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PaperclipPerfector  8mo ago (text post)   30479 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.

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.

Taxing tips is basically a huge part of IRS enforcement. It is why you always see stats that most audits are on low-mid income people. The IRS knows they dont report so they audit them and check bank statements, and almost always find the person was committing tax fraud by underreporting tips.

check bank statements,

In my country tips are much smaller and they're left as cash. Would there be a way to audit those? Are US tips all credit card based or given as part of waiter's salary?

Yes. Cash tips get audited quite frequently. Along with the restaurants themselves.

Cash tips get audited quite frequently.

By what mechanism?

IRS sees you work in a service coded sector. They check your tip box. If its empty they get super suspicious. If its filled out their database compares your number to everyone else in your area and flags those that appear low. Those get assigned a case agent who sends you a threatening letter asking for proof of your reported number matches. You have none cus you're a lying liar who lied and got caught. Now they are looking at your bank statements for 3 years and eventually you enter some payment plan to pay back the last 3 years of tip fraud you committed.

You have none cus you're a lying liar who lied and got caught.

But in reality I have none because no one has any proof about cash tips, right?

Now they are looking at your bank statements for 3 years

To what end?

pay back the last 3 years of tip fraud you committed

So basically they just assume that I made the average tip amount in my area and calculate the fraud based on this?

It seems like the difference between my reported amount and the average must be very high for this method to be of any significance. If I work at an unpopular bar my tips might be 3x less than the average without any tip fraud whatsoever.

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