Krugman heralds start of next depression

[briansd1]

Excellent point you’ve brought up.

[quote=ucodegen] wealthy people were incorporating the property within a business shell and then could ‘expense’ the interest (oversimplified explanation). If we dis-allow mortgage interest deduction, we also need to look at dis-allowing other forms of interest deduction.[/quote]

Interest paid on borrowed funds is always a legitimate business expense.

We just need to close loopholes to prevent prevent the “expensing” of private corporate residences/retreats, private cars, and the like.

[ucodegen]

We just need to close loopholes to prevent prevent the “expensing” of private corporate residences/retreats, private cars, and the like.

Thats harder than it looks.

A CEO could use a mechanism where the company pays the mortgage on a property with a lease-back to himself. The company then covers the cost of the lease back as part of the pay package … and covers the tax as well. The company can then use the interest deduction. The company could also buy the property with cash, but take out a loan on other business property.. and deduct that interest..

The more convoluted you make the tax system, the more the wealthy profit.. they can have full-time people dedicated to working out the nuances in the code, finding holes that the authors didn’t intend, or pushing congressional members to put exceptions in the code.

[ucodegen]

We just need to close loopholes to prevent prevent the “expensing” of private corporate residences/retreats, private cars, and the like.

Thats harder than it looks.

A CEO could use a mechanism where the company pays the mortgage on a property with a lease-back to himself. The company then covers the cost of the lease back as part of the pay package … and covers the tax as well. The company can then use the interest deduction. The company could also buy the property with cash, but take out a loan on other business property.. and deduct that interest..

The more convoluted you make the tax system, the more the wealthy profit.. they can have full-time people dedicated to working out the nuances in the code, finding holes that the authors didn’t intend, or pushing congressional members to put exceptions in the code.

[ucodegen]

We just need to close loopholes to prevent prevent the “expensing” of private corporate residences/retreats, private cars, and the like.

Thats harder than it looks.

A CEO could use a mechanism where the company pays the mortgage on a property with a lease-back to himself. The company then covers the cost of the lease back as part of the pay package … and covers the tax as well. The company can then use the interest deduction. The company could also buy the property with cash, but take out a loan on other business property.. and deduct that interest..

The more convoluted you make the tax system, the more the wealthy profit.. they can have full-time people dedicated to working out the nuances in the code, finding holes that the authors didn’t intend, or pushing congressional members to put exceptions in the code.

[ucodegen]

We just need to close loopholes to prevent prevent the “expensing” of private corporate residences/retreats, private cars, and the like.

Thats harder than it looks.

A CEO could use a mechanism where the company pays the mortgage on a property with a lease-back to himself. The company then covers the cost of the lease back as part of the pay package … and covers the tax as well. The company can then use the interest deduction. The company could also buy the property with cash, but take out a loan on other business property.. and deduct that interest..

The more convoluted you make the tax system, the more the wealthy profit.. they can have full-time people dedicated to working out the nuances in the code, finding holes that the authors didn’t intend, or pushing congressional members to put exceptions in the code.

[ucodegen]

We just need to close loopholes to prevent prevent the “expensing” of private corporate residences/retreats, private cars, and the like.

Thats harder than it looks.

A CEO could use a mechanism where the company pays the mortgage on a property with a lease-back to himself. The company then covers the cost of the lease back as part of the pay package … and covers the tax as well. The company can then use the interest deduction. The company could also buy the property with cash, but take out a loan on other business property.. and deduct that interest..

The more convoluted you make the tax system, the more the wealthy profit.. they can have full-time people dedicated to working out the nuances in the code, finding holes that the authors didn’t intend, or pushing congressional members to put exceptions in the code.

[briansd1]

[quote=ucodegen]

The more convoluted you make the tax system, the more the wealthy profit.. they can have full-time people dedicated to working out the nuances in the code, finding holes that the authors didn’t intend, or pushing congressional members to put exceptions in the code.[/quote]

That’s true. That’s a why a simple system with a substantially higher marginal tax rates for the high earners is a progressive system.

[briansd1]

[quote=ucodegen]

The more convoluted you make the tax system, the more the wealthy profit.. they can have full-time people dedicated to working out the nuances in the code, finding holes that the authors didn’t intend, or pushing congressional members to put exceptions in the code.[/quote]

That’s true. That’s a why a simple system with a substantially higher marginal tax rates for the high earners is a progressive system.

[briansd1]

[quote=ucodegen]

The more convoluted you make the tax system, the more the wealthy profit.. they can have full-time people dedicated to working out the nuances in the code, finding holes that the authors didn’t intend, or pushing congressional members to put exceptions in the code.[/quote]

That’s true. That’s a why a simple system with a substantially higher marginal tax rates for the high earners is a progressive system.

