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IMO i think alot of people know it doesn't "trickle down", They just want an excuse to cut taxes for the wealthy
They broke economics, particularly when they came up with the term. Macro economics is political economy. It is much so they fail to come up a term for it which the public recognizes as crony capitalism. We all know instinctively you can make investments which make nothing, or even destroys prosperity. That is otherwise known as anticompetitive behavior and it takes money to do it.
The licensed professional has the same living options as a burger flipper, i.e. can choose to have the same non-housing consumption as the burger flipper.
The licensed professional's ability to own his home affords him the ability to enjoy the same consumption as the burger flipper AT A LOWER COST. (Of course, he also has the option of spending the same amount on living expenses as the burger flipper, and enjoying greater consumption than the burger flipper.)
Before you laugh, I personally know a retired architect who owns his home free and clear and enjoys rental income by renting out his spare bedrooms. I have also known several others who bought homes and lived in them for free by renting out spare bedrooms and collecting rental income.
Why do you want to gouge burger flippers?
Everybody can own their own home, those that have more to spend can spend more. Instead of a $200K house the burger flipper can buy a $50K house or can get a second job and buy a $80K house. I personally know an Albanian immigrant that works two jobs and has his own house; there is no way he makes more than $60K.
Quote:
Originally Posted by freemkt
Massive upward redistribution from renters to homeowners.
Everybody pays an economic "rent" for housing. In some places it is actually cheaper to rent than to buy and each person has to do their own analysis to determine what is best for them. For example, if you want to live in a certain neighborhood and the rent is $700/month, but you can buy for $1200/month. It probably isn't worth it to purchase. The extra $500/month plus maintenance costs would be better spent in the stock market. However, if rent is $900/month and a mortgage is $400/month it might be better to buy.
Everybody pays an economic "rent" for housing. In some places it is actually cheaper to rent than to buy and each person has to do their own analysis to determine what is best for them. For example, if you want to live in a certain neighborhood and the rent is $700/month, but you can buy for $1200/month. It probably isn't worth it to purchase. The extra $500/month plus maintenance costs would be better spent in the stock market. However, if rent is $900/month and a mortgage is $400/month it might be better to buy.
The FairTax plan is redistribution on top of the economic "rent" we all pay for housing.
Homeowners would enjoy untaxed housing consumption, while renters would be fully taxed on their housing consumption.
Imagine a homeowner paying $10K/yr in mortgage payments and a renter paying $10K/yr in rent. The renter would pay thousands of dollars more tax than the homeowner, and would probably tilt the playing field in favor or owning.
The licensed professional has the same living options as a burger flipper, i.e. can choose to have the same non-housing consumption as the burger flipper.
The licensed professional's ability to own his home affords him the ability to enjoy the same consumption as the burger flipper AT A LOWER COST.
No. The costs for the same consumption would be the same.
I personally know a retired architect who owns his home free and clear and enjoys rental income by renting out his spare bedrooms. I have also known several others who bought homes and lived in them for free by renting out spare bedrooms and collecting rental income.
Why can't the burger flipper do the same? Buy a house and rent out the bedrooms.
If the burger flipper can't do that, the burger flipper needs to re-evaluate the bad life and financial decisions the burger flipper has made that resulted in his current predicament.
No. The costs for the same consumption would be the same.
??? Burger flipper rents a room in a house. Burger flipper enjoys $500/mo housing consumption and $500/mo nonhousing consumption.
Licensed professional owns her home, rents out spare bedrooms to live in house for free. Enjoys $500/mo housing consumption (cost = zero) and $500/mo nonhousing consumption.
Licensed professional enjoys consumption equal to burger flipper, at $500/mo lower cost.
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