Liberal utopia. 61% tax rate

[Winston]

Interest earned from lending is economic "rent"?
How is that "rent" extracted from the economy?

Intuitively, interest is simply rent on money. I mean there is a reason the early Christian church forbid usury, and there is a reason that we have usury laws. Interest is, by definition, getting more of the pie that is already there rather than creating more pie. Think of your own personal budget. If you borrow a thousand dollars, and you spend it rather than invest it, you are now giving more of your pie, in the way of interest, to the debt holder. Now, if you invest it and expand your income, well that interest is a fair price to pay for your expansion of your own personal frontier curve. So, interest in and of itself is not rent seeking, but interest can, and does, encourage rent seeking.

But since you mention interest perhaps this article concerning the mortgage interest deduction can illustrate the concept of rent seeking.

The beneficiaries of the mortgage interest deduction are clear: homebuilders, real estate agents, mortgage brokers and lenders all win thanks to the tax break encouraging people to pay and borrow more for their homes. Because people who itemize deductions on their taxes and borrow to buy a home face a lower effective cost for that borrowing, they are willing to pay more for a house and to borrow more to complete that purchase. This raises home prices and the income of everyone connected with the buying and selling of homes.

Note that those who are winning from the current policy are mostly securing those wins at the expense of some unidentified losers. The additional allocation of spending on homes and mortgage payments means less money is being spent on other forms of consumption (restaurants, vacations, cars, etc.). More expensive houses don’t mean a larger economy because those higher home prices represent a reallocation of spending, not economic growth. That is the textbook definition of rent-seeking: activity designed simply to capture a bigger share of the pie rather than making the pie bigger.

The Mortgage Interest Deduction Is Pure Rent Seeking So End It

If the mortgage interest deduction only raises debt levels and home prices, but doesn't raise homeownership, then it is not helping society and should be gradually phased out.

www.forbes.com

 

[marvin martian]

In fact, they are. America has the highest rate of private investment in the world.

Do you think "the rich" just fill up huge vaults with coins and gems like Scrooge McDuck?

View attachment 538879

Anyone with money knows that Scrooge McDuck is an idiot. Money sitting around in vaults, or buried in the backyard, or stuffed into exceptionally large mattresses is money lost.

The rich, if they want to stay rich, have no choice but to invest their money where it will work for them ... and us.

^^^That's exactly how retards like AOC and most leftists think economics works.

 

[Claudette]

fncceo
You bet and there are some damned smart investors out there.

 

[TroglocratsRdumb]

How do you know how much someone can spend in a year?

View attachment 538875

Our country prospers on investment. Taking all the money from the productive and doling it out in malt liquor and cigarettes to "the poor" deprives the country of investment capital. No investment, no jobs, no paychecks, more poor.

com-on maaaaan, he is being oppressed

 

[GMCGeneral]

They need to make a contribution to society.

hey shit for brains, they already do. The rich are already shelling out more than 85% of their ACTUAL income in taxes.

 

[Toddsterpatriot]

Intuitively, interest is simply rent on money. I mean there is a reason the early Christian church forbid usury, and there is a reason that we have usury laws. Interest is, by definition, getting more of the pie that is already there rather than creating more pie. Think of your own personal budget. If you borrow a thousand dollars, and you spend it rather than invest it, you are now giving more of your pie, in the way of interest, to the debt holder. Now, if you invest it and expand your income, well that interest is a fair price to pay for your expansion of your own personal frontier curve. So, interest in and of itself is not rent seeking, but interest can, and does, encourage rent seeking.

But since you mention interest perhaps this article concerning the mortgage interest deduction can illustrate the concept of rent seeking.

The beneficiaries of the mortgage interest deduction are clear: homebuilders, real estate agents, mortgage brokers and lenders all win thanks to the tax break encouraging people to pay and borrow more for their homes. Because people who itemize deductions on their taxes and borrow to buy a home face a lower effective cost for that borrowing, they are willing to pay more for a house and to borrow more to complete that purchase. This raises home prices and the income of everyone connected with the buying and selling of homes.

