"This time around, we need a bowl of hot porridge, not a cup of warm spit. If nothing else, we owe it to the grandparents, especially those stuck in states of blue."
Full time grandparents in the once great state of Minnesota are becoming a scarce commodity. Why? Don't they like their kids and grand kids? I would imagine the answer to that question would be they love them like crazy. But for some reason, the climate in Minnesota is turning very frosty towards the senior citizens who would like to spend their golden years with family and close to our forests and lakes.
Why is this so hard? What is wrong with our lawmakers who cannot see this trend developing? Good questions. I wish I had an answer. The funny thing is that Minnesota has often been referred to by some as the "land of 10,000 treatment centers." Well the biggest abusers in the state work in St. Paul. They are addicted to massive government spending. And who takes the brunt of it? Seniors. They are easy pickings, looked upon as low fruit on the tree.
If this sounds like I am going after Marx Dayton and the DFL, you win the prize - sort of. Many of our Republicans we send to St. Paul go through a metamorphosis from candidate to a spendy member of the legislature. They become "Democrat Light". How so? Take Social Security. The fact we STILL have seniors who will be impacted by paying tax on their Social Security earnings is almost immoral. This last session some seniors will get a break as the Social Security tax is means tested. However, many will not. Wisconsin could figure that out - Minnesota could not.
And now the authors in Washington of the new tax bill are going to take a shotgun approach to teach those heavily taxed states a lesson. The blue states, with their very high state and local taxes, are going to loss those deductions. And trust me, I know the arguments. I have heard them many times. "Why should the people in California pay less federal tax than then people in Texas just because Californians can deduct sky high taxes?" I get it. Trust me, I get it. The problem is, the true believer statists who work in St. Paul (or Sacramento and points beyond), will not change. Their taxes will stay high, and innocent people will get hurt.
Today in the paper the issue of cabin owners was addressed. How with the new tax bills, any mortgage interest on those cabins will no longer be deductible. However, for those who own cabins in Minnesota, there is another issue also. Many out state counties really soak cabin owners on property tax. Why? They need the revenue. Many counties have very little industry, so they need the revenue coming in from the cabin owners. If that deduction goes out the window, look for the cabin market in Minnesota to turn south faster than snow birds in November.
A good friend of mine called me yesterday and chided me a bit for throwing in with the Democrats. On what? On my criticism of losing the the SALT deduction. Sorry - did not mean to. What I did tell my good friend is simply this - if this tax bill is going to be "historic" like the 1981 Reagan tax bill, then EVERYONE needs to get tax relieve. With this tax bill as it stands right now? I am not feeling it.
This tax bill is starting to look like the fix for ObamaCare. Slam, bam, thank you (whomever), and here it is. The op/ed in the paper today cautioned the lawmakers to slow down, and get this one right. I could not agree more. This time around, the citizens need a bowl of hot porridge, not a cup of warm spit. If nothing else, we owe it to the grandparents, especially those stuck in states of blue.
I never even considered the value of mortgage interest when I purchased my home. The realtor mentioned it, but I did not include it in my analysis of PITI, and could I afford it.
ReplyDeleteSimilarly, people who purchase cabins in northern MN are not looking for additional tax deductions, they are looking at the value of having a recreational getaway for now and the future and can they afford the purchase price.
The market for cabins will stabilize, no matter what the tax implications since their is a finite number of lakefront properties and a far greater number of folks looking to own same.
The Tax Reform mess is SAD. Created behind closed GOP conference room doors, by legislators truly trying to do something significant, was totally mishandled. Don't they have any skills at all?
This legislation was screwed up by trying to pay for the corporate tax reduction side of the ledger. Look at the markets, corporations are doing great, record profits and growth. They didn't need a reduction to 25 or 20%. We don't need elimination of the estate tax. We needed a simplification of the tax codes and a larger standard deduction to make filing taxes easier.
So now the middle class, blue state taxpayers are on the hook for this pile of dung.
Have a great Sunday, Go Vikings,
David Gjerdingen
Criticizing this plan because it was "developed in secret" is pretty funny, since it was made necessary by the Democrats and their one-trick pony of lying like crazy about what's in the bill before details are known, and then lying like crazy about what's in the bill AFTER details are known.
ReplyDeleteRepublicans should fully restore what is referred to as the SALT deduction, or millions of middle-class families would end up paying higher federal income taxes, not less.
Delete"The House's so-called 'compromise' would be saying to the middle class we'll only chop off four of your fingers instead of all five." GOP's definition of compromise.
So, would you also have them set the standard deduction back to half of what it was and make people itemize the SALT? For middle class families, the std deduction is bigger than they would ever pay in SALT, and it would make filing MUCH easier.
ReplyDeleteStandard deduction increase helps me the most, as I am a senior with few deductions. And the big SALT beneficiaries are in blue states, so GOP will say F... Them! So, you are correct.l
DeleteI fail to see a reduction in filing complexity in the bill. Dividends, annuities, etc will still have me filling out long forms. Only Nebreska, many years ago, had a postcard that said, How much did you make? Multiply by 0.045 and send it in! Never going to see that again.
Difference is only, AFAIK, just in how much of Form B you have to fill out. That should include most people, actually. I still like the FAIR tax idea, where you NEVER fill out another tax form. Cuts the IRS down to a small back-room operation.
