Of course not. And when it puts cash in your pocket that should be taxable.
For anybody that’s interested in a detour, California’s famous Proposition 13 is an interesting bit of an analog:
[And – no: trying to keep pensioners from being thrown out of their homes isn’t the same thing as taxing billionaires on the volatile share price of significant stock holdings]
Okay, so if someone gets a loan using their billions as collateral, you think that should be taxed?
Yes, when they spend the money they were loaned it should be taxed.
But not if they use it to buy up more stock in other companies, or if they use it to buy property. Only if they use it to buy groceries?
Lets say that you have a billion dollars. You take out a 10 million dollar loan, put that into a holding company, and use that to buy up a few hundred houses, then rent them out for 50% more than a mortgage would cost. Where do you get taxed?
What? No, you’re not reading, buying stock is economic activity so is buying property both of those should be taxed. So is buying hookers and blow. But yes buying groceries should be taxed too.
Put that into a holding company, buy a few hundred houses, receive rent payments, pay to maintain the homes, pay to set up the holding company, and pay to have the taxes done for the holding company for a few places of the top of my head.
ETA: Pay back the loan would be another good one.
So, you are for a tax on purchasing stock and real estate? Can’t say I’m against those, but that would be an entirely new tax.
Would this be a progressive tax, or would it be imposed on your average homebuyer and 401k holder?
But you are not doing any of those things, the real estate holding company that you own, that is just an investment that isn’t putting any cash in your pocket, as you say, is.
And such holding companies are very clever about depreciation and expenses, and end up paying very little if any in taxes.
Sure. I think that taxes on stock purchases is one of the best levers we have to prevent micro transactions and some of the speed trading that’s going on. It’s not as sexy as taxing the wealthy but would accomplish much more.
Ehh, if I was God-king it would be flat. Pay 10% on stock purchase or whatever I could be talked into a progressive tax but it doesn’t seem necessary.
That is true the holding company would be taxed for everything except for the event when you funded it. Same tax money goes to the government though.
Which is why you tax activity. It’s much harder to hide that. At some point money changes hands which creats a taxable event.
I actually agree entirely here. I don’t know that it would solve the problem of funding the govt, but the speed trading and micro transactions are something that causes a number of problems that could be reduced by having such a tax. I’ve generally seen a very small tax, like less than a percent, that would only affect speed traders, but not “everyday people”.
So, any form of 401k or other personal stock investment is wiped out entirely?
Is there any form of investment for “everyday people” that you would leave to them?
I mean, you said a tax on buying houses, would that be a 10% tax as well? You think that we should raise the cost of houses by 10% for everyone? That wipes out a significant amount of wealth retention for the middle class.
Rebutting an argument which has, as its basis, America’s wealth inequality and the silly arguments the wealthy wish the middle class to believe, with a counter which has a different example of America’s wealth inequality and the silly arguments the wealthy wish the middle class to believe… is not the rhetorical win you may think it is.
Why do the old people lose their homes?
- In Texas, the state is funded by property and use taxes, no income taxes.
- Their incomes have been increasingly depressed vis-a-vis the wealthy since 1975, so that a middle class person now earns only $8,000 a year more than they did in 1975, adjusting for inflation of course, while a 99%er had their income increase $504,000.
I would argue that we are better served to have a society where grandma and grandpa can earn enough surplus income throughout their lives as to easily afford those property taxes but Reaganomics took that away from us to the tune of a $50 trillion wealth transfer to the 1%.
Cite on point 2:
https://www.rand.org/pubs/working_papers/WRA516-1.html
Cites for ‘Reaganomics took that…’
Sorry, but I suggest that anyone who mistakes paying back a private loan with the payment of taxes may wish to Google or YouTube some explainer videos on economics and finance, especially on the macro scale.
So, you would change the tax code to get rid of the depreciations and write offs that reduce their tax burden to nearly 0?
Do you think you can do that, to tax real estate holding companies, without impacting small businesses? For instance, right now, if I have to buy a non-durable good or supply, I don’t have to pay taxes on it. If I pay an employee, I don’t pay (income) taxes on that. If I buy a durable item or property, I get to have my CPA put it on my amortization/depreciation table, wave a magic wand, and reduce my taxes that I pay on it. Would I still be able to get those deductions, while somehow denying them to real estate holding companies?
Sounds like some pretty complicated tax code to accomplish that, and if you don’t, then you pretty much wipe out small businesses.
Hardly. This would encourage buy and hold strategies. You’d pay when you bought and the next guy would pay when you sold and you wouldn’t be taxed in the middle. It would basically convert all 401ks to roths except there would be no limit to the amount you could put in.
Nope.
The rate should be changed based on the economic activity. I certainly haven’t bothered to flesh out a full tax system to raise federal income to an appropriate level.
Sure the purchase price would go up but the monthly payments would go down since they wouldn’t be paying property taxes. Since property taxes work out to ~30% over the life of the loan there should be plenty of room to play with the tax rate to make it comparable.
Any one who mistakes a new tax proposal for the current reality may want to check out their local remedial education courses.
Puh-leeze.
Tell me how paying back the loan is a tax payment. I’ll wait.
Even if you use the “the interest is taxed as income” argument, it’s taxed as business income and is subject to all the business deductions, etc, that Wells Fargo, et al, have placed into the tax code. In addition, if the loan is paid off faster, there is less interest paid, therefore fewer tax dollars hit the coffers.
Also, feel free to not ignore the much more substantive post above it. No hurry, though… it’s a beautiful San Antonio Saturday afternoon, I have a date at 12pm, a wedding tomorrow, and I’m not hanging around for a response.
And if the weather is the same where you are as it is where I am, I wouldn’t hang around writing it. 
Yep, as I said in my first post I’d like to get rid of all deductions.
Don’t want to. When my company buys its next semi load (24 tons ) of copper I’d be ok with paying taxes on that purchase especially compared to paying wealth taxes on it for as long as it sits in my inventory.
Wouldn’t it be nice to no not have to pay for that service?
Hardly. The only difference is you would pay you taxes through out the year instead of at the end of the quarter. You don’t need an income tax if you’re also taxing every transaction.