Waiting for Fitzgerald

[Secret_Agent_Man]

Originally posted by nononono
But why define "rich" by percentages of the population? Someone making $6 million a year isn't anything like someone making $200K. It should be about how far that money goes. If everyone made $5-6M a year and prices/COL were the same as now, then we'd all be rich; we wouldn't say the $5M people were poor.

Yes -- but when you're talking about "middle class" -- like Sebby was -- that concept necessarily applies to some group in the "middle" of the population (as Wonk was pointing out).

So, it is kind of nuts to say (as Sebby did) that folks in the top 2%-4% of income in the country are middle-class. But what he was really getting at was that they ain't "rich" in his view.

S_A_M

[bilmore]

Originally posted by taxwonk
I am most definitely not advocating . . . eliminating the deduction for state taxes.

Argh. Why not? State A taxes high, provides high services, by the choice of its voters, while State B has no state income tax, and few services. Why should fed tax policy favor State A's choice over State B's choice?

[Secret_Agent_Man]

Originally posted by bilmore
Argh. Why not? State A taxes high, provides high services, by the choice of its voters, while State B has no state income tax, and few services. Why should fed tax policy favor State A's choice over State B's choice?

Why would government want to discourage more government? Besides, taxes are good for you Hal. . . .

S_A_M

[nononono]

Originally posted by Secret_Agent_Man
Yes -- but when you're talking about "middle class" -- like Sebby was -- that concept necessarily applies to some group in the "middle" of the population (as Wonk was pointing out).

So, it is kind of nuts to say (as Sebby did) that folks in the top 2%-4% of income in the country are middle-class. But what he was really getting at was that they ain't "rich" in his view.

S_A_M

Yes, "middle" doesn't particularly work (though when was it last the true "middle"?). But that could be a matter of semantics. If "middle class" people can afford less than they used to, standard-of-living-wise, do we just define down what it means to be "middle class"? Or do we lift the dollar-numbers of "middle class" to reflect what it takes to attain what we've typically expected middle-classers (even, say on the upper end of middle-classers) to attain?

[Captain]

Originally posted by bilmore
Damn. Good point. Madison and Jefferson had to attack the unconstitutionality with the available tools, which was state nullification..

There was talk of judicial review at the time of adoption, but it wasn't clear how seriously anyone took it. State nullification was the same - much discussed, but somewhat timidly defended.

The point still is that those words on the page are quite difficult to interpret. Knowing what it means that Congress shall make no law infringing freedom of the press requires the definition of the very inscrutable terms "freedom", "press", and "infringe", as well as difficulties figuring out whether this is only a limitation on Congress (so the President by executive order can still declare martial law, suspend habeus corpus, and jail his opponents?) or all the ancilary parts of the government.

Getting into this discussion shows that there was also a need for a court to interpret the idea of judicial review, not clearly spelled out in the constitution, and proper redress for constitutional breaches.

This is why I view the idea that we should interpret the Constitution based on a "close reading" to be a bunch of hogwash.

To continue asking the conundrums, Mr. Bilmore, tell me, if we are going to just read the words in the constitution, does the Supreme Court even get to interpret the constitution? Remember, he decides that case by first deciding that he has no jurisdiction in the matter and then issuing this sweeping dictum that the Supreme Court is the ultimate arbiter of the constitution.

[taxwonk]

Originally posted by bilmore
Argh. Why not? State A taxes high, provides high services, by the choice of its voters, while State B has no state income tax, and few services. Why should fed tax policy favor State A's choice over State B's choice?

Because the principal of comity requires that one sovereign not impinge on another sovereign's more direct claim to taxes. In the foreign arena, this is accomplished through both tax treaties and the foreign tax credit. In the U.S., it's accomlished by the federal government not laying claim to tax on dollars already claimed as tax by the several States.

It's federalism at work. Federal tax policy doesn't favor one state's choices over another's. Federal tax policy recognizes that it cannot claim as taxable income money that has already been claimed as tax by the state. The Peoples' right to choose not to favor higher tax rates is preserved through their power to either vote or move.

[taxwonk]

Originally posted by nononono
Yes, "middle" doesn't particularly work (though when was it last the true "middle"?). But that could be a matter of semantics. If "middle class" people can afford less than they used to, standard-of-living-wise, do we just define down what it means to be "middle class"? Or do we lift the dollar-numbers of "middle class" to reflect what it takes to attain what we've typically expected middle-classers (even, say on the upper end of middle-classers) to attain?

