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SK in CV
Participant[quote=walterwhite]what’s the case for increasing the subsidy?[/quote]
Sounds good to me. Easiest way is to increase marginal rates on top tier income. Value of the deduction (and the subsidy for the interest) goes up. 1st step done!
Participant[quote=walterwhite]what’s the case for increasing the subsidy?[/quote]
Sounds good to me. Easiest way is to increase marginal rates on top tier income. Value of the deduction (and the subsidy for the interest) goes up. 1st step done!
Participant[quote=walterwhite]what’s the case for increasing the subsidy?[/quote]
Sounds good to me. Easiest way is to increase marginal rates on top tier income. Value of the deduction (and the subsidy for the interest) goes up. 1st step done!
Participant[quote=aldante]
From the transcript: BACKGROUND HOW WE GOT HERE!!!! (to your point)
pg1 paragragh 6
Seeing their market share decline as a result fo this change of demand, the GSEs made the decision to widen their focus from the safter prime loans and begin chasing the non-prime market, loosening long-standing underwiriting and risk managment standards along the way. This would be a fateful decision that not only proved disastrous for the companies themselves – but ultimately also for the American Taxpayer.
Once again….RP was right in what happened and you are trying some rhetorical tool to make your arguement.He never stated that the GSE’s caused the problem but that the passgae of the bill would add fuel to the fire of a false housing boom. Which is exactly what happened.[/quote]
You have to read that quote in historical context. It doesn’t say anywhere in there that the GSE’s were a significant party to the growth of the housing bubble or the cause of its crash. The GSE’s didn’t loosen their standards and get into the subprime market until late in 2006, well after the peak. By that time, the crash had already begun. That was what he was referring to in the last sentence of the quoted piece. The GSE management decided it would be a good idea to both acquire subprime loans and became, by far, the biggest buyer of mortgage backed securities, something they had never done before. (Indeed, they have always issued MBS, but never before bought them.) That was the disasterous decision for both the shareholders of the GSE’s and the federal government, ergo, the taxpayers. That decision probably temporarily slowed the crash.
Paul was right in his prediction. He was dead wrong on how or why it was going to happen.
Participant[quote=aldante]
From the transcript: BACKGROUND HOW WE GOT HERE!!!! (to your point)
pg1 paragragh 6
Seeing their market share decline as a result fo this change of demand, the GSEs made the decision to widen their focus from the safter prime loans and begin chasing the non-prime market, loosening long-standing underwiriting and risk managment standards along the way. This would be a fateful decision that not only proved disastrous for the companies themselves – but ultimately also for the American Taxpayer.
Once again….RP was right in what happened and you are trying some rhetorical tool to make your arguement.He never stated that the GSE’s caused the problem but that the passgae of the bill would add fuel to the fire of a false housing boom. Which is exactly what happened.[/quote]
You have to read that quote in historical context. It doesn’t say anywhere in there that the GSE’s were a significant party to the growth of the housing bubble or the cause of its crash. The GSE’s didn’t loosen their standards and get into the subprime market until late in 2006, well after the peak. By that time, the crash had already begun. That was what he was referring to in the last sentence of the quoted piece. The GSE management decided it would be a good idea to both acquire subprime loans and became, by far, the biggest buyer of mortgage backed securities, something they had never done before. (Indeed, they have always issued MBS, but never before bought them.) That was the disasterous decision for both the shareholders of the GSE’s and the federal government, ergo, the taxpayers. That decision probably temporarily slowed the crash.
Paul was right in his prediction. He was dead wrong on how or why it was going to happen.
Participant[quote=aldante]
From the transcript: BACKGROUND HOW WE GOT HERE!!!! (to your point)
pg1 paragragh 6
Seeing their market share decline as a result fo this change of demand, the GSEs made the decision to widen their focus from the safter prime loans and begin chasing the non-prime market, loosening long-standing underwiriting and risk managment standards along the way. This would be a fateful decision that not only proved disastrous for the companies themselves – but ultimately also for the American Taxpayer.
