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Subsidies - What Do You Think?
Old 08-25-2018, 10:51 AM   #1
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Subsidies - What Do You Think?

There are many threads, or portions of them, here which discuss (support or deride) subsidies, often with accompanying arguments for one side or the other, and also frequently with very informative links where many of us learn something new. I’d like to see if we can have a thread discussing “Subsidies” that we see/experience without getting into politics or vitriol....or Porky. I think it would be informative and (at least for me) educational.

Let’s start with a definition: A subsidy is a form of financial aid or support extended to an economic sector (or institution, business, or individual) generally with the aim of promoting economic and social policy. (Wikipedia)

How we view ‘subsidies’ of one kind or another seems to usually depend on whether we’re on the paying or receiving end or, although less frequently, whether we think the subsidy is fair and/or provides more good than harm. After all, we’re not all completely selfish. ;-)

So, what subsidies are significant in your view, and what do you think we should do about them? When describing particular subsidy(s), please try to include the following information so we can understand your position, learn something and, maybe even be swayed toward your line of thinking: (1) Description, (2) Whether you agree/or not with the subsidy & why, (3) What you would do instead (modify, eliminate, etc.) and, (4) References and/or links to more in depth material.

I’ll start with a few on my list:

* We all subsidize middle class suburbia:
1. Largely through tax and insurance incentives via the FHA, FNMA & FHLMC
2. I agree with the overarching policy to incentivize home ownership because I believe it benefits communities and families, which support a stable society.
3. What I’d change: I would continue the policy of tax and insurance incentives but, would ensure that urban & suburban areas are treated equitably. I would also incorporate incentives for sustainable, environmentally friendly development into future policies.
4. https://www.theamericanconservative....ized-suburbia/

* Childless couples subsidize couples with children, and singles subsidize them both; largely through SS, Income tax, property tax but, also in commerce & employment.
1. The tax code is the primary vehicle which financially subsidizes/encourages marriage but, companies & employers also discriminate against singles. The income tax burden for married couples is significantly lower than for singles; married couples also receive substantial Social Security (OASDI) benefits that are not available to singles (spousal benefits, survivor benefits & divorcee benefits); One of the largest consumers of property taxes is public schools which benefit families with children but, those without children pay the same property tax.
2. I agree with the concept of encouraging & subsidizing the development and education of children because they’re essential to our future; I agree that marriage (including same sex couples) should be encouraged because I think it is beneficial to a society (call me old fashioned). But, I think there’s currently an imbalance to the detriment of single people (especially) & childless couples, which needs to be fixed
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; there should be more equity in the ‘total benefits’ packages of employees, regardless of marriage or parental status; single/married tax brackets should be adjusted to narrow the gap/benefit to married couples.
4. https://money.usnews.com/money/blogs...ocial-security.
https://amp.businessinsider.com/imag...0f-960-662.jpg
https://www.thedailybeast.com/single...inated-against

* The non-religious subsidize the religious & everyone subsidizes religious organizations to which they do not belong.
1. Religious organizations enjoy tremendous financial benefit through their treatment as non-profit organizations and via the tax code.
2. I disagree with this and believe that it is a violation of the Establishment Clause of the US Constitution. (Note that this is my personal opinion and, while I might currently be in the minority, I have good company from some of the most respected Supreme Court Justices in history.) Subsidies to religion in the US total >$80 Billion in lost tax revenue annually, which the rest of us have to make up.
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.
4. https://www.washingtonpost.com/news/...=.8281c6f50347
https://churchesandtaxes.procon.org

Looking forward to reading & learning about various views on this frequently discussed topic and, remember, “you can keep your polite hat on.”
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Old 08-25-2018, 11:47 AM   #2
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Interesting topic - I don't have time for a full reply now, but to kick things off, I agree with you on revoking (gradually over time, to allow them to adjust) the tax exempt status of religious organizations. Even though I am non-religious myself, I say this because I think it would benefit those religious organizations.

I think we all agree that religion and state should be separate, and to do that, you, ummm... need to do that! As long as they have tax exempt status, the waters are muddied, and the state is involved. Cut the cord.

Thanks for the links, will check them out later.

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Old 08-25-2018, 01:50 PM   #3
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I want to keep all the good subsidies I currently receive. Because I helped pay for them gosh darn it!

All those other subsidies that I don't currently get only go to lazy good-for-nothings and should be eliminated immediately. Until I qualify for those same benefits, at which point they should be immediately reinstated. Because I helped pay for them gosh darn it!

<this seems to summarize the mentality of most people>
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Old 08-25-2018, 02:16 PM   #4
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Everyone is likely to dislike some form of income redistribitution. The question is whether we can accept the forms we might dislike in order to have those we desire.


Consider benefits for uniformed personnel and a broad safety net for the poor. As these two subsidies are strongly identified with opposite sides of the red/blue divide I suspect there are many who fully support one, but would be happy to see the other largely eradicated. The question is whether we as a society can accept that both have sufficient benefit to pay for them willingly. Or will we make it our long term project to eliminate the one we dislike and demonize those who support it.
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Old 08-25-2018, 02:23 PM   #5
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It all comes down to the classic question "Whose ox is being gored?"
Isn't that something basic taught in law schools?

