patrick.net

Admin Says:
"We want people to be productive and earn incomes. We don’t want them to slack off and charge rent on land they did not create. The building is a different story. Fine to charge rent on a building and call it non-taxable income."

Oh no, come on man, "Slack off?" In other words there is never a point that someone becomes rich in this model and doesn't have to toil for the state. This is fascisim IMO.

The Senate voted Wednesday night to give a tax break of up to $15,000 to homebuyers in hopes of revitalizing the housing industry...
Sen. Johnny Isakson, R-Ga., who advanced the homebuyers tax break, said it was intended to help revive the housing industry, which has virtually collapsed in the wake of a credit crisis that began last fall.

The proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers.

Isakson's office said the proposal would cost the government an estimated $19 billion.

Democrats readily agreed to the proposal, although it may be changed or even deleted as the stimulus measure makes its way through Congress over the next 10 days or so.

Other GOP attempts to change the measure went down to defeat. The most sweeping of them, by Sen. Jim DeMint, R-S.C., failed on a mostly party-line vote of 36-61. It would have replaced the White House-backed legislation with a series of tax cuts on personal and business income and capital gains at the same time it made cuts passed during the Bush administration permanent.

"This bill needs to be cut down," Republican Mitch McConnell of Kentucky said on the Senate floor. He cited $524 million for a State Department program that he said envisions creating 388 jobs. "That comes to $1.35 million per job," he added.

After days of absorbing rhetorical attacks, Obama and Senate Democrats mounted a counteroffensive against Republicans who say tax cuts alone can cure the economy.

Obama said the criticisms he has heard "echo the very same failed economic theories that led us into this crisis in the first place, the notion that tax cuts alone will solve all our problems."

"I reject those theories and so did the American people when they went to the polls in November and voted resoundingly for change," said the president, who was elected with an Electoral College landslide last fall and enjoys high public approval ratings at the outset of his term.

Low housing values are bad for the haves, and good for the have nots.

The great American pyramid scheme (or should I say "great American pyramid dream") is fundamentally based on owning stuff and inflating the price of what you own, at the expense of the latecomers that own nothing and are renting the assets and desperate to buy same at ANY price (*) from the current owners.

(*) Or at least used to be.

OT
Thank you so much for the Nursing Home Blog!!! I have a mother in a nursing home right now. We are using her and my deceased father's life's savings right now with a combo of of her SS and some Long Term Care Insurance. My siblings and I do not anticipate any inheritence from Their savings. I know they did not intend for the nursing home to end up getting all of their savings. Nursing homes are very expensive, it is NOT living the golden years. Maybe a forum topic could be started that would get the ball rolling instead of commenting on an individual nursing home. There might be good advise given on a nursing home site that i might never know about unless I clicked on that specific nursing home. So I think a general site might also be a good idea. Just a suggestion. Thank you once again! I feel your pain and the agony that you have gone through. I, like you, feel there will be an epidemic coming our way in dealing with this issue. Thanks for all that you do!

TARP recipients paid $114M to lobby lawmakers

http://pacific.bizjournals.com/pacific/stories/2009/02/02/daily43.html?ana=yfcpc

Is this a surprise to anyone?

I support a flat tax that is simple with no deductions.

I love Sriram. :)

Remember, mort-gage really means death-pledge.

Gentlemen, wealth is NOT meant for the mass. If a lot of people look wealthy, a severe correction is near.

Boomers appear to have money, but their have not seen their depression-in-a-lifetime yet.

I support a tax that is progressive with no deductions.

>>equalizes things the best
>
>Why have equalization as the goal?

I put that badly. What I mean is that no one should be allowed to "run away with the ball" and end the game. The normal historical pattern everywhere is for some families to become landlords and permanently do no work by virtue of their land ownership, while all others have to work for them, forever.

One goal of any tax policy should be the prevention of a permanent state of masters and servants.

Thanks for the feedback on the nursing home blog seamoan!

True, it's hard to find good general commentary if you have to poke through many different nursing home pages. OK, I will make a general page... done. Here it is:

http://patrick.net/wp/?page_id=16200

Patrick

I support a tax that is progressive with no deductions.

Sure. 0% for people making less than $500 a year. 5% for income above $500.

One goal of any tax policy should be the prevention of a permanent state of masters and servants.

I beg to differ...

Becoming a master ought to be the goal of everyone. I want servants.

Peter, I agree that retirement is a worthy goal, and that means doing no work. Therefore others are doing everything it takes to keep you alive and comfortable.

But when it starts crossing generations, where people are born rich and never have to work simply by virtue of their family's massive land holdings, it is unfair. They didn't make the land. Why should they be able to exclude others from it forever?

Patrick, I understand the concern. However, those who do not "deserve" the money will soon part with it. This is an invariable truth of finance. We just need to tempt them with iPods/yachts/jets/girls/etc. ;)

We DO need to worry about power and influence crossing generations.