[briansd1]

[quote=ucodegen]

The more convoluted you make the tax system, the more the wealthy profit.. they can have full-time people dedicated to working out the nuances in the code, finding holes that the authors didn’t intend, or pushing congressional members to put exceptions in the code.[/quote]

That’s true. That’s a why a simple system with a substantially higher marginal tax rates for the high earners is a progressive system.

[briansd1]

[quote=ucodegen]

The more convoluted you make the tax system, the more the wealthy profit.. they can have full-time people dedicated to working out the nuances in the code, finding holes that the authors didn’t intend, or pushing congressional members to put exceptions in the code.[/quote]

That’s true. That’s a why a simple system with a substantially higher marginal tax rates for the high earners is a progressive system.

[ucodegen]

[quote briansd1]
That’s true. That’s a why a simple system with a substantially higher marginal tax rates for the high earners is a progressive system.
[/quote]

Shouldn’t be ‘punitive’, but there is an ‘economy of scale’ relative to disposable income. The more you make, the less is allocated to basic living expenses, emphasis on ‘basic’.

I have no problem with adding in another bracket.. ie a 30 to 35% bracket on very high earners on the fed form.. I would need to dig through the bracket to locate a good #.. but it would probably be over $2Mil/yr. The % should not be higher than the corporate tax rate (35%) because it would push people to ‘game the system’.

With CA state.. probably something around 11%.. on a very high income… again watching out for state corporate tax rates.
http://www.ftb.ca.gov/businesses/faq/717.shtml
I gotta look into S-corporations.. 8-P

Taking all the above into consideration though, I do think that the gov has to watch out for abuse of its citizenry through taxes.

[ucodegen]

[quote briansd1]
That’s true. That’s a why a simple system with a substantially higher marginal tax rates for the high earners is a progressive system.
[/quote]

Shouldn’t be ‘punitive’, but there is an ‘economy of scale’ relative to disposable income. The more you make, the less is allocated to basic living expenses, emphasis on ‘basic’.

I have no problem with adding in another bracket.. ie a 30 to 35% bracket on very high earners on the fed form.. I would need to dig through the bracket to locate a good #.. but it would probably be over $2Mil/yr. The % should not be higher than the corporate tax rate (35%) because it would push people to ‘game the system’.

With CA state.. probably something around 11%.. on a very high income… again watching out for state corporate tax rates.
http://www.ftb.ca.gov/businesses/faq/717.shtml
I gotta look into S-corporations.. 8-P

Taking all the above into consideration though, I do think that the gov has to watch out for abuse of its citizenry through taxes.

[ucodegen]

[quote briansd1]
That’s true. That’s a why a simple system with a substantially higher marginal tax rates for the high earners is a progressive system.
[/quote]

Shouldn’t be ‘punitive’, but there is an ‘economy of scale’ relative to disposable income. The more you make, the less is allocated to basic living expenses, emphasis on ‘basic’.

I have no problem with adding in another bracket.. ie a 30 to 35% bracket on very high earners on the fed form.. I would need to dig through the bracket to locate a good #.. but it would probably be over $2Mil/yr. The % should not be higher than the corporate tax rate (35%) because it would push people to ‘game the system’.

With CA state.. probably something around 11%.. on a very high income… again watching out for state corporate tax rates.
http://www.ftb.ca.gov/businesses/faq/717.shtml
I gotta look into S-corporations.. 8-P

Taking all the above into consideration though, I do think that the gov has to watch out for abuse of its citizenry through taxes.

[ucodegen]

[quote briansd1]
That’s true. That’s a why a simple system with a substantially higher marginal tax rates for the high earners is a progressive system.
[/quote]

Shouldn’t be ‘punitive’, but there is an ‘economy of scale’ relative to disposable income. The more you make, the less is allocated to basic living expenses, emphasis on ‘basic’.

I have no problem with adding in another bracket.. ie a 30 to 35% bracket on very high earners on the fed form.. I would need to dig through the bracket to locate a good #.. but it would probably be over $2Mil/yr. The % should not be higher than the corporate tax rate (35%) because it would push people to ‘game the system’.

With CA state.. probably something around 11%.. on a very high income… again watching out for state corporate tax rates.
http://www.ftb.ca.gov/businesses/faq/717.shtml
I gotta look into S-corporations.. 8-P

Taking all the above into consideration though, I do think that the gov has to watch out for abuse of its citizenry through taxes.

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