I don't see any way to respond in a neutral manner to the question here -- any example will have some on one side and some on the other.
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Old 08-25-2018, 02:23 PM   #6
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On your reference to SS subsidization, once the numbers flow through the formula, the tax for singles starts at 25k, while for married it is at 34k (not at 50k).
I think the offshoring of income should be looked at more closely.
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Old 08-25-2018, 02:31 PM   #7
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By definition a subsidy is aid, or a sum paid to an individual or organization. It is not a tax deduction for expenses to run a business.
As far as religious organizations, the state must keep their tax laws from interfering with them or they will be able to influence them through tax laws, violating the freedom we have to worship as we wish. There is no establishment of religion with the state forcing people to worship in a particular faith just because religious organizations don’t pay taxes.
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Old 08-25-2018, 02:50 PM   #8
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Quote:
Originally Posted by Huston55 View Post
3. What I’d change: Spousal SS benefits for non-working spouses (50% of PIA) are overly generous & should be reduced;
I don't consider that a subsidy at all. It's an earned benefit by the PIA and was part of the original payout formula. Now if they want to increase the PIA's payment by 50% and eliminate the non contributing spousal benefit, then that would be okay.
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Old 08-25-2018, 03:22 PM   #9
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The list is too long to go thru everything in detail but here are a few: I believe that a church(religious entity) is a business and should be taxed like a business. They currently receive a massive subsidy and should not. I think the tax breaks that people receive solely because they have kids should go away. If the population was low and theywanted to encourage people having more kids then maybe it would make sense but there is no lack of population in the US. Any and all tax breaks(subsidies) to large corporations should go away. Companies that profit billions don't need a tax break. That should be obvious. Those are just a few of many examples.
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Old 08-25-2018, 03:29 PM   #10
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Originally Posted by aaronc879 View Post
I believe that a church(religious entity) is a business and should be taxed like a business. They currently receive a massive subsidy and should not.
+1

Quote:
Originally Posted by aaronc879 View Post
I think the tax breaks that people receive solely because they have kids should go away. If the population was low and theywanted to encourage people having more kids then maybe it would make sense but there is no lack of population in the US.

+1 or 2

Quote:
Originally Posted by aaronc879 View Post
Any and all tax breaks(subsidies) to large corporations should go away. Companies that profit billions don't need a tax break.

Maybe, but sometimes the business segment/area for the government subsidy is not where they are making the big money.
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Old 08-25-2018, 03:48 PM   #11
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I believe if you want to get mad about subsidies, do some investigation into Corporate ones, and then you'll have something to really get PO'd about.

Subsidies that help people with basic needs, housing, families, food, health, support the elderly, armed forces? That's a good society in my book, and I'm not going to quibble with line items in those.
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Old 08-25-2018, 04:02 PM   #12
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I believe if you want to get mad about subsidies, do some investigation into Corporate ones, and then you'll have something to really get PO'd about.

Subsidies that help people with basic needs, housing, families, food, health, support the elderly, armed forces? That's a good society in my book, and I'm not going to quibble with line items in those.
Agreed. Tax breaks (AKA subsidies) on corporations are crazy. Amazon profits billions and pays nothing or near nothing in taxes. Something is very wrong with that. Many of it's employees make poverty wages and still pay some federal tax. Some employees get paid so little they have to go on food stamps and other subsidies. Basically Amazon is getting subsidies to supplement their employees wages all while th company is worth hundreds of billions and makes billions in profit every year. Not ok.
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Old 08-25-2018, 04:42 PM   #13
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Check out the subsidies to agriculture. They are massive.
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Old 08-25-2018, 05:26 PM   #14
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I always felt like I subsidized the city we had our vacation home in.Pay full taxes, go over once a month. No kids in school, less driving on the roads, no police services.
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Old 08-25-2018, 05:39 PM   #15
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Quote:
Originally Posted by Aerides View Post
I believe if you want to get mad about subsidies, do some investigation into Corporate ones, and then you'll have something to really get PO'd about.

Subsidies that help people with basic needs, housing, families, food, health, support the elderly, armed forces? That's a good society in my book, and I'm not going to quibble with line items in those.
+1
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Old 08-25-2018, 05:48 PM   #16
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As far as religious organizations, the state must keep their tax laws from interfering with them or they will be able to influence them through tax laws, violating the freedom we have to worship as we wish. There is no establishment of religion with the state forcing people to worship in a particular faith just because religious organizations don’t pay taxes.
Then it seems reasonable to me that if religious organizations want the state to stay out of their business while at the same time receiving incredibly generous tax exemptions, then the price they must pay for that exemption should be a prohibition from involving themselves in and attempting to influence public policy.
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Old 08-25-2018, 06:20 PM   #17
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Originally Posted by Huston55 View Post
There are many threads, or portions of them, here which discuss (support or deride) subsidies, often with accompanying arguments for one side or the other, and also frequently with very informative links where many of us learn something new. I’d like to see if we can have a thread discussing “Subsidies” that we see/experience without getting into politics or vitriol....or Porky. I think it would be informative and (at least for me) educational.

