A tax on the principle on debt is an interesting way to go. (calculate, borrow)

[ContrarianEcon]

Why not tax the principle on debt to run our government? Do away with all other taxes? That way if you don't want to pay taxes then don't borrow any money!!!!

[ncole1]

Interesting idea but you'd create another housing crisis by throwing people with big mortgages into default.

[ContrarianEcon]

Possibly but if you phased it in slowly over time it wouldn't be that bad.

[ncole1]

It's also regressive at higher income levels, as the really rich don't have proportionally bigger mortgages...

[ContrarianEcon]

Originally Posted by ncole1

It's also regressive at higher income levels, as the really rich don't have proportionally bigger mortgages...

Take a look at corporate debt loads. They tend to have business debts.

[Lowexpectations]

What's the contraction in the economy if this occurrs?

[ContrarianEcon]

Originally Posted by Lowexpectations

What's the contraction in the economy if this occurrs?

The same as is the FED upped the rates by the same amount.

[ncole1]

Originally Posted by ContrarianEcon

Take a look at corporate debt loads. They tend to have business debts.

They'd have much less if you taxed it...

[ContrarianEcon]

Originally Posted by ncole1

They'd have much less if you taxed it...

Yep and the high debt load is a big part of what is wrong with our economy.

[Lowexpectations]

Originally Posted by ContrarianEcon

The same as is the FED upped the rates by the same amount.

I'm not sure that's factual. How on earth would you calculate the delta in income? And debt wouldn't simply be retired across the board in either scenario so I'm not sure how youd know that