Or, just for fun, we could look at what policies are creating this widening gulf between rich and poor, such that there is no real "middle class" any more.

[Captain]

Originally posted by Mmmm, Burger (C.J.)
This is as useful as deconstruction is to understanding english literature. Start with the premise one needs revenue for a government. So you have taxes. Figure out how best to raise those taxes so as not to distort free-market economic activity. Mix in the need for social goals, such as modest redistribution of income/wealth. You would not end up with a system as complex as ours in doing that.

I find it ironic that after this response you basically agree with me on the need to phase in any repeal of the mortgage interest deduction.

So we agree substantively, but our reasons differ.

[Mmmm, Burger (C.J.)]

Originally posted by taxwonk
Because the principal of comity requires that one sovereign not impinge on another sovereign's more direct claim to taxes. In the foreign arena, this is accomplished through both tax treaties and the foreign tax credit. In the U.S., it's accomlished by the federal government not laying claim to tax on dollars already claimed as tax by the several States.

It's federalism at work. Federal tax policy doesn't favor one state's choices over another's. Federal tax policy recognizes that it cannot claim as taxable income money that has already been claimed as tax by the state. The Peoples' right to choose not to favor higher tax rates is preserved through their power to either vote or move.

On para. 1, how is what you say consistent with the AMT, which removes the deduction for state income taxes?

on para. 2, it favors the choice between sales and income taxes (or did for years). And why can't it "double" tax--we do it at the federal level alone, and it's done at myriad other levels as well, including by the states, who tax income that's also taxed by the federal gov't. I don't recall a deduction for federal taxes on any state income tax form I've completed (for at least four states).

[Mmmm, Burger (C.J.)]

Originally posted by Captain
I find it ironic that after this response you basically agree with me on the need to phase in any repeal of the mortgage interest deduction.

So we agree substantively, but our reasons differ.

What's the irony, exactly? Moving from a bad policy to a good policy can have dislocative effects because there are still beneficiaries of a bad policy.

[Penske_Account]

Originally posted by taxwonk
Because the principal of comity requires that one sovereign not impinge on another sovereign's more direct claim to taxes. In the foreign arena, this is accomplished through both tax treaties and the foreign tax credit. In the U.S., it's accomlished by the federal government not laying claim to tax on dollars already claimed as tax by the several States.

It's federalism at work. Federal tax policy doesn't favor one state's choices over another's. Federal tax policy recognizes that it cannot claim as taxable income money that has already been claimed as tax by the state. The Peoples' right to choose not to favor higher tax rates is preserved through their power to either vote or move.

too bad the government wasn't as considerate about the double taxation of dividends or of the death tax, but I guess we have to expect politicians who believe in a culture of death to also want to tax that event. Circular.

[Captain]

Originally posted by Mmmm, Burger (C.J.)
What's the irony, exactly? Moving from a bad policy to a good policy can have dislocative effects because there are still beneficiaries of a bad policy.

(1) That was my point, that there is no baseline so you have to deal with whatever legacy there is;

(2) In the end, these are discussions of good policy versus bad policy, each of which have their impact; there is not a "neutral" policy or a no policy policy.

[Penske_Account]

Originally posted by taxwonk
Or, just for fun, we could look at what policies are creating this widening gulf between rich and poor, such that there is no real "middle class" any more.

the left wing's policy of plantation politics whereby they seek to maintain a permanent underclass of people who they have deluded into voting for them is one policy that prevents the poor from attaining middle class status. The policy of the left to expand the concept of "rich" to include "income rich who are really middle class" as well as "asset rich" artifically inflates "rich". Those two policies probably account for a great deal of the gulf you cite.

[baltassoc]

Originally posted by taxwonk
The proposal is to eliminate the deduction for new home mortgages and to phase out the deduction for existing mortgages over five years.

Sorry, catching up and not paying attention. This is the federal proposal, or some hypothetical proposal?

Is this the Balt Anal Rape Tax Reform Act of 2005? (BARTRA?)

(May well be both selling a house - no doubt for much less than I could if the interest were deductible - and buying a house - thereby eliminating my current deduction - very soon and not by choice).

[Mmmm, Burger (C.J.)]

Originally posted by baltassoc
very soon and not by choice).

is that how RT sees it?

BTW, she's got plenty of lube (i hear), so it shouldn't be too painful.

ETA: If you were paying attention, you would know that this was a recommendation from a panel, not passed legislation. If you're selling very soon, so what. If you're selling in five years, maybe it's a problem.