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Old 08-26-2018, 10:12 AM   #41
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Check out the subsidies to agriculture. They are massive.
Agreed, and well targeted.

My guess is that organic broccoli farmers get little subsidy, while corn, soy and wheat farmers get a bundle. Don't even get started on the price supports that sugar farmers get. It's outrageous.
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Old 08-26-2018, 10:18 AM   #42
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Originally Posted by ivinsfan View Post
Education...

Arts and Culture

Health and Health Insurance

any and every special interest group that has a lobbyist in DC..

I'm sure I've forgotten a few....

and when you link to the Washington Post you lose your creditability to me anyway...
I know what you mean; WAPO has only 65 Pulitzer Prizes.

But, the NYT has 125 Pulitzer Prizes so, here’s a link from them.

https://www.nytimes.com/2006/10/08/b...religious.html

Seriously though, it would be informative if you quantified & provided backup links for the “Arts & Culture” and “Health & Health Insurance” subsidies you listed.
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Old 08-26-2018, 10:21 AM   #43
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Raisin producers got a price support, in the form of product confiscation if they produced too much.

Hard to believe, but it was only in 2015 that this policy was stopped when a raisin farmer couldn't hack it no more and took it to the Supreme Court.

Crazy stuff that's hard to believe.

Quote:
The Supreme Court ruled on Monday that the government can't force raisin farmers to give up part of their annual crop for less than it's worth, a victory for conservative groups that hailed the decision as a win for private property rights.

The justices ruled 8-1 that a 1940s-era program born out of the Great Depression is unconstitutional because it allows federal officials to seize personal property from farmers without fully compensating them, even though the goal is to benefit farmers by stabilizing market prices.
See: Supreme Court: Government seizure of raisins is unconstitutional - Chicago Tribune.
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Old 08-26-2018, 10:25 AM   #44
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Apart from any corruption of the program on the part of lobbyists and/or the political class, what should be of equal concern are the existence of "food deserts" in both poor urban and rural communities.
I agree with what you say about food deserts. I think it is a chicken and egg problem. The deserts often have bodegas that sell the poor quality food desired in the area and currently reimbursed by SNAP. In other words, if people were buying broccoli instead of chips, the stores would stock broccoli. IMO, a properly designed SNAP program, would encourage local vendors to stock the healthier reimbursed items (or they would lose subsidized sales). There would be less money to stock shelves with the unhealthier items. An unintended consequence of the current SNAP program may in fact be the creation and subsidization of food deserts. Money floods in with no requirement to stock or purchase healthy food.

Great discussion. It is a problem that should be within our reach to solve with current spending.
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Old 08-26-2018, 10:33 AM   #45
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While I agree with what you say, it doesn't bother me to the extent of being a thorn in my side. The problem is that many SNAP recipients would have no earthly idea how to cook fresh and frozen veggies and fruit, potatoes, rice, beans, meat and fish.... DW used to be a WIC nutritionist and experienced this first hand... so if we were to limit SNAP to healther choices we would need to accompany it with coaching on how to cook.
Agreed. My DM did similar work for a couple of summers (off from teaching). She ran into the same problems, inability to fix healthy meals and create a food budget. I remember her saying "her clients would eat better than we did the first two weeks of the month and then have no food money for the rest of the month". Yes, coaching/life skills needs to be a part of the program (It may still be IDK).
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Old 08-26-2018, 10:52 AM   #46
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I agree with the comment previously that the tax exempt status of churches should be matched with transparency similar to 501(c)3s.... Form 990. I've been treasurer for two small 501(c)3's and the tax forms aren't hard to fill out. (In one case it was a postcard because we were under $30k/year). I've been skeptical about the tax exempt status of churches since the 90's when I lived across the street from the place that Terry Cole Whitaker broadcast her sermons from. Their motto was "prosperity is your divine right". Needless to say it was run as a for profit endeavor playing on people's greed. Yet they were tax exempt. Scientology had a many year battle with the IRS over their tax exempt status because of their model of charging followers for services in a for profit style. If a church is given tax exemption they should be required to report how much they brought in, how much the officers paid, etc.

