Upper-Income Americans Would See Deductions Cut on Charity and Mortgage Interest

A

Anonymous_IHB

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That can't be helpful for people already struggling with their jumbo loan payments...



$318 Billion Tax Hit Proposed: Upper-Income Americans Would See Deductions Cut on Charity and Mortgage Interest

<A href="http://online.wsj.com/article/SB123559630127675581.html#identifier">http://online.wsj.com/article/SB123559630127675581.html#identifier</A>
 
Doesn't it seem counterproductive to take more money from the people who can actually put it back into the economy? how exactly are these clandestine tax increases stimulative?
 
[quote author="2dogs1cup" date=1235658351]Doesn't it seem counterproductive to take more money from the people who can actually put it back into the economy? how exactly are these clandestine tax increases stimulative?</blockquote>


It does, until you consider that they are the only ones who have the capacity to pay. That doesn't make it right, but it is true. Further, look at the multiplier effects of lower income taxes vs, oh, say, food stamps?



<img src="http://www.econbrowser.com/archives/2008/10/zandi.gif" alt="" />
 
Deja vu???



Isn't this what happened during the Hoover administration. Isn't massive government spending followed by tax hikes what hung the economy during the Great Depression?
 
[quote author="2dogs1cup" date=1235658351]Doesn't it seem counterproductive to take more money from the people who can actually put it back into the economy? how exactly are these clandestine tax increases stimulative?</blockquote>


On top of that....the $250k above crowd will lose any incentive to buy a new home...oh oh...seems like higher end homes just got some downside momentum to me.
 
[quote author="optimusprime" date=1235698588][quote author="2dogs1cup" date=1235658351]Doesn't it seem counterproductive to take more money from the people who can actually put it back into the economy? how exactly are these clandestine tax increases stimulative?</blockquote>


On top of that....the $250k above crowd will lose any incentive to buy a new home...oh oh...seems like higher end homes just got some downside momentum to me.</blockquote>


It occurs to me; will this encourage charitable giving?



Oh heck, we do not need charity anymore. The government will now take care of everything.
 
[quote author="Mcdonna1980" date=1235698439]Deja vu???



Isn't this what happened during the Hoover administration. </blockquote>


No, and no.



<blockquote>Hoover?s fiscal policy accelerated the decline. In December 1929, as a means of demonstrating the administration?s faith in the economy, Hoover had reduced all <strong>1929 income tax rates by 1 percent because of the continuing budget surpluses.</strong> By 1930 the surplus had turned into a deficit that grew rapidly as the economy contracted. By the end of 1931 Hoover had decided to recommend a large tax increase in an attempt to balance the budget; Congress approved the tax increase in 1932. Personal exemptions were reduced sharply to increase the number of taxpayers, and rates were sharply increased. <strong>The lowest marginal rate rose from 1.125 percent to 4.0 percent, and the top marginal rate rose from 25 percent on taxable income in excess of $100,000 to 63 percent on taxable income in excess of $1 million as the rates were made much more progressive.</strong> We now understand that such a huge tax increase does not promote recovery during a contraction. By reducing households? disposable income, it led to a reduction in household spending and a further contraction in economic activity.</blockquote>


<a href="http://www.econlib.org/library/Enc/GreatDepression.html">http://www.econlib.org/library/Enc/GreatDepression.html</a>



<blockquote>Obama?s 2010 budget proposal, released today, would reinstate the top two Clinton-era tax rates of <strong>36 percent and 39.6 percent, up from the 33 percent and 35 percent the richest Americans now pay</strong>. That would affect about 2.6 million taxpayers. The budget also would raise taxes on capital gains and dividends to 20 percent for top earners, up from the 15 percent set by former President George W. Bush in 2003. </blockquote>


<a href="http://www.bloomberg.com/apps/news?pid=20601070&sid=aFsqsDD7lF1Y&refer=home">http://www.bloomberg.com/apps/news?pid=20601070&sid=aFsqsDD7lF1Y&refer=home</a>



Is the Hoover 152% increase is exactly the same as the Obama 13% increase? Not on my HP17b.
 
The NAR and NAHB reaction...



Obama plans mortgage-deduction cut

<A href="http://lansner.freedomblogging.com/2009/02/26/obama-plans-mortgage-deduction-cut/15641/">http://lansner.freedomblogging.com/2009/02/26/obama-plans-mortgage-deduction-cut/15641/</A>
 
Looks like the "marginal" rich....think the $600,000 to $1M homes are going to get clocked pretty good.



I think Woodbury, Columbus Grove, Tustin Fields, and Northwood II are going to get clobbered big time.
 
[quote author="no_vaseline" date=1235713658]<blockquote>Hoover?s fiscal policy accelerated the decline. In December 1929, as a means of demonstrating the administration?s faith in the economy, Hoover had reduced all <strong>1929 income tax rates by 1 percent because of the continuing budget surpluses.</strong> By 1930 the surplus had turned into a deficit that grew rapidly as the economy contracted. By the end of 1931 Hoover had decided to recommend a large tax increase in an attempt to balance the budget; Congress approved the tax increase in 1932. Personal exemptions were reduced sharply to increase the number of taxpayers, and rates were sharply increased. <strong>The lowest marginal rate rose from 1.125 percent to 4.0 percent, and the top marginal rate rose from 25 percent on taxable income in excess of $100,000 to 63 percent on taxable income in excess of $1 million as the rates were made much more progressive.</strong> We now understand that such a huge tax increase does not promote recovery during a contraction. By reducing households? disposable income, it led to a reduction in household spending and a further contraction in economic activity.</blockquote>


<a href="http://www.econlib.org/library/Enc/GreatDepression.html">http://www.econlib.org/library/Enc/GreatDepression.html</a></blockquote>


Wow...what a load of BS. "We now understand..." If the tax increases didn't get passed until 1932, then they couldn't have possibly had any effect until the 1933 Fiscal Year, when Roosevelt was in office. Even if they were retroactive, anybody can look at the GDP numbers and see that the conclusion drawn by these asshats is completely bass ackward.

<img src="http://upload.wikimedia.org/wikipedia/commons/d/da/Gdp20-40.jpg" alt="" />
 
[quote author="optimusprime" date=1235698588][quote author="2dogs1cup" date=1235658351]Doesn't it seem counterproductive to take more money from the people who can actually put it back into the economy? how exactly are these clandestine tax increases stimulative?</blockquote>


On top of that....the $250k above crowd will lose any incentive to buy a new home...oh oh...seems like higher end homes just got some downside momentum to me.</blockquote>


Wait and see. The $250k figure will be reduced as the years go by.
 
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