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I wonder how businesses are able to collect their "taxes" without fraud or abuse? Oh that's right they charge the person actually receiving the service.
Gwynedd1, tax policy, regulations, diligence of enforcement, integrity of tax administrators and tax payers all affect and are affected by each other.
Regarding taxation of entrepreneurs and their enterprises:
I’m among those that believe if incomes are taxed, we should tax both individuals’ and their enterprises’ incomes.
If we fail to tax enterprises’ incomes, the enterprises’ major owners and officers will fund their personal expenditures from skimming their enterprises’ revenues and/or accounting those expenditures as being on behalf’ of the enterprise and thus not subject to income tax.
I agree that the customers and/or the final users’ of an enterprises’ products do eventually bear the net costs of the enterprises’ ordinary expenditures; taxes ordinarily paid by all or almost all competing enterprises are ordinary expenses.
Corporate share holders must eat a good portion of extremely high extraordinary expenditures due to their enterprises’ unfortunate decisions or consequences of acting illegally or recklessly.
Small detail for you. Renters cover all of the things that homeowners do, plus some profit for the homeowners, AND renters insurance. Think that through.
You are assuming that the owners have a profit, and also that the median renter's housing unit is equivalent to the median owner's unit. Both of these should be called into question....
You are assuming that the owners have a profit, and also that the median renter's housing unit is equivalent to the median owner's unit. Both of these should be called into question....
I think that in general, local governments - as the level of government closest to and most responsive to voters - are eager to promote single-family neighborhoods, lifestyles, and property values, and cautious to allow less desirable housing types which are perceived as distracting from said (cultural and financial) values.
Put another way, local governments tend to promote artificial rental shortages and thereby promote landlord profit.
I have never assumed that the median rental unit is equivalent to the median owner-occupied unit; I assume the median owner unit to be considerably better than the median renter unit. Doesn't the concept of filtering tell us this is what actually happens on the ground?
So you've been proven wrong, and decide to move the goalpost?
What am I moving? I'm saying renters spend just about as much on housing as do homeowners, if not more, despite having half as much income at the median.
I've not yet seen whether reported homeowner housing expenditures are gross monthly expenditures or are net of income tax breaks, so those homeowner expenses might be smaller than they appear.
This lifecycle of homeownership has important consequences when examining other differences between homeowners and renters. For example, because homeowners as a group tend to be older, they also have higher incomes. The data reveal that the median household income of renters was $31,888 in 2012, compared to $65,514 for homeowners. A considerable part of this income difference is due to age.
We've already seen - the post you quoted - that Zillow says renters spend 30.2% of income on housing and homeowners spend about 15%.
$31,888 * .302 = $9,630
$65,514 * .15 = $9,827
Pretty close, and the numbers fluctuate from year to year.
And the average homeowner enjoys LAND plus considerably more interior space than do renters, so the homeowner's dollar provides greater value than does the renter's dollar.
Sounds like you've proven older people make more money.
How do you think the spending on housing compares if we remove age from the equation? As in homeowners age 35 versus renters age 35?
You are assuming that the owners have a profit, and also that the median renter's housing unit is equivalent to the median owner's unit. Both of these should be called into question....
I've not yet seen whether reported homeowner housing expenditures are gross monthly expenditures or are net of income tax breaks
Tax breaks for home ownership are probably a lot less than you think, because the advantage isn't reducing income by x it is reducing income by (x - standard deduction)
If a married couple itemizes $10k in mortgage interest and $3,000 in property taxes they have $13k, but would have had the standard deduction of $12,600 anyway so they reduced their taxable income by $400, which in a 25% tax bracket would have saved them $100.'
Sounds like you've proven older people make more money.
How do you think the spending on housing compares if we remove age from the equation? As in homeowners age 35 versus renters age 35?
Looks like we can all agree that older people make more money, certainly until they retire and stop working, and then their wealth works for them.
You ask an intriguing question and controlling for age probably changes the numbers dramatically.
I would expect young homeowners (say 35) to differ financially from older homeowners (say 55). For example, I think 55 year old homeowners are more homogeneous (similar) than are 35 year old homeowners.
e.g. I suspect many 35 year old homeowners either had an early windfall (e.g. inheritance) or have significantly higher incomes than the average homeowner.
Tax breaks for home ownership are probably a lot less than you think, because the advantage isn't reducing income by x it is reducing income by (x - standard deduction)
If a married couple itemizes $10k in mortgage interest and $3,000 in property taxes they have $13k, but would have had the standard deduction of $12,600 anyway so they reduced their taxable income by $400, which in a 25% tax bracket would have saved them $100.'
The typical homeowner with that much mortgage interest will also have a state income tax (or sales tax) deduction of a few thousand dollars, which in the 25% tax bracket will save them over $1,000 a year.
If housing expenditures for homeowners and renters differ by only a few hundred dollars a year, the net cost savings of tax breaks could reduce homeowner costs below what renters pay.
Homeowners also enjoy other cost savings by virtue of owning a home, e.g. lower car insurance rates.
#2 doesn't really make sense. If you want fair tax, you really want to eliminate corporate taxes. That money is already taxed when it is realized by the investor. There's no need for double taxation. If we're doing to choose to have double-taxation, we should enable is across the board (tax gains on investments and homes year over year).
Except in many cases it is never realized by the investor, or is realized as capital gains rather than income. There is no law that says corporations have to pay dividends on their stock. In fact, many corporations are very cash rich. Non-financial US firms are holding over $1 trillion in cash reserves.
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