Some taxpayers subsidizing others' lifestyles

[Monkeyleg]

I was thinking about all of the programs and policies of the last few years that have some taxpayers subsidizing the homes, cars and lifestyles of others, even others who are better off financially.

As I started thinking about the tax code, and simplifying it, I thought about the flat tax, and the complaint that the flat tax would eliminate the mortgage tax and mortgage interest deductions.

It then hit me that people who live in low property tax states, or in states with modest home prices, are effectively subsidizing the mortgages of those in high tax states and high home price states.

If someone lives in a State A, where a comparable house costs twice as much as in State B, that person is probably going to be paying more in interest. That person is also going to get a larger deduction for that interest, thus reducing the amount of taxes he's paying into the treasury. That reduction is offset by increased tax rates for everyone. Thus the person in State B is paying more in taxes to offset the deduction of the person in State A.

It's likewise with property taxes. The homeowner who lives in New York will have a larger property tax deduction than will a homeowner in Arkansas, even on homes that cost the same.

Now I like the idea of a flat tax.

[Tallpine]

There's a tax on flat tires, now   




Flat tax is okay, but you still have to determine income - like what is and isn't a business deduction.

[Jamisjockey]

I was thinking about all of the programs and policies of the last few years that have some taxpayers subsidizing the homes, cars and lifestyles of others, even others who are better off financially.

As I started thinking about the tax code, and simplifying it, I thought about the flat tax, and the complaint that the flat tax would eliminate the mortgage tax and mortgage interest deductions.

It then hit me that people who live in low property tax states, or in states with modest home prices, are effectively subsidizing the mortgages of those in high tax states and high home price states.

If someone lives in a State A, where a comparable house costs twice as much as in State B, that person is probably going to be paying more in interest. That person is also going to get a larger deduction for that interest, thus reducing the amount of taxes he's paying into the treasury. That reduction is offset by increased tax rates for everyone. Thus the person in State B is paying more in taxes to offset the deduction of the person in State A.

It's likewise with property taxes. The homeowner who lives in New York will have a larger property tax deduction than will a homeowner in Arkansas, even on homes that cost the same.

Now I like the idea of a flat tax.

This is why the 16th was a foolish endevour and should be abolished immediately.  Each state should pay a tribute to run the federal government.  I shouldn't be writing checks to uncle sam to keep public schools in a failing state afloat.

[Boomhauer]

Fair Tax. It's the solution to what we need.

Of course, something like that will never get codefied into law, for the IRS is too strong and the federa government loves it far too much.

[P5 Guy]

I OWN my property and have no interest to deduct. This year I filed a 1040EZ again. Only the "STANDARD" deduction for me, again. I've been supporting others' lifestyles for years and have not been happy about this

Minimal flat tax on income with no deductions, period, as tribute to our corporate masters . I hate paying for stuff for others with no return on my investment.

[Levant]

Flat tax and no welfare of any kind - not for Wall Street, GM, or Chrysler and not for my neighbors or my children.

No fault of their own but my children all get between six thousand and nine thousand dollars back in their tax returns that the amount of taxes withheld.  I've asked them all for my money back but they just laughed.