Once again….RP was right in what happened and you are trying some rhetorical tool to make your arguement.He never stated that the GSE’s caused the problem but that the passgae of the bill would add fuel to the fire of a false housing boom. Which is exactly what happened.[/quote]
You have to read that quote in historical context. It doesn’t say anywhere in there that the GSE’s were a significant party to the growth of the housing bubble or the cause of its crash. The GSE’s didn’t loosen their standards and get into the subprime market until late in 2006, well after the peak. By that time, the crash had already begun. That was what he was referring to in the last sentence of the quoted piece. The GSE management decided it would be a good idea to both acquire subprime loans and became, by far, the biggest buyer of mortgage backed securities, something they had never done before. (Indeed, they have always issued MBS, but never before bought them.) That was the disasterous decision for both the shareholders of the GSE’s and the federal government, ergo, the taxpayers. That decision probably temporarily slowed the crash.
Paul was right in his prediction. He was dead wrong on how or why it was going to happen.
Participant[quote=aldante]
From the transcript: BACKGROUND HOW WE GOT HERE!!!! (to your point)
pg1 paragragh 6
Seeing their market share decline as a result fo this change of demand, the GSEs made the decision to widen their focus from the safter prime loans and begin chasing the non-prime market, loosening long-standing underwiriting and risk managment standards along the way. This would be a fateful decision that not only proved disastrous for the companies themselves – but ultimately also for the American Taxpayer.
Once again….RP was right in what happened and you are trying some rhetorical tool to make your arguement.He never stated that the GSE’s caused the problem but that the passgae of the bill would add fuel to the fire of a false housing boom. Which is exactly what happened.[/quote]
You have to read that quote in historical context. It doesn’t say anywhere in there that the GSE’s were a significant party to the growth of the housing bubble or the cause of its crash. The GSE’s didn’t loosen their standards and get into the subprime market until late in 2006, well after the peak. By that time, the crash had already begun. That was what he was referring to in the last sentence of the quoted piece. The GSE management decided it would be a good idea to both acquire subprime loans and became, by far, the biggest buyer of mortgage backed securities, something they had never done before. (Indeed, they have always issued MBS, but never before bought them.) That was the disasterous decision for both the shareholders of the GSE’s and the federal government, ergo, the taxpayers. That decision probably temporarily slowed the crash.
Paul was right in his prediction. He was dead wrong on how or why it was going to happen.
Participant[quote=aldante]
From the transcript: BACKGROUND HOW WE GOT HERE!!!! (to your point)
pg1 paragragh 6
Seeing their market share decline as a result fo this change of demand, the GSEs made the decision to widen their focus from the safter prime loans and begin chasing the non-prime market, loosening long-standing underwiriting and risk managment standards along the way. This would be a fateful decision that not only proved disastrous for the companies themselves – but ultimately also for the American Taxpayer.
Once again….RP was right in what happened and you are trying some rhetorical tool to make your arguement.He never stated that the GSE’s caused the problem but that the passgae of the bill would add fuel to the fire of a false housing boom. Which is exactly what happened.[/quote]
You have to read that quote in historical context. It doesn’t say anywhere in there that the GSE’s were a significant party to the growth of the housing bubble or the cause of its crash. The GSE’s didn’t loosen their standards and get into the subprime market until late in 2006, well after the peak. By that time, the crash had already begun. That was what he was referring to in the last sentence of the quoted piece. The GSE management decided it would be a good idea to both acquire subprime loans and became, by far, the biggest buyer of mortgage backed securities, something they had never done before. (Indeed, they have always issued MBS, but never before bought them.) That was the disasterous decision for both the shareholders of the GSE’s and the federal government, ergo, the taxpayers. That decision probably temporarily slowed the crash.
Paul was right in his prediction. He was dead wrong on how or why it was going to happen.
Participant[quote=captcha][quote=SK in CV]
1st, it was a subsidy for all debt when all interest was deductible. The remaining deductions for mortgage and other interest is still a subsidy. (The argument used in the mid-80’s when the elimination of the personal interest deduction was proposed is that it was a subsidy for borrowers who went into debt.)
[/quote]It is a subsidy if we agree that any money not confiscated by the government is a subsidy to those who got to keep it.
Interest was never taxed until 1986. I was not here in 1986 when some of the interest was made taxable, but I believe you when you say that politicians framed the tax increase as an issue of fairness. That’s my only point – taxing something that has been going on since the invention of natural exchange and was never ever taxed might be ‘good’ policy and required, but it should not be presented as stopping a giveaway.