BTW, I agree landowners should be taxed on the consumption of the land. This can be determined using rental-equivalence valuation.

Oh no, come on man, “Slack off?” In other words there is never a point that someone becomes rich in this model and doesn’t have to toil for the state. This is fascisim IMO.

I think it would be easier to become rich because there would be no income tax or sales tax. You can minimize your taxes by minimizing your land ownership.

Accumulate a big pile of dollars, or gold, or whatever, and live off of that in a small house.

Will it be similar to the lump sum taxation in Switzerland?

How does lump sum taxation work?

http://www.steuern.lu.ch/index/p_welcome/w_e_lump-sum_taxation.htm

The lump-sum tax is based on the living expenses of a taxable individual, including his/her family. The minimum living expenses are computed as five times the rent expenditures, or for home owners the homes annual rental value, or double the value room and board.

When is that tax paid? I don't quite get it.

The tax is paid every year, but the rate is tied to the rental-equivalent value of the residence.

If the goal is to stop the idle rich from passing idleness on to their children then tax the hell out of large inheritances but this recurring notion of people looking around and judging whether someone has it too easy is just not acceptable.

this recurring notion of people looking around and judging whether someone has it too easy is just not acceptable.
Are you talking about the feudal lords judging the serfs... or vice versa?
These are the types of societal divides, between the very rich and the rest of the populace, that have led to uprisings in the past. Even somebody making $500,000 is doing better than 99% of the rest of the working masses. When the divide grows too large, and the greed is so thoroughly exposed, as it has been in recent weeks, somebody needs to do something before the anger becomes too great. Obama seems to understand that. Excerpted from here.

Malcolm,

I think the problem with inheritance tax is that the scheme is that it is too easily subverted by propaganda about the "death tax". It is better to tax people evenly throughout a lifespan, and have a less noticeable inheritance tax at the end.

Apropos inheritance tax, not to Malcolm in particular:

I think inheritance tax really is nothing much more than income tax on inheritance, with the key feature that it is levied before the payout, rather than after, for collection reasons. Image the amount of people who would try to flee the country with a suitcase full of cash if they received their inheritance in untaxed form.

And along the same lines, it is a very benign form of income tax, given that there is a multi-million dollar non-taxable portion that is excluded up front, the equivalent of a big deduction from taxable income in regular tax parlance.

Most people are meant to be poor. Any allusion to the contrary is a delusion in itself.

To those "extraordinary talents" who claim that they are going elsewhere for greener pasture on WS if income is capped, please do so. I would be very interested in finding out how much they will be worth once they leave their sheltered paper pushing positions.

Time to bring these paper shovelers down to the reality. And I hope they have some skills that we all desire, apart from running excel spreadsheet and drawing up PPT slides.

I am all for shareholder rights and I am against excessive executive compensation.

However, only shareholders should decide if compensation is too high. It is none of the government's business to decide what is too high.

If someone thinks WS does not deserve a bailout, DO NOT BAIL THEM OUT!

However, only shareholders should decide if compensation is too high. It is none of the government’s business to decide what is too high.

And what if the government is the majority shareholder?

Posted for a reader:

What I would like to see......

Some crackerjack video editor geek take an old film scene with people carrying torches, pitchforks, and clubs....and have them standing around the Capitol Building. Youtube that sucker and send the link to every member of Congress.

The easy way to make housing affordable is to make rent tax deductible and to offer tax allowance or outright stipends to the poor renters. It is totally unfair that renters subsidizes homeowners and landlords who are eligible for all kinds of tax deduction on their debts.

Consumer debts as a tax deduction was repealed in 1986 and that was perhaps the only tax deduction that renter ever got. There needs to be an overhaul to the tax code that makes allowance to renters.

And what if the government is the majority shareholder?

Then the government has done something it is not supposed to have done.

Then the government has done something it is not supposed to have done.

Good to know you are in favor of Wall Street going out of business!

>>The easy way to make housing affordable is to make rent tax deductible and to offer tax allowance or outright stipends to the poor renters.

I think it will have exactly the opposite effect. One of the reasons that commercial real estate rentals are much more expensive than residentials ($/ft^2/month) are that they are generally paid for by pretax earnings. (as a business expense).

Another example: Healthcare is also largely paid with pre-tax income. Lo and behold, it keeps soaring.

Good to know you are in favor of Wall Street going out of business!

No. I am in favor of Wall Street Darwinism. By all means, good firms should stay in business and thrive!

No. I am in favor of Wall Street Darwinism. By all means, good firms should stay in business and thrive!

What if they are all rotten?

EBGuy:
"Obama seems to understand that."

It is refreshing to have someone in office who genuinely does seem to understand many different interests on issues. He is in an unenviable position, which is why he basically has my overall support even if an issue here or there may not be 'solved' my way.