I claim child tax credits, but it was my choice to have children. I claim ACA premium tax credits. I wish the ACA could be redone to address the ridiculous price increases year after year. The PTCs barely make my High Deductible w HSA plan affordable - especially when compared to my silver equivalent COBRA (so full rate) employer plan. I have less insurance (high deductible) with premium tax credits, but pay as much as I did when I first retired and was paying COBRA.

Real estate mortgage interest deductions is a subsidy that should be phased out in my opinion. I read somewhere that we are the only western nation that does this. It encourages people to take on debt and maintain debt because of the tax deductions on the interest. Remove that subsidy and let the market and math decide to whether to take on real estate debt.
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Old 08-26-2018, 11:46 AM   #47
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I think people who give away their money and use Medicaid are terrible also. It is a safety net for people in need. That is why Medicaid looks back now and I think it is 5 years. When I was a guardian for a good friend we ended up needing it when her level of care doubled the price and her money was gone. They did allow me to prepay her cremation, etc which was nice.
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Old 08-26-2018, 12:16 PM   #48
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...

Excerpt from a 2018 report by Urban Science on Barriers to Food Security:

"In a number of recent studies, researchers document that food insecurity and hunger are a substantial and persistent problem in the United States. In 2010, 14.5% of American households were food insecure at some point during the year, and 5.4% had very low food security—meaning that the “food intake of one or more household members was reduced and their eating patterns were disrupted at times during the year because the household lacked money and other resources for food." ....
I have a real problem with any statistic that uses "food insecurity" as any sort of measure - there appears to be so much wiggle room in that description, it seems almost meaningless to me. From the USDA:

Quote:
Food Insecurity

Low food security
(old label=Food insecurity without hunger): reports of reduced quality, variety, or desirability of diet. Little or no indication of reduced food intake.
So is our household labeled "food insecure" if we choose the T-Bone steak that was on sale for $8.99/#, instead of the $18.99/# prime rib-eye I was salivating over? And DW made that same choice two weeks ago, so I guess we can report a "reduction in the quality, variety, and desirability of diet."

And any member of the household "some time during the year"? I'm sorry, but that seems to trivialize what might be a real problem for some people. Which makes it counter-productive, like the boy who cried "wolf".

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Old 08-26-2018, 12:30 PM   #49
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I agree with the comment previously that the tax exempt status of churches should be matched with transparency similar to 501(c)3s.... Form 990. I've been treasurer for two small 501(c)3's and the tax forms aren't hard to fill out. (In one case it was a postcard because we were under $30k/year). I've been skeptical about the tax exempt status of churches since the 90's when I lived across the street from the place that Terry Cole Whitaker broadcast her sermons from. Their motto was "prosperity is your divine right". Needless to say it was run as a for profit endeavor playing on people's greed. Yet they were tax exempt. Scientology had a many year battle with the IRS over their tax exempt status because of their model of charging followers for services in a for profit style. If a church is given tax exemption they should be required to report how much they brought in, how much the officers paid, etc.
Right on, rodi.

I was treasurer for a faith based organization that was NOT a church. So, we had to file 990. Not only that, our finances were under 50k, so we could have filed with a postcard. (It has been bumped to 50k in recent years.) That said, our board decided to fill out the 990-EZ which details much more information. We have nothing to hide, and they wanted the world to know that, especially our donors.

These sketchy "churches" give all the others a bad name and it is causing a lot of problems.
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Old 08-26-2018, 01:00 PM   #50
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There is a lot of food insecurity in the central valley. That's why I support the Second Harvest Food Bank.
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Old 08-26-2018, 01:28 PM   #51
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3. What I’d change: Spousal SS benefits for non-working spouses (50% of PIA) are overly generous & should be reduced; divorcee SS benefits should be limited to one ex-spouse;
I agree. But, I can't see stay-at-home spouses getting no SS benefits.