[/quote]Interest income has been taxable for almost 100 years. (income tax started in 1913.) Interest paid was also deductible since the beginning of income tax in the US. But 100 years ago, almost no one other than farmers had mortgages on homes. There were no credit cards or HELOCS or car loans. It wasn’t until the mid-30’s that the number home mortgages exceeded farm mortgages.
But that doesn’t negate the fact that the mortgage interest deduction is a subsidy (or in the current lingo, a tax expenditure.) As is the deduction for church contributions, retirement plan contributions, and medical insurance. The tax code continues to evolve, In the last 100 years it’s undergone 2 major overhauls (in 1954 and again in 1986), with top tax rates ranging from the 7% at the beginning, to a high of 94% during WWII. The argument that once a deduction is codified, then any elimination of that deduction becomes a “confiscation” is absurd, unless you consider the first dollar of income tax paid as confiscation. If that’s the case, the largest confiscation of all time ocurred during the mid-80’s. It’s not a term I ever remember hearing either before or after tax reform passed under Ronald Reagan.
[quote=captcha]
[quote=SK in CV]
2nd, your argument would seem to support never reducing government entitlements or expenditures. So social security can never be reduced, medicaid cutbacks are out of the question, the Earned Income Credit must be permanent, reduction of college education funding should have been opposed, and eliminations of government employee retirement plans is yet again, the government taking something away. Is that really the argument you want to make?[/quote]No. My argument is that the interest deduction is not an expenditure, that’s all.
Incidentally, you picked items that I have no problems with – I don’t think any of the listed should be reduced. But that can’t be inferred from my premises.[/quote]
We’re on the same page as far as elimination to those programs. But any way you look at it, they are all expenditures, as sure as elimniation of deductions is, as is funding the military.
Participant[quote=captcha][quote=SK in CV]
1st, it was a subsidy for all debt when all interest was deductible. The remaining deductions for mortgage and other interest is still a subsidy. (The argument used in the mid-80’s when the elimination of the personal interest deduction was proposed is that it was a subsidy for borrowers who went into debt.)
[/quote]It is a subsidy if we agree that any money not confiscated by the government is a subsidy to those who got to keep it.
Interest was never taxed until 1986. I was not here in 1986 when some of the interest was made taxable, but I believe you when you say that politicians framed the tax increase as an issue of fairness. That’s my only point – taxing something that has been going on since the invention of natural exchange and was never ever taxed might be ‘good’ policy and required, but it should not be presented as stopping a giveaway.
[/quote]Interest income has been taxable for almost 100 years. (income tax started in 1913.) Interest paid was also deductible since the beginning of income tax in the US. But 100 years ago, almost no one other than farmers had mortgages on homes. There were no credit cards or HELOCS or car loans. It wasn’t until the mid-30’s that the number home mortgages exceeded farm mortgages.
But that doesn’t negate the fact that the mortgage interest deduction is a subsidy (or in the current lingo, a tax expenditure.) As is the deduction for church contributions, retirement plan contributions, and medical insurance. The tax code continues to evolve, In the last 100 years it’s undergone 2 major overhauls (in 1954 and again in 1986), with top tax rates ranging from the 7% at the beginning, to a high of 94% during WWII. The argument that once a deduction is codified, then any elimination of that deduction becomes a “confiscation” is absurd, unless you consider the first dollar of income tax paid as confiscation. If that’s the case, the largest confiscation of all time ocurred during the mid-80’s. It’s not a term I ever remember hearing either before or after tax reform passed under Ronald Reagan.
[quote=captcha]
[quote=SK in CV]
2nd, your argument would seem to support never reducing government entitlements or expenditures. So social security can never be reduced, medicaid cutbacks are out of the question, the Earned Income Credit must be permanent, reduction of college education funding should have been opposed, and eliminations of government employee retirement plans is yet again, the government taking something away. Is that really the argument you want to make?[/quote]No. My argument is that the interest deduction is not an expenditure, that’s all.
Incidentally, you picked items that I have no problems with – I don’t think any of the listed should be reduced. But that can’t be inferred from my premises.[/quote]
We’re on the same page as far as elimination to those programs. But any way you look at it, they are all expenditures, as sure as elimniation of deductions is, as is funding the military.