A survey of commercial real estate released Wednesday by Allen Matkins/UCLA Anderson Forecast predicts Silicon Valley’s market will not improve until 2011.

The valley’s market will lag in Los Angeles and San Francisco, both of which are expected to turn by the end of 2010.

“For the Silicon Valley it appears that 2011 is a turning point, but the data is less clear,” said Jerry Nickelsburg, a senior economist and author of the survey, in a prepared statement.

Nickelsburg said surveying all three Bay Area markets – San Francisco, the East Bay and Silicon Valley – showed that each will show a decline in occupancy and rental rates for the next three years.

In the South Bay, vacancy rates will rise to 17.5 percent by the end of 2010 and rental rates will rise at the rate of inflation, according to models used by the economic outlooks.

Even as the picture improves in 2011 though, the forecast does not predict a return to the “relatively low vacancy rates of early 2007, nor much growth in rental rates.”

The East Bay will fare slightly worse than the rest of the region because it was more exposed to the housing downturn and more reliant on finance and professional service jobs, both of which have suffered losses.

“The panel and the model are both gloomy about the near term in the East Bay,” according to the report.

The 2009 Enten investor fraud was revealed on 5 February 2009 when Kazutsugi Nami, the chairperson of Tokyo's bedding supplier Ladies & Gentlemen (L&G), was arrested by Japanese police. Nami and 21 other executives are accused of defrauding hundreds of thousands of investors of at least US$1.4 billion (£1 billion) over the past eight years. The case involves the invention of a fictional currency, "Enten", which Nami used to fool investors. It is believed to be the biggest investment scam in Japanese history.

Because of the financial crisis, countries will adopt the enten in three years' time. I will start shining and become world famous. I will certainly move the world.” —Kazutsugi Nami talking to the Japanese press.

===========

Chairman arrested in Japan 'scam'

Kazutsugi Nami had offered investors 36% annual returns
Japanese police have arrested the chairman of a Tokyo bedding supplier over an alleged investment scam reportedly worth $1.4bn (£970m).

Kazutsugi Nami, chairman of the now bankrupt L&G, had offered investors 36% annual returns and issued special electronic money termed "Enten".

The 75-year-old businessman had built a cult status among those who invested in his company.

He is reported to have swindled 37,000 investors, but denies any wrongdoing.

Police have confirmed his arrest but not the size of the alleged fraud.

Mr Nami and other L&G executives allegedly collected huge investment funds from clients despite knowing they could not pay the promised investment returns.

He also collected funds by issuing ''Enten'', saying that the quasi-currency could be used at company-sponsored bazaars nationwide and internet markets, according to an investigation reported by Kyodo news agency.

'Enten' fair

Mr Nami has denied any wrongdoing, AFP news agency reports.

"I'm leading 50,000 people. Can they charge a company this big with fraud?" he asked reporters.

Questioned over whether he was sorry for his investors, he was quoted as replying: "No! I have put my life at stake." He was then led away by the police.

Kazutsugi Nami had built up a cult-like following among customers.

Mr Nami wooed his so-called "shareholders", saying he had a "divine decree" to "eliminate poverty from this world", according to lawyers representing victims.

"Enten" was fed into investors' mobile telephones and used to buy items ranging from vegetables to futons, clothes and jewellery.

The name "Enten" is apparently a combination of the Japanese words for the yen currency and paradise.

The NTV network aired footage of an "Enten fair" where participants sang the praises of the investment plan.

L&G was established in 1987, at first selling bedding and health products.

It began its investment scheme, including the issuance of "Enten", in 2001.

The company stopped paying cash dividends in February 2007, and by September of that year had sacked most of its employees, Kyodo reported.

It folded in November 2007 and is now undergoing a court-led bankruptcy process.

EBGuy, on your first points about the serfs, it is indisputable what you are citing in history. My observation differs in the sense that while the gap between rich and poor is vaster than ever, (I see it as a good thing) the 'poor' in this country are rich by those same historic standards.

It happens that two days ago, I went hiking on a new trail I found, which took me through a cabbage farm. There were migrant workers picking the crops and I started thinking of discussions here and also thinking, (by many opinions here), that this was pretty much as bad as it gets in this country. While I sympathize with their conditions I also have to present the simple fact that those people have come over here because those conditions are better than their alternative.

Peter P Says:
"February 5th, 2009 at 2:48 pm
And what if the government is the majority shareholder?

Then the government has done something it is not supposed to have done."

Only because it would corrupt the system. Imagine the lawmakers trying to pass fair laws, or enforce laws equally in an industry where the government has a large interest in a major industry player? Pretty scary.
However, on the other hand, I absolutley love the model where the government is a true stakeholder and doesn't derive its revenue from taxation but as dividends. I kind of see what's going on as a social experiment so I'm being less vocal and just watching events unfold. It's a good time to be alive.

It is hard to believe that having the government as a shareholder would corrupt the government any more than has already taken place under republican free-market rule.