What I'd do: While people are married, split their earnings. If one earns $80k and the other $20k, then SS will use $50k for each of them for that year.

This eliminates lots of complex rules about years married before divorce, which of your exes is now alive or dead, etc.

I provides reasonable equity between single and married people.
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Old 08-26-2018, 01:41 PM   #52
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2. I agree with the overarching policy to incentivize home ownership because I believe it benefits communities and families, which support a stable society.
I'll agree there is some benefit in terms of "stable" communities. I also think there are detriments in terms of a less mobile workforce and more NIMBY activity.

Our current tax deduction is remarkably inefficient in encouraging home ownership. Most of the money goes to high income people who would have bought houses without the deduction, the only difference is that they bought a bigger house with it.

I'd prefer eliminating all subsidies for home ownership.
If we must keep some, I'd move it out of the income tax and loan guarantees and into easy-to-see subsidies that clearly help first time, marginal buyers. Maybe a once-in-your-life interest free loan of $20,000.
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Old 08-26-2018, 01:47 PM   #53
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3. What I’d change: I would revoke the tax-exempt status of all religious organizations, and force them to establish clearly separate entities to perform their charitable work, for which they would be treated the same as all other charitable organizations.
I agree.

I've used the tax deduction for religious contributions most of my life. But, I think it is bad public policy. Some people want to join a bowling league, others a church. Neither should get a tax deduction for the money they spend on membership.

The gov't should not be in the business of making rules for which organizations are "acceptably" religious.
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Old 08-26-2018, 02:00 PM   #54
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I want the other people's kids to grow up to be good citizens and workers to pay into the SS fund for me to enjoy my retirement.

I do not want them running around vandalizing my property and my cars.

So, I will pay to educate them, as long as the money is reasonable and well-spent.
+1

I do not see public education as a subsidy to parents, but as an investment in the generation that will (hopefully) support me.
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Old 08-26-2018, 02:07 PM   #55
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I want the other people's kids to grow up to be good citizens and workers to pay into the SS fund for me to enjoy my retirement.

I do not want them running around vandalizing my property and my cars.

So, I will pay to educate them, as long as the money is reasonable and well-spent.
+1 education is an investment in society, which is why people with an without children pay for it.

It is the "well-spent" part that is troublesome.... I don't think that we get the value and outsomes are commensurate with what we spend on education.
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Old 08-26-2018, 02:14 PM   #56
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For me it is quite simple. Subsides should go to people not corporations. As of today corporations do not vote (admittedly they do indirectly with money) and should not be the primary consideration of our legislative heroes.
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Old 08-26-2018, 02:18 PM   #57
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Yes, just eliminate Corp income tax - that tax is just bundled into the price of products, and is a flat tax on rich/poor alike. It strikes me as so odd that many of the same people who promote a 'progressive' (mathematically) income tax also want to see increased taxes on corps, which is a flat tax on the very people they want to have progressive taxes on!
When I've searched on "incidence of corporate income tax", I find that most economists will say mostly shareholders, but also workers. I don't find them saying consumers. For example: https://economix.blogs.nytimes.com/2...te-income-tax/

But, I agree we should change the tax law. If we simply eliminate the corporate income taxes, then corporations become unlimited tax shelters. I don't like that result.

OTOH, we could give corporations full deductability of dividends paid to US taxpayers. A corporation with only US taxpayers as shareholders could completely eliminate corporate level taxes by paying all its taxable earnings out as dividends. I like that result.