Participant[quote=captcha][quote=SK in CV]
1st, it was a subsidy for all debt when all interest was deductible. The remaining deductions for mortgage and other interest is still a subsidy. (The argument used in the mid-80’s when the elimination of the personal interest deduction was proposed is that it was a subsidy for borrowers who went into debt.)
[/quote]It is a subsidy if we agree that any money not confiscated by the government is a subsidy to those who got to keep it.
Interest was never taxed until 1986. I was not here in 1986 when some of the interest was made taxable, but I believe you when you say that politicians framed the tax increase as an issue of fairness. That’s my only point – taxing something that has been going on since the invention of natural exchange and was never ever taxed might be ‘good’ policy and required, but it should not be presented as stopping a giveaway.
[/quote]Interest income has been taxable for almost 100 years. (income tax started in 1913.) Interest paid was also deductible since the beginning of income tax in the US. But 100 years ago, almost no one other than farmers had mortgages on homes. There were no credit cards or HELOCS or car loans. It wasn’t until the mid-30’s that the number home mortgages exceeded farm mortgages.
But that doesn’t negate the fact that the mortgage interest deduction is a subsidy (or in the current lingo, a tax expenditure.) As is the deduction for church contributions, retirement plan contributions, and medical insurance. The tax code continues to evolve, In the last 100 years it’s undergone 2 major overhauls (in 1954 and again in 1986), with top tax rates ranging from the 7% at the beginning, to a high of 94% during WWII. The argument that once a deduction is codified, then any elimination of that deduction becomes a “confiscation” is absurd, unless you consider the first dollar of income tax paid as confiscation. If that’s the case, the largest confiscation of all time ocurred during the mid-80’s. It’s not a term I ever remember hearing either before or after tax reform passed under Ronald Reagan.
[quote=captcha]
[quote=SK in CV]
2nd, your argument would seem to support never reducing government entitlements or expenditures. So social security can never be reduced, medicaid cutbacks are out of the question, the Earned Income Credit must be permanent, reduction of college education funding should have been opposed, and eliminations of government employee retirement plans is yet again, the government taking something away. Is that really the argument you want to make?[/quote]No. My argument is that the interest deduction is not an expenditure, that’s all.
Incidentally, you picked items that I have no problems with – I don’t think any of the listed should be reduced. But that can’t be inferred from my premises.[/quote]
We’re on the same page as far as elimination to those programs. But any way you look at it, they are all expenditures, as sure as elimniation of deductions is, as is funding the military.
Participant[quote=captcha][quote=SK in CV]
1st, it was a subsidy for all debt when all interest was deductible. The remaining deductions for mortgage and other interest is still a subsidy. (The argument used in the mid-80’s when the elimination of the personal interest deduction was proposed is that it was a subsidy for borrowers who went into debt.)
[/quote]It is a subsidy if we agree that any money not confiscated by the government is a subsidy to those who got to keep it.
Interest was never taxed until 1986. I was not here in 1986 when some of the interest was made taxable, but I believe you when you say that politicians framed the tax increase as an issue of fairness. That’s my only point – taxing something that has been going on since the invention of natural exchange and was never ever taxed might be ‘good’ policy and required, but it should not be presented as stopping a giveaway.
[/quote]Interest income has been taxable for almost 100 years. (income tax started in 1913.) Interest paid was also deductible since the beginning of income tax in the US. But 100 years ago, almost no one other than farmers had mortgages on homes. There were no credit cards or HELOCS or car loans. It wasn’t until the mid-30’s that the number home mortgages exceeded farm mortgages.
But that doesn’t negate the fact that the mortgage interest deduction is a subsidy (or in the current lingo, a tax expenditure.) As is the deduction for church contributions, retirement plan contributions, and medical insurance. The tax code continues to evolve, In the last 100 years it’s undergone 2 major overhauls (in 1954 and again in 1986), with top tax rates ranging from the 7% at the beginning, to a high of 94% during WWII. The argument that once a deduction is codified, then any elimination of that deduction becomes a “confiscation” is absurd, unless you consider the first dollar of income tax paid as confiscation. If that’s the case, the largest confiscation of all time ocurred during the mid-80’s. It’s not a term I ever remember hearing either before or after tax reform passed under Ronald Reagan.
