in Kearney, Nebraska, I guess.

"What would you consider a big-ass mansion? I live in what you called the trashiest place in the US, and my home cost 700k. And don't people pay upward to $1 million for 2 BR ranch homes in Silicon Valley?"

High property prices in Blue states means Democrats get spanked the hardest if the mortgage interest deduction goes away. That is a GOOD thing! They voted for higher taxes, let 'em have it!

All deductions should be eliminated, regardless of income. All "tax credits" should be eliminated too, but nobody listens to my ideas.

Republicans should pretend that Obama got 100% of the vote, and simply do what the Democrats want. No arguments, no compromises - Republicans should surrender. Let this country go as far to the left as the Democrats want. When a few Democrats start getting uneasy, we will have found a new political center.

TUJ,

If you want to make college more affordable, there's no need to dictate minutia such as gen-ed requirements. Just phase out the federal loans, loan guarantees, and grants. Colleges will adapt to the new financial reality on their own.

Love all these ideas. I sure hope some Republican congresscritters, somewhere, can think as clearly as this. PUNISH THE DEMS. Analyze things from that point of view. Is it really so hard? The Republicans are all caught up on general principals. The Dems are much better at fighting dirty, as far as I can see.

I can't help but think that "tax the rich" is just code for "tax whitey." There is no tax plan created by Democrats that does not have an implicit anti-white agenda built into it. I guarantee that no tax plan could be crafted in a way that really hurts the blue states more than it tarnishes the Republicans. Besides, the Democrats can always deliver a higher tax hikes than the Republicans.

Republicans should focus on educational reforms. The goal is to peel away as many whites as possible and a surefire way of doing that is young people. As TUJ note, price controls on university tuition, eliminating student loan debt and gened requirements is a far more effective way of shafting leftist institutions and throwing gibsmedat at the right people.

Taxes can easily backfire. Remember "no nude Texans?"

[HS: The vast majority of white people make less than $250k, and the white who make more than $250K don't give a crap about middle-class or prole whites.]

"But a simpler and maybe smarter approach for the GOP would be to stop defending the Bush tax rates on the top 2% and say if we're going to go back to Clinton rates for the top 2%, let's go back to the Clinton rates for everyone." -DaveinHackensack

I think GOP politicians have already been talking like this. Problem is Dems can say "we want to lower taxes on middle class" which puts GOP in the very awkward and hypocritical situation of refusing to lower taxes. This hardball/brinksmanship is similar to what transpired Jul-Aug 2011 with the needlessly manufactured Debt Ceiling Crisis and it didn't go over well with the general public.

Bottom line: pandering to rich does not work in the present economic milieu. Voters who are conservative-leaning but not Kool-Aid-drinking ideologues don't like it, as witnessed nine days ago.

Hmm.. isn't a common meme here at Half Sigma that all racial groups except whites just care about their own racial group's best interest?

Not interested in the common good of the nation as a whole, only interested in their own race?

Meme is that only whites sacrifice the interests of their own race for a larger cause?

I seem to remember hearing that over and over

Yet clearly Asians are sacrificing their own racial interests by voting for affirmative action. As everyone knows, affirmative action mostly takes spaces away from asians

in fact, in every good college that abolishes affirmative action, number of asians goes way up.

Look up the figures

Asians are voting for the greater good, against the interests of their own race in college admissions.

Half Sigma, even in Manhattan.... hunter high school and bronx science are overwhelmingly asian just cause affirmative action is banned for them.

the minute aa comes in, the asians will get many of their spaces taken away.

despite this, asians vote overwhelmingly for the affirmative action party

"The GOP better hold firm on taxes (do nothing and let the temporary tax breaks expire). Better this than agreeing explicitly to some sort of tax increase."


I think trying to hold the line on tax cuts has backfired on the GOP. They bitch about taxes, but taxes are pretty low right now due to several GOP tax cuts over the past couple of years, going back to Reagan. So as a result, taxes just don't mean that much to the average middle class voter.

Three GOP senators sold their votes for the stimulus to fix the AMT. Since that effects the upper middle class, liberal professionals got their vanity vote for Obama AND had the GOP save them from high taxes.

I say let the dems really stick it to us on taxes like they've been dreaming of for years. I think then, people will remember how the hated Republicans got in office in the first place.

If you get rid of deductions, or limit deductions to $50K, that will kill muni bonds. Which is a good thing, because why should munis get tax-free interest? However, people that own muni bonds will simply shift into high grade corporate and treasury bonds. And munis will have to pay more interest. So less distortion.