ReplyDeleteFair tax is a regressive tax...................
ReplyDeleteThe problem is that very high-income households spend only a fraction of their income, while low- and middle-income people spend all or most of what they make. A sales tax, by design, exempts a large share of income at the top.
You don't understand the FAIR tax. It is perfectly progressive on /disposable/ income, when spent. The "poor" pay nothing. It penalizes high incomes only to the degree that it supports a lavish lifestyle, which is what you envy, apparently. It does NOT penalize savings or investment or college savings or retirement accounts, which is a huge boon to the economy. Not only that, the country saves about $400 billion/year that we now spend just complying with the tax code.
ReplyDeleteStrictly speaking, sales taxes are flat, since everyone pays the same rate. But because the poor tend to spend a high percentage of their income on basic consumer goods such as food and clothing, sales taxes do require the poor to pay a higher percentage of their income in taxes
ReplyDeleteThe FairTax plan, however, helps to alleviate this difficulty by exempting sales taxes on all income up to the poverty level. Taxpayers would receive a "prebate," which is calculated to be about $5,600 annually. The Treasury Department estimates that the prebate program would cost between $600 billion and $700 billion annually, making it the largest category of federal spending.
Most Fair Tax plans would set the rate between 23 and 30 percent, on everything, including housing, medical, food, fuel etc.
Not something my pocketbook could handle.
You are still missing the essentials of the FAIR tax. First of all, your "pocketbook" would first be vastly increased because of the elimination of ALL federal taxes and withholding, and second because everybody receives the same prebate. THEN you pay sales taxes on everything you buy new retail. The idea is that once all the "hidden" taxes are taken out of the product you buy, prices come down about 23%, and then get increased by the sales tax, about 23%, and the tax is "price neutral." Where the rate is set is also expected to make it "revenue neutral" to the government. It doesn't "cost" anything because it's not the government's money, but it does SAVE the government money because the IRS and all its associated costs-- about $400 billion/year-- gets eliminated. And that is a good thing.
ReplyDeleteThanks, I'm learning a lot from you. Do you have a blog?
ReplyDeleteYou sound much to rational to be a GOP guy. Must be just the small government portion. Never get rich on the workers backs with your attitude.
Do you know who else besides Herman Cain and Rand Paul ran on a Fair Tax platform.
And why, if it is good as indicated hasn't one party or the other made it a major platform item?
Must be some rational reasons.
Dave
It actually is in the Minnesota GOP platform, and there is a standing bill in the US House, HR25, with some 60 cosponsors last I saw.
ReplyDeleteNumerous Congressional candidates have tried to run on it, but the second they do, Democrats attack it "raising taxes on the poor," "tax cuts for the rich," or a "regressive tax," ALL of which are Big Lies, pure and simple. The tax is perfectly progressive on spending above the poverty line, and those below the poverty line pay ZERO, if they spend everything they make, and actually MAKE money if they are frugal enough.
Despite the MANY advantages [elimination of the IRS and its $400Billion annual cost, no individuals file a tax form, a huge boost in economic growth, elimination of the trade deficit, huge incentives for businesses to stay/come to the US and hire, elimination of tax cheating by everybody (no loopholes), collecting taxes from illegals and from drug dealers, elimination of withholding (a huge raise for everybody) plus "automatic" Social Security reform], the reason I always hear against it is "it will never pass." That is because of the Democrats' irrational, knee-jerk opposition, and to general opposition based on eliminating at least 70% of the lobbyists in DC. After all, it is far easier to get some special interest deal slipped into the tax code by your bought-and-paid-for Representative than to actually pass a separate bill awarding your company or business group multi-millions of dollars for nothing.
After reading a few articles about the FAIR Tax, it seems that the biggest problem would be the massive challenges in implementing the actual change. IRS jobs lost, lots of temporary jobs implementing, education of taxpayers, etc.
DeleteSounds like this should be on the GOP controlled congress agenda.
I wish someone or some group had the will to push this, but ALAS, I will go to my grave without experiencing.
Again, thanks for the education,
Dave
There must be more problems than Democratic reticence to this issue. Or GOP would be doing it.
DeleteOr is this something that would hurt 45 and his wealthy cronies. I know his base wouldn't understand it, as I didn't.
DeleteThanks for listening, but when I worried about those things, the kind folks at fairtax.org straightened me out. First of all, the tax does not take effect until 3/4 of the States accept the constitutional repeal of the 16th amendment. That will take time. Second, there is an "existing inventory exception" so that when the new tax takes hold, those things already built can be sold without the tax. This is particularly important to the real estate market, because new homes will be taxed at 23%! If the things that went into those homes were bought before, with all the hidden taxes built in, new houses would be priced out of the market. Otherwise, used homes would sell for essentially the same price as the "price neutral" new ones.
ReplyDeleteYes, the IRS and tax accountants would be out of a job, but wouldn't we rather have them doing something productive?
OK, there is "more to this than Democrat reticence." There is Republican reticence (to eliminate the lobbyists' influence) and outright GOP cowardice in the face of Democrat attacks. Let's just say that it is easier and quicker to lie about the FAIR tax than it is to properly explain it.