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Old 07-02-2011, 08:16 AM
 
Location: An overtaxed suburb of NYC
5,623 posts, read 3,579,810 times
Reputation: 3300
Quote:
Originally Posted by pghquest View Post
Why am I explaining this to people that are old enough to be posting here?
Because people let their ideology get in the way of reality. I'm guilty of it too. Nice explanation by the way.
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Old 07-02-2011, 08:19 AM
 
Location: Portland, OR
6,761 posts, read 2,707,009 times
Reputation: 3047
I don't think Reagan is the standard bearer for present day ideology. Many republicans reference him because he's the last president we've ever had that had a pair.
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Old 07-02-2011, 08:41 AM
 
55,121 posts, read 26,385,760 times
Reputation: 6864
Quote:
Originally Posted by RVAtoCNC View Post
This is crapola - let's consider my family is a "business", this would mean that I would only pay tax on whatever is left of my paycheck after all "family business" expenses, which means I would pay probably nothing in tax, but that's not the way it is - my GROSS pay is taxed, not my net like businesses, albeit certain deductions like health ins. premiums do reduce my income a little.
I stopped here because you are wrong. When you have a job like nursing, your costs with having that job reduces your gross, and you as a family, still only pays taxes on NET...

Mechanics reduce cost of tools, maids reduce cost of of cleaning material, nurses reduce uniform costs.. NO ONE pays tax on gross. It might seem that way to those who are in a job without expenses but EVERYONE pays taxes on net proceeds from their work.
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Old 07-02-2011, 10:14 AM
 
1,462 posts, read 483,284 times
Reputation: 790
Here are simple examples of expenses businesses get to write off: 1) tax on fuel used in their vehicles. Every trucking company knows to keep a record so their price per gallon is reduced. 2) interest. Businesses get to deduct the interest they pay. This was limted under Reagan for individual homeowners to just their mortgages and home equity loans. 3) travel expenses. People can't deduct their mileage traveling to and from work, but businesses can deduct mileage used in the conduct of their work.
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Old 07-02-2011, 10:23 AM
 
6,224 posts, read 5,157,402 times
Reputation: 3017
Quote:
Originally Posted by RVAtoCNC View Post
...for me personally. In 1986, my wife and I were in debt up to our eyeballs - we earned very little, had to rent because we could not afford 15% interest on a mortgage, we had a new baby, and were mightily struggling and miserably in debt, but we looked forward to being able to deduct our huge credit interst every year. So what does Mr. Tax Cut Reagan do? sign the biggest tax increase in the history of my existence by abolishing the deduction on credit interest. I lean conservative in most areas, and liked Reagan generally, but could never forgive him for this screw-job - so when I hear Republicans now (I am one) screaming for continued tax breaks for the rich, you know what I think? - Screw em and tax em.!!!
Tax interest was once tax deductible? Wow. A lot of people could use that now as they try to pay off their debt, couldn't they?
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Old 07-02-2011, 03:42 PM
 
Location: San Diego, CA
4,258 posts, read 4,044,065 times
Reputation: 1386
Quote:
Originally Posted by RVAtoCNC View Post
Yeah that's great - most poor struggling folks don't own their own business, so increase tax on the poor while those fortunate to have the capital to have their own business continues with the tax breaks. Let's make business expense interest non-deductible too - what's good for the goose...........
As you already pointed out in the original post, you are one of the reasons consumer debt was eliminated as a write off. Too many people were taking on debt believing it would (literally) pay for itself since you could write it off on your taxes. As such, a consumer debt bubble formed, and low interest rates encouraged more borrowing. Enter the 1986 elimination of the consumer debt deduction (actually, it was formally eliminated in 1991, but I digress).

From a historical perspective, the deduction was introduced in the 1960s when households were saving too much of their income (no joke). The deductions were introduced to get consumers to take on more debt and contribute more to the economy. By the 1970s and first half of the 1980s, the opposite trend was observed: too little saving and too much debt. After the 1986 reforms, credit card debt grew much more slowly and the savings rate stabilized.

Quote:
Originally Posted by mackinac81 View Post
Tax interest was once tax deductible? Wow. A lot of people could use that now as they try to pay off their debt, couldn't they?
The only problem with your theory is that encouraging even more consumer debt would have made the current problem much, much worse.
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Old 07-02-2011, 03:57 PM
 
Location: Oxygen Ln. AZ
8,286 posts, read 10,090,110 times
Reputation: 4411
Quote:
Originally Posted by RVAtoCNC View Post
...for me personally. In 1986, my wife and I were in debt up to our eyeballs - we earned very little, had to rent because we could not afford 15% interest on a mortgage, we had a new baby, and were mightily struggling and miserably in debt, but we looked forward to being able to deduct our huge credit interst every year. So what does Mr. Tax Cut Reagan do? sign the biggest tax increase in the history of my existence by abolishing the deduction on credit interest. I lean conservative in most areas, and liked Reagan generally, but could never forgive him for this screw-job - so when I hear Republicans now (I am one) screaming for continued tax breaks for the rich, you know what I think? - Screw em and tax em.!!!
Well wait until Obama takes away the home mortgage interest deduction which will trump Reagan. Reagan led the way to prosperity as well. We were struggling under that nut Carter with 17 3/4 percent interest on our little box of a house and losing job after freaking job, just like today's business environment. When we could refinance our home down to 12 % we were in heaven, then down to 9% so we could actually eat. But like a lot of young people we too ran up credit card debt and what is the lesson there I ask?
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