Tax loophole.

[redux]

Interesting!

http://www.breitbart.com/Big-Government/2012/12/08/the-most-absurd-loophole-in-the-tax-code

[jainen]

Oh pshaw! It's just another government-is-stupid scree. Can't political commentators find any REAL tax issues?

I think it's obvious, in economic theory, that a property owner has the usage value of his property. The same value is there whether he uses it himself or lets someone else use it. You have to count it either way if you want to know the value of housing usage in an economy. So in the context of Gross National Product you need inputed income for personal use of property.

But there are giant flaws in Mike Flynn's logic about "the technocrats." First of all, his unattributed quote defines "baseline tax system" to include inputed income like this, but then points out that the actual tax code does not include it. There are an infinite number of tax and economic theories that aren't in the tax code, and to pick out one as a "loophole" is intellectually dishonest.

It's even more directly dishonest to state the issue backwards as "money I don't have to pay" for rent when the calculation is of value received in lieu of rent.

[GeneInAlabama]

I have often wondered how long it would take the government to figure out a way to tax us on the money we save by mowing our own lawn instead of hiring someone else to do it. I really don't expect anything like this to ever happen, but. . .

[jainen]

>>a way to tax us on the money we save by mowing our own lawn<<

This is the backwards argument again. In a sense we are ALREADY taxed on such savings, inasmuch as hiring someone else to do it would otherwise be deductible (under ordinary rules such as business or income production). The supposed "loophole" is in calculating the value someone else would pay YOU for the honor of hewing your hay.

[Elrod]

I go to the corner store to buy some tasty Faygo soft drinks.

On the counter is a jar for our local fire work display.

I get $ .52 cents back in change, and put it in the jar.

The fire works display is thousands of dollars, done by professionals on a beautiful lake.

Next 4th of July I get there early for a beach side "free" seat.

Professional display est. = $8,000.00

Front row seat est. = $ 25.00

$8,025.00

My investment = ($ .52)

Depreation-lawn chair = ($ .04)

$ 8,024.44 ....Divided by estimated number of viewers = 3,000 = $ 2.67

My taxable income = $ 2.67 - $ .56 = $ 2.11

Tax on said income = $ .30

Next time I'll take the wife with me.......She remembers to bring the Fagyo.

[jainen]

>>I get $ .52 cents back in change<<

Sounds like you only paid 24 cents a can, a discount of a nickle according to http://www.faygo.com. So don't forget to add two cents more tax for the ten cents savings, plus another penny SE tax since depreciation means you are treating this as a business.

[Don in Upstate NY]

What about the deposit on the bottles or cans? Time value of money and all that.

[Gail in Virginia]

I go to the corner store to buy some tasty Faygo soft drinks.

On the counter is a jar for our local fire work display.

I get $ .52 cents back in change, and put it in the jar.

The fire works display is thousands of dollars, done by professionals on a beautiful lake.

Next 4th of July I get there early for a beach side "free" seat.

Professional display est. = $8,000.00

Front row seat est. = $ 25.00

$8,025.00

My investment = ($ .52)

Depreation-lawn chair = ($ .04)

$ 8,024.44 ....Divided by estimated number of viewers = 3,000 = $ 2.67

My taxable income = $ 2.67 - $ .56 = $ 2.11

Tax on said income = $ .30

Next time I'll take the wife with me.......She remembers to bring the Fagyo.

Elrod, I think you are deducting your investment and depreciation twice. It would be 8025/3000=2.68 - .56=2.12 taxable income. No cheating on hypothetical scenarios!

[Elrod]

OUCH!......