I agree, limit deductions as those primarily benefit blue states.

Wencil,

Asians all live on the coast in heavily blue state and industries. It makes sense they would adopt liberal beliefs in order to climb the social ladder.

Also, democrats are the pro immigration party so that makes it easier for them to bring their family over.

Moreover, Asians don't want whites forming too strong a racial conscious. Having yourself capped at 20% of HYPS because of AA sucks, but having yourself capped at 0% if racism comes back would suck even more. I think a lot of Asians, especially those already in positions of authority, see AA as the cost of doing business.

Hey Wencil

Betas are definitively irrational.

Raise revenue? How about stop spending money on bullshit, especially NAMs. The fucking Fed has enough $.

[HS: Yeah, it's too bad Republicans didn't do anything about spending when they controlled the presidency, senate and house. Too late now.]

"HS: The vast majority of white people make less than $250k, and the white who make more than $250K don't give a crap about middle-class or prole whites."

I don't think that's correct. It may be majority, even overwhelmingly liberal, but there's still a not at all insignificant number of "our people" up in that income range. Remember also the top bracket is only 170k for a single filer. Biglaw attorneys, consultants, software developers, defense contractor workers (TS/SCI), engineers a few years in. That's a lot of conservative/libertarian white men. But you are right to the extent that very, very few (maybe none) of these high income whites would ever conceptualize "I care about working class/prole whites".

Ending the deduction for state and local taxes is a genius idea, and the argument is simple: Why should high tax states be allowed to essentially steal revenue from the Federal Government? This is an outrage! Meanwhile, you get people in high tax states to really start to feel the sting of high Federal tax rates. This really should be at the front of the line for deductions that need to go.

i agree with asdf

asians are not worried about losing spots to blacks/browns in the short term. as a member of the diversity alliance (tm) they get social standing benefits and a deadly weapon against whites who are their real competition. they can use ethnic nepotism too.

[HS: Yeah, it's too bad Republicans didn't do anything about spending when they controlled the presidency, senate and house. Too late now.]

If only the GOP had behaved more niggardly.

Over in opposite world, Derek Hunter at the Atlantic says Romney's honesty about taxes is a losing strategy: http://www.theatlantic.com/business/archive/2012/11/mitt-romneys-america-why-makers-gifts-and-takers-is-a-losing-vision/265324/

And most of the commenters agree with him.

"as a member of the diversity alliance (tm) they get social standing benefits and a deadly weapon against whites who are their real competition"

Far as I can tell, the most important effect on Asians is that they get shut out of university slots -- black/brown slots at universities come at the expense of yellow, not white. Therefore the diversity alliance is not a yellow weapon against whites; it is, if anything, a white weapon against yellow (it shuts out more dangerous competitors for whites).

"Biglaw attorneys, consultants, software developers, defense contractor workers (TS/SCI), engineers a few years in. That's a lot of conservative/libertarian white men."

I am in one of those groups and married to someone in another. There are all too many Democrats in the groups I know something about. Stick it to 'em! I will have to take one for the team when you do.

@DaveinHackensack: Romney's comments only makse sense if you assume that we have a perfect economy and a totally rational pre tax income distribution. We dont. Why do you think wealthy people and large corporations spend so much money trying to influence policy?

If the fund loses money and the manager doesn't get his 20% does he lose money? No. Do his investors? Yes.

Is there any justification for the carried interest loophole other than the usual bs about job creators?

The UK has the same loophole.

Dividends should be tax free or have a very low rate if corporate taxes haven't been avoided/evaded (which they usually are). I understand that. Why should this also apply to capital gains?

"If you want to make college more affordable, there's no need to dictate minutia such as gen-ed requirements. Just phase out the federal loans, loan guarantees, and grants. Colleges will adapt to the new financial reality on their own."

Gened requirements can be regulated at the state level.

As for loans, federal loans are middle class standard of living subsidies. No way they can be phased out politically. Since the federal loan system isn't going anywhere anytime soon we might as well use regulatory power to defund leftist college non-STEM and non-business departments under the guise of making college more affordable for the middle class.

The Asians are here instead of in Asia because of the non-White party. It'd be pretty silly of them to go against it. Not to mention Asians are hyoooge beneficiaries of minority set-asides for gov't contracting, SBA loans/grants, etc. They would lose out in either a race-blind or pro-White situation, so that bunch of non-Whites supports the non-White party like all the others.

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