patrick.net

DS says: Patrick’s original assertion was that the MID as an owner-occupier benefit would lead to house price inflation. I maintain that this can only happen once, at the time it is introduced, whereupon it would probably get capitalised into the cost of housing very quickly by the market. This is unfortunate, as it negates the point of introducing the MID.

Actually, I would disagree with the assumed point of MID. I understand the intention to be encouraging homeownership.

I think that at best the MID is a mathematical wash, but people don't really understand that. Americans are fairly bad at math. They can't correlate a monthly payment to a yearly loss via interest to a bank. So what they ultimately see is a low, low monthly payment of X, and then a tax deduction of 12*X at the end of the year, resulting in a "refund" of approximately 0.3*12*X. Nevermind that there is a minimum standard deduction, or that they have lost 0.7*12*X to the bank.

In much the same way, Americans can't correlate yearly inflation to the overall rising value of their house. Since they don't understand the cost of leverage or the opportunity cost of time, the resulting gain seems wicked awesome, and they get a tax benefit to boot. Thus, mission accomplished from a government policy standpoint, even if the math is sometimes shaky. It doesn't help that most accountants will tell you that buying a home is great for your taxes. I think that's what Malcom meant when he said, "You need to come and meet some Americans to really understand the pettiness here." They will cut themselves just to prick the tax man.

I can't tell you how many people say in passing, "I wish I would have bought property here in the 1980's." To which I typically respond, "I wish I would have leveraged into the DOW or S&P 500 in the late 80's." Most people seriously have no idea how the math really works, or what the relative asset classes have done over the past 50 years.

Brand Says:
Actually, I would disagree with the assumed point of MID. I understand the intention to be encouraging homeownership.

This is what I meant. However, the MID quickly gets capitalised into the cost of housing once introduced, thus negating the benefit. Clearly the MID is intended to reduce monthly housing debt via a tax break, thus making homeowning easier. However, I find it bizarre, as there is an immediate unanticipated consequence of the market to inflate prices to absorb the saving. For this reason, I always oppose politicians' suggestions for such schemes, including drawing down from your pension plan to afford today's over-inflated prices, and specific home owner grants of other sorts, without some sort of price control or hiding of the grant from the market. There are better ways to get the desired result.

PermaRenter Says:
“Chindian lemmings” and “Chindian mafia” both are very powerful group

This is the second or third time you brought this up, so it looks like you have some sort of bee up your bonnet on this. 'Chindian lemmings' was a joke, they aren't any kind of powerful group. As for the 'mafia' comment, the chindians I have worked with are too busy trying to one-up each other - so it is very unlikely there is an organized gang that is out to keep you down. It is probably something else altogether... :-)

SP

Brand Says:
You know, maybe I’m missing something. Why does everyone keep talking about the Zestimate on Zillow?

You _did_ in fact miss my point. I wasn't relying on the Zestimate as an indicator of value. Just pointing out a couple interesting relative aspects:
1. that _all_ the actual sales were significantly below Zestimate and _all_ the asking prices were above Zestimate.
2. that a year ago, almost all actual sales were at or above the Zestimate.

I ignored the zestimate itself as an absolute number, but was using it as a pivot for these other stats.

SP

Yes Malcolm, 46% is pretty darn close to 50%. As you said before, it is mostly whether you consider the FICA and SDI paid by your employer to be part of your tax rate or not. You can argue either way, but we are almost entirely in agreement.

DS Quotes me:
"Frankly that thinking scares me, but I realize there are two points of view here. Mine is that the state derives its powers and revenues from taxes paid from wealth, whereas the other point of view is that everthing starts out as belonging to the state, and the state takes what it deems a fair amount. The latter is distinctively un-American."

DS, I would love to know a third point of view in this area. Someone else even elaborated on that point that the state view is the traditional one and the concept of government deriving its power and wealth from the people is relatively modern thinking. I did not define the two, it is a pretty standard spectrum view no matter what your opinion of it is. No matter how creative you get, you will either have wealth start out as state owned, or privately owned as you only have 2 choices.

BTW none of your examples have me misquoting or distorting something you said, or consist of non sequitors. Now you have lowered the bar to 'baiting'?

DS, I am going to publish my own newly discovered logical fallacy based on your techniquie. (Kidding)

MOVING TARGET - In a debate, to throw your opponent off, shift positions and claim you never actually said any of the things that you put in print the prior day while throwing different labels at your opponent hoping something sticks.

Related readings - Bill Clinton, Hillary Clinton, John Kerry, Dick Cheney, Al Gore, Richard Nixon, Bagdad Bob

DS Quotes me, and then says
"Right, that’s called a business loss, that’s how it works here. A net loss on a rental comes off of your adjusted gross income. You need to come and meet some Americans to really understand the pettiness here."

-I don’t even understand that last sentence.-

That's because that wasn't the last sentence.

DS Says:

"I haven’t indicated there’s a ‘problem’ along the lines you’re suggesting. That’s 2 more straw men."

Sorry but you did, here you are just not being honest.

Different Sean Says:
July 6th, 2007 at 12:24 am

M- implying that MID is a government handout to an undesireable class.

DS- "In Oz, it IS a govt handout to an undesirable class"

I'll stop now, and yes I realize I misspelled sequitur above.

PermaRenter,

Given your fascination with the "Chindian Mafia," you might be interested in renting the movie, "Better Luck Tomorrow." It's actually a decent flick, and it's pretty much right to your point, especially with respect to that article you posted about the brothers from Daly City.

I thought we were jokingly talking about perceived/real strangleholds that professional Indians/Chinese on the workplace.

Overall, Indians and Chinese immigrants, warts and all, have been model immigrants in this country. Their so called faults are just overdone virtues.

™