[quote=captcha]
[quote=SK in CV]
2nd, your argument would seem to support never reducing government entitlements or expenditures. So social security can never be reduced, medicaid cutbacks are out of the question, the Earned Income Credit must be permanent, reduction of college education funding should have been opposed, and eliminations of government employee retirement plans is yet again, the government taking something away. Is that really the argument you want to make?[/quote]No. My argument is that the interest deduction is not an expenditure, that’s all.
Incidentally, you picked items that I have no problems with – I don’t think any of the listed should be reduced. But that can’t be inferred from my premises.[/quote]
We’re on the same page as far as elimination to those programs. But any way you look at it, they are all expenditures, as sure as elimniation of deductions is, as is funding the military.
Participant[quote=captcha][quote=SK in CV]
1st, it was a subsidy for all debt when all interest was deductible. The remaining deductions for mortgage and other interest is still a subsidy. (The argument used in the mid-80’s when the elimination of the personal interest deduction was proposed is that it was a subsidy for borrowers who went into debt.)
[/quote]It is a subsidy if we agree that any money not confiscated by the government is a subsidy to those who got to keep it.
Interest was never taxed until 1986. I was not here in 1986 when some of the interest was made taxable, but I believe you when you say that politicians framed the tax increase as an issue of fairness. That’s my only point – taxing something that has been going on since the invention of natural exchange and was never ever taxed might be ‘good’ policy and required, but it should not be presented as stopping a giveaway.
[/quote]Interest income has been taxable for almost 100 years. (income tax started in 1913.) Interest paid was also deductible since the beginning of income tax in the US. But 100 years ago, almost no one other than farmers had mortgages on homes. There were no credit cards or HELOCS or car loans. It wasn’t until the mid-30’s that the number home mortgages exceeded farm mortgages.
But that doesn’t negate the fact that the mortgage interest deduction is a subsidy (or in the current lingo, a tax expenditure.) As is the deduction for church contributions, retirement plan contributions, and medical insurance. The tax code continues to evolve, In the last 100 years it’s undergone 2 major overhauls (in 1954 and again in 1986), with top tax rates ranging from the 7% at the beginning, to a high of 94% during WWII. The argument that once a deduction is codified, then any elimination of that deduction becomes a “confiscation” is absurd, unless you consider the first dollar of income tax paid as confiscation. If that’s the case, the largest confiscation of all time ocurred during the mid-80’s. It’s not a term I ever remember hearing either before or after tax reform passed under Ronald Reagan.
[quote=captcha]
[quote=SK in CV]
2nd, your argument would seem to support never reducing government entitlements or expenditures. So social security can never be reduced, medicaid cutbacks are out of the question, the Earned Income Credit must be permanent, reduction of college education funding should have been opposed, and eliminations of government employee retirement plans is yet again, the government taking something away. Is that really the argument you want to make?[/quote]No. My argument is that the interest deduction is not an expenditure, that’s all.
Incidentally, you picked items that I have no problems with – I don’t think any of the listed should be reduced. But that can’t be inferred from my premises.[/quote]
We’re on the same page as far as elimination to those programs. But any way you look at it, they are all expenditures, as sure as elimniation of deductions is, as is funding the military.
Participant[quote=captcha]
That hurts 🙂The government increases what it takes and all of the sudden the money that it does not take becomes a subsidy? I am not saying that taxing interest on mortgage is unfair way of covering the expenses incurred by the government, but that deduction is not something given to people. It is something not yet taken away from them.[/quote]
1st, it was a subsidy for all debt when all interest was deductible. The remaining deductions for mortgage and other interest is still a subsidy. (The argument used in the mid-80’s when the elimination of the personal interest deduction was proposed is that it was a subsidy for borrowers who went into debt.)
2nd, your argument would seem to support never reducing government entitlements or expenditures. So social security can never be reduced, medicaid cutbacks are out of the question, the Earned Income Credit must be permanent, reduction of college education funding should have been opposed, and eliminations of government employee retirement plans is yet again, the government taking something away. Is that really the argument you want to make?
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