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PaperclipPerfector  8mo ago (text post)   30486 thread views

Culture War Roundup for the week of August 12, 2024

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New homes and end to price-gouging: Harris sets economic goals

The Democratic presidential nominee's plans build on ideas from the Biden administration and aim at addressing voter concerns after a surge in prices since 2021.

The campaign's proposals include a "first-ever" tax credit for builders of homes sold to first-time buyers, as well as up to $25,000 in down-payment assistance for "eligible" first time buyers, a move that her campaign estimated could reach four million households over four years.

She has also called for capping the monthly price of diabetes-drug insulin at $35 for everyone, finding ways to cancel medical debt, and giving families a $6,000 tax credit the year they have a new child.

She is supporting a federal law banning firms from charging excessive prices on groceries and urged action on a bill in Congress that would bar property owners from using services that "coordinate" rents.

Though analysts say some of Harris's proposals, such as the ban on price-gouging, are likely to be popular, they have also sparked criticism from some economists. Bans on price-gouging already exist in many states, applied during emergencies such as hurricanes. But economists say the term is difficult to define and widening such rules could end up backfiring, by discouraging firms from making more at times of short supply.

Everyone likes free money, right? Building houses is good, having kids is good, paying less for life saving medications is good, taking power out of large landlords hands is good. But maybe trying to apply emergency price gouging laws to non-emergency situations is not so good. Maybe write a law that you have to lower prices when things are good as quickly as you raised them when they weren't so good. What are Trump's plans?

With populism ascendant in both parties, that cost has not dissuaded Trump's choice for vice president, JD Vance, from backing an even bigger tax credit expansion.

Economists predict that increased drilling would have limited impact given the global nature of energy markets and have warned that Trump's pledge to impose a tax of 10% or more on imports would drive up prices.

We're already producing a boatload of oil, but with russia somewhat out of the picture our european friends might appreciate it. Not sure about bringing down prices though.

A few months ago I commented on how vote buying is becoming commonplace of late.

Kamala's latest salvos have taken this to ridiculous new heights. It's hard to keep track but so far I see:

  • Student loan forgiveness
  • Medical debt forgiveness
  • Payments for people buying new homes
  • Payments for people paying more than 30% of their income as rent
  • Payments for newborns
  • Price controls on groceries !?

She even copied Trump's rather feeble attempt to buy votes with his "no taxes on tips" idea. (Not direct vote buying since this only offers relief from taxes, not direct payments).

Needless to say, subsidizing demand and price controls have a disastrous track record wherever they've been tried. Her policies, if implemented, would create huge disruptions in the market and likely to lead to high inflation as well as a serious and deep recession. If you are a net contributor to the tax system, things will become much worse for you as your taxes go up massively to pay for the freeloaders.

In other news, the price of gold hit an all-time high today.

I mean, to be fair, no taxes on tips acknowledges a de facto reality: who reports their tips in their tax returns? Enforcement would be impossible. As a handout to Nevada, it makes sense politically.

Harris's proposed policies make Trump look like the king of austerity. Considering how spendthrift he is, that's an accomplishment.

Most tips these days are on credit card payments, which the employer reports anyways.

Now certain bartenders can and do get away with underreporting income, but mostly in bars where paying big cash payments is A Thing as a status symbol in the scene. Almost all of these people use cash payments to steal from their employer anyways(through various scams enabled by the structures of bar management), so bar owner economics is to disincentivize cash payments. Waitstaff usually isn't that sophisticated and just reports that cash payers tip them 0%, then pocket the money- but you won't catch them because they're smart enough not to deposit the cash. OTOH restaurant managers tend to tell me that a higher percentage of cashiers(waiters usually aren't allowed to cash out their own checks) have been pilfering from the till recently; I suspect that this is related to low-end labor shortages making it harder to hire honest people for those kinds of jobs, so some of the same factors apply- it's impossible to steal credit card payments from your employer without much more sophistication than these people have.

TDLR there's a large quantity of tipping done via credit card and no way for service workers to prevent it being reported. The incentives of owner-men in the hospitality industry are to increase this percentage due to employee theft.

Experiment: When a plumber, electrician, or handyman has finished his job and expects payment, ask if paying in cash is OK. You will see an expression of pure joy cross his face as he answers "yes".

Ask them for a cash discount. If they don't offer one up front, which they often do. I suspect the smarter ones are offering an X% cash discount and recording an X+N% cash discount, and the dumber ones are just not recording the payment at all.

and the dumber ones are just not recording the payment at all.

I don't know anything about taxes, why are they the dumber ones?

I imagine it looks more suspicious in an audit to have records (phone, email, etc.) that you performed a job but never got paid for it vs. getting paid (but only recording a fraction of what you were actually paid).

Wait a second. Audits mean the government gets to sift through all your communications???

I suppose they only have the right to see email accounts and phone records of your business, not you personally?

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It's too obvious. If an auditor comes in there will be obvious tells if a fair number of jobs just aren't recorded, like too many supply purchases. Presumably a good enough financial wizard could hide most of this as well, but it will be difficult. On the other hand, figuring out that the amount of cash discount is usually overstated would be much harder to find.

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