(Note that most corporations in the US do not pay the corporate income tax because they file as S-corps and pass all their income through to their shareholders, who include it on their personal tax returns. We could do that for C-corps, as well.)
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Old 08-26-2018, 02:24 PM   #58
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Just remember, part of the reasoning for 0% or 15% tax qualified dividends is because those profits have already been taxed when they were earned by the corporation paying the dividend... the lower rate avoids or reduces double taxation.... so if the corporate income tax were eliminated the quid pro quo would likely be to eliminate the preferenced tax rate on qualified dividends.
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Old 08-26-2018, 02:34 PM   #59
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Just remember, part of the reasoning for 0% or 15% tax qualified dividends is because those profits have already been taxed when they were earned by the corporation paying the dividend... the lower rate avoids or reduces double taxation.... so if the corporate income tax were eliminated the quid pro quo would likely be to eliminate the preferenced tax rate on qualified dividends.
Oops, I forgot to mention that.

Yes, definitely, the tax on capital gains and dividends should be the same as the tax on ordinary income.
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Old 08-26-2018, 02:48 PM   #60
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My bottom line is that all government "subsidies" are the result of political processes. My thoughts:

Middle Class Suburbia - Huston55, I'm not exactly following your logic. FHA loans, etc. are fully available to urbians. I think you are really talking about ownership versus rental.

Mortgage/home ownership - my issue here is that our landlords (a few of which are here) get a break because interest is a business expense for them. It seems to me that the mortgage deduction is simply equalizing with rental properties so borrowing money to purchase real estate is treated the same in both cases. Otherwise rentals would be subsidized and ownership discouraged. And owners don't get to "deduct" maintenance and repairs like rental properties do!

Children - I've always looked at school taxes two ways. One is that you are simply reimbursing society for your own education. Or you are contributing to educating the future taxpayer who will support you (and not be a vagrant/vandal/criminal).

Religion - I'm a believer in the First Amendment (and all the others too!) but agree that there are issues with how churches (especially megachurches) and contributions to them are handled in the tax code. I kind of like the discussion here about 503(c) charitable works being exempt. But I worry that our politicians would try to influence religion through the tax code.

Agriculture - I agree that political giveaways like farm subsidies/price supports should go (though say Federal crop insurance might be reasonable). I'm kind of surprised that they have held on this long, farm political power is a fraction of what it was. But then there is Iowa in the primaries...

Corporate - This one generates a ton of confusion. I'll start out with saying that IMO corporate income tax rate should be zero. As I've said before, corporations do not pay taxes. They only collect them from customers, owners or employees (there is no other source) and remit them to the government. It is much better to collect taxes directly from those people (aka voters, aka taxpayers). Hiding taxes from voters (corporate taxes, excise taxes, tariffs, VAT) is what politicians love to do.

As an aside, a lot of the confusion I see comes from people thinking corporate income tax is similar to personal income tax. It is not. For tax purposes corporate "income" is actually profit, or revenue minus expenses, while personal income is, for all practical purposes, just revenue from which you get some politically negotiated deductions. A lot of what are called subsidies are various arcane rules defining expenses, which are necessary when you are taxing revenue-expenses. If personal income taxes were like corporate income taxes you would only pay on your savings.

So in my world corporate income tax would be zero, dividends would be ordinary income, capital gains would be ordinary income indexed to inflation, paying employee health insurance would be neutral tax-wise to the corporation and employee (vice paying it as salary), the government would not be penalizing profitable companies / subsidizing money-losing companies, and about a million rules about business expenses (not "deductions" btw, that is a personal income tax term) would go away as would all the political payoffs surrounding them.

If we must tax the economic activity of corporations, I'm more in favor of a gross receipts tax. Corporate receipts/revenue is much less subject to financial and political shenanigans than income; it gets the government out of the winners/losers game that profit-based tax entails; and the actual rate could be very low - in my estimation maybe 1% to replace existing corporate income tax revenue. The whole "what is a legit business expense" and Schedule C wouldn't go away, you would still need to translate corporate income to the owners' personal tax returns. But it would be a start.

Oh, and I want my ACA subsidy next year
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