Note that those who are winning from the current policy are mostly securing those wins at the expense of some unidentified losers. The additional allocation of spending on homes and mortgage payments means less money is being spent on other forms of consumption (restaurants, vacations, cars, etc.). More expensive houses don’t mean a larger economy because those higher home prices represent a reallocation of spending, not economic growth. That is the textbook definition of rent-seeking: activity designed simply to capture a bigger share of the pie rather than making the pie bigger.

The Mortgage Interest Deduction Is Pure Rent Seeking So End It

If the mortgage interest deduction only raises debt levels and home prices, but doesn't raise homeownership, then it is not helping society and should be gradually phased out.

www.forbes.com

Interest is, by definition, getting more of the pie that is already there rather than creating more pie.

My loan isn't creating more pie? Are you sure?

If you borrow a thousand dollars, and you spend it rather than invest it, you are now giving more of your pie, in the way of interest, to the debt holder.

You want to limit my non-investing spending?

The additional allocation of spending on homes and mortgage payments means less money is being spent on other forms of consumption (restaurants, vacations, cars, etc.).

Because the home builders/sellers and mortgage lenders take their earnings and bury it?

That is the textbook definition of rent-seeking: activity designed simply to capture a bigger share of the pie rather than making the pie bigger.

Higher priced homes don't encourage more building?

jeffreydorfman/2017/08/02/the-mortgage-interest-deduction-is-pure-rent-seeking

Interesting. The tax deduction is rent seeking, not the mortgage interest.

Sounds more correct than your original claim.

 

[Quasar44]

Mr Clean
Nobody ever paid 90 percent
The nation would collapse

 

[Quasar44]

Tax the super rich ..I don’t care ..but it has huge ramifications for a bad economy

 

[Cellblock2429]

Unbelievable. Let's see if those idiots continue to vote for democrats.

Top earning New Yorkers could face 61.2% combined tax rate under House plan, Californians may face 59% rate

The proposals include a 3% surtax on taxpayers earning more than $5 million a year. They would also raise the top marginal income tax rate to 39.6%.

www.cnbc.com

/----/ Will NY state sue the wealthy if they move to Florida?

 

[alang1216]

Unbelievable. Let's see if those idiots continue to vote for democrats.

It's hard to feel sorry for the rich when I paid more in income taxes than Trump did the year his return was leaked.

 

[Wild Bill Kelsoe]

What was the tax rate during the time that you wingnuts want to get back to, the Eisenhower administration, which you thought was Peak America? I'll wait.

The max rate was 90%, but the part you're missing, is that no one made enough money to pay the max rate.

 

[airplanemechanic]

Your stupidity is matched only by your comedic value.

 

[airplanemechanic]

It's hard to feel sorry for the rich when I paid more in income taxes than Trump did the year his return was leaked.

You paid more than 15 million in taxes in a year? DAYUM.

 

[Crepitus]

hey shit for brains, they already do. The rich are already shelling out more than 85% of their ACTUAL income in taxes.

Who told you that fib?

 

[alang1216]

You paid more than 15 million in taxes in a year? DAYUM.

Not quite that much but more than $750

Report: Trump Only Paid $750 In Taxes For 2016 And 2017​

 

[Independent thinker]

Unbelievable. Let's see if those idiots continue to vote for democrats.

Top earning New Yorkers could face 61.2% combined tax rate under House plan, Californians may face 59% rate

The proposals include a 3% surtax on taxpayers earning more than $5 million a year. They would also raise the top marginal income tax rate to 39.6%.

www.cnbc.com

Not to worry. If these people leave the states all they have to do is tax the remaining people at a higher tax rate.

 

[Toddsterpatriot]

It's hard to feel sorry for the rich when I paid more in income taxes than Trump did the year his return was leaked.

How much should Trump have paid that year? Why?

 

[alang1216]

How much should Trump have paid that year? Why?

At least the same % as I did. His benefits from government are proportionally greater than mine.

 

[Toddsterpatriot]

At least the same % as I did.

Why? Did he make exactly as much as you?

His benefits from government are proportionally greater than mine.

We should charge taxes based on that?

 

[GMCGeneral]

What these morons on the Left think is that by taxing the rich, and I mean super high CONFISCATORY rates, is it will bring in rainbows and unicorns. Once again, their failure is to see that SPENDING, not REVENUE is the problem.