Let’s start with a definition: A subsidy is a form of financial aid or support extended to an economic sector (or institution, business, or individual) generally with the aim of promoting economic and social policy. (Wikipedia)

How we view ‘subsidies’ of one kind or another seems to usually depend on whether we’re on the paying or receiving end or, although less frequently, whether we think the subsidy is fair and/or provides more good than harm. After all, we’re not all completely selfish. ;-)

So, what subsidies are significant in your view, and what do you think we should do about them? When describing particular subsidy(s), please try to include the following information so we can understand your position, learn something and, maybe even be swayed toward your line of thinking: (1) Description, (2) Whether you agree/or not with the subsidy & why, (3) What you would do instead (modify, eliminate, etc.) and, (4) References and/or links to more in depth material.

I’ll start with a few on my list:

* We all subsidize middle class suburbia:
1. Largely through tax and insurance incentives via the FHA, FNMA & FHLMC
2. I agree with the overarching policy to incentivize home ownership because I believe it benefits communities and families, which support a stable society.
3. What I’d change: I would continue the policy of tax and insurance incentives but, would ensure that urban & suburban areas are treated equitably. I would also incorporate incentives for sustainable, environmentally friendly development into future policies.
4. https://www.theamericanconservative....ized-suburbia/

* Childless couples subsidize couples with children, and singles subsidize them both; largely through SS, Income tax, property tax but, also in commerce & employment.
1. The tax code is the primary vehicle which financially subsidizes/encourages marriage but, companies & employers also discriminate against singles. The income tax burden for married couples is significantly lower than for singles; married couples also receive substantial Social Security (OASDI) benefits that are not available to singles (spousal benefits, survivor benefits & divorcee benefits); One of the largest consumers of property taxes is public schools which benefit families with children but, those without children pay the same property tax.
2. I agree with the concept of encouraging & subsidizing the development and education of children because they’re essential to our future; I agree that marriage (including same sex couples) should be encouraged because I think it is beneficial to a society (call me old fashioned). But, I think there’s currently an imbalance to the detriment of single people (especially) & childless couples, which needs to be fixed
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; there should be more equity in the ‘total benefits’ packages of employees, regardless of marriage or parental status; single/married tax brackets should be adjusted to narrow the gap/benefit to married couples.
4. https://money.usnews.com/money/blogs...ocial-security.
https://amp.businessinsider.com/imag...0f-960-662.jpg
https://www.thedailybeast.com/single...inated-against

* The non-religious subsidize the religious & everyone subsidizes religious organizations to which they do not belong.
1. Religious organizations enjoy tremendous financial benefit through their treatment as non-profit organizations and via the tax code.
2. I disagree with this and believe that it is a violation of the Establishment Clause of the US Constitution. (Note that this is my personal opinion and, while I might currently be in the minority, I have good company from some of the most respected Supreme Court Justices in history.) Subsidies to religion in the US total >$80 Billion in lost tax revenue annually, which the rest of us have to make up.
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.
4. https://www.washingtonpost.com/news/...=.8281c6f50347
https://churchesandtaxes.procon.org

Looking forward to reading & learning about various views on this frequently discussed topic and, remember, “you can keep your polite hat on.”

I'd be interested in you telling me anything the government doesn't subsidize...let me know when you think of something....
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Old 08-25-2018, 06:29 PM   #18
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Does the government subsidy Robbie's Wagyu beef?

If they do, they do not do a good job because it still costs a lot.

They don't subsidy my French imported XO Cognac either. In fact, I think they tax it too much.
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Old 08-25-2018, 06:54 PM   #19
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They don't subsidy my French imported XO Cognac either. In fact, I think they tax it too much.
US Navy and coast guard = subsidies. It's cheaper to ship a bottle from France to the US because the risk of loss of the cargo due to piracy and privateers is pretty low thanks to our military patrolling the high seas and coastal waters.

On behalf of my fellow American taxpayer, cheers!
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Old 08-25-2018, 07:23 PM   #20
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Originally Posted by Aerides View Post
I believe if you want to get mad about subsidies, do some investigation into Corporate ones, and then you'll have something to really get PO'd about.

Subsidies that help people with basic needs, housing, families, food, health, support the elderly, armed forces? That's a good society in my book, and I'm not going to quibble with line items in those.
I see no reason to pit one against the other. They can/should each be evaluated on their own merits. I think safety nets are good, obviously the devil is in the details.

Quote:
Originally Posted by aaronc879 View Post
Agreed. Tax breaks (AKA subsidies) on corporations are crazy. Amazon profits billions and pays nothing or near nothing in taxes. ...
I googled a bit, and I will just say the the case with Amazon is complicated (*which is another reason I think corps should not be taxed on income - more below). But in general, much of the outrage over xyz corp not paying taxes, is due to previous years carryover losses. And if we are going to tax income, you really do need to allow for loss carryover.

* 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!

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