The Middle-Class Squeeze
wsj.com
The Middle-Class Squeeze
1–10 of 58 posts
Re: The Middle-Class Squeeze
#2A lot of the ails mentioned in the article seem to arise from Western societies' preference on income taxation vs property taxation.
Low property taxes force the governments to finance its expenditures mainly through sales and income taxes. The former are optional, the latter happen to penalize those who elect to participate in the workforce (which large property owners can safely sit out).
Re: The Middle-Class Squeeze
#3A lot of the ails mentioned in the article seem to arise from Western societies' preference on income taxation vs property taxation. Low property taxes force the governments to finance its expenditures mainly through sales and income taxes. The former are optional, the latter happen to penalize those who elect to participate in the workforce (which large property owners can safely sit out).
Property taxes are the most regressive form of taxation there is - it actually punishes good investments. If I buy a great house in a down market, when the market rebounds now I'm going to be punished year after year with higher taxes based on the financial "gains" that I haven't even realized yet. With a sales tax, good investments are rewarded by only taxing consumption, which can be avoided for those that wish to take on the risk/reward of investment.
Re: The Middle-Class Squeeze
#4Basic income will turn rural working class into the new middle class and cause those areas to flourish.
Re: The Middle-Class Squeeze
#5A lot of the ails mentioned in the article seem to arise from Western societies' preference on income taxation vs property taxation. Low property taxes force the governments to finance its expenditures mainly through sales and income taxes. The former are optional, the latter happen to penalize those who elect to participate in the workforce (which large property owners can safely sit out).
Property taxes also punish retired people. When your wages disappear after retirement, it's a lot more difficult to pay the taxes on your home.
Re: The Middle-Class Squeeze
#6A lot of the ails mentioned in the article seem to arise from Western societies' preference on income taxation vs property taxation. Low property taxes force the governments to finance its expenditures mainly through sales and income taxes. The former are optional, the latter happen to penalize those who elect to participate in the workforce (which large property owners can safely sit out).
Property taxes are the most regressive form of taxation there is - it actually punishes good investments. If I buy a great house in a down market, when the market rebounds now I'm going to be punished year after year with higher taxes based on the financial "gains" that I haven't even realized yet. With a sales tax, good investments are rewarded by only taxing consumption, which can be avoided for those that wish to…
Well, that of course depends on the system of property value assessment.
Re: The Middle-Class Squeeze
#7A lot of the ails mentioned in the article seem to arise from Western societies' preference on income taxation vs property taxation. Low property taxes force the governments to finance its expenditures mainly through sales and income taxes. The former are optional, the latter happen to penalize those who elect to participate in the workforce (which large property owners can safely sit out).
I've heard this argument many times; investment involves risk, potentially 100% of invested capital or more, unlike a paycheck.
Re: The Middle-Class Squeeze
#8A lot of the ails mentioned in the article seem to arise from Western societies' preference on income taxation vs property taxation. Low property taxes force the governments to finance its expenditures mainly through sales and income taxes. The former are optional, the latter happen to penalize those who elect to participate in the workforce (which large property owners can safely sit out).
Property taxes are the most regressive form of taxation there is - it actually punishes good investments. If I buy a great house in a down market, when the market rebounds now I'm going to be punished year after year with higher taxes based on the financial "gains" that I haven't even realized yet. With a sales tax, good investments are rewarded by only taxing consumption, which can be avoided for those that wish to…
exactly. it punishes risk takers.
Re: The Middle-Class Squeeze
#9A lot of the ails mentioned in the article seem to arise from Western societies' preference on income taxation vs property taxation. Low property taxes force the governments to finance its expenditures mainly through sales and income taxes. The former are optional, the latter happen to penalize those who elect to participate in the workforce (which large property owners can safely sit out).
Property and sales taxes are both the most regressive forms of taxation in practice.
The reality is, as much as everyone bitches about income taxes, a progressive tax system [regardless of the exact source, you could do a "progressive sales tax" for instance] is critical to prosperity.
Property taxes are in many ways effectively a tax on owning rental property which translates into higher rents [up to the market's willingness to pay, which is quite high given people are spending 50% of their income in some places in rent].
Re: The Middle-Class Squeeze
#10A lot of the ails mentioned in the article seem to arise from Western societies' preference on income taxation vs property taxation. Low property taxes force the governments to finance its expenditures mainly through sales and income taxes. The former are optional, the latter happen to penalize those who elect to participate in the workforce (which large property owners can safely sit out).
Property taxes are the most regressive form of taxation there is - it actually punishes good investments. If I buy a great house in a down market, when the market rebounds now I'm going to be punished year after year with higher taxes based on the financial "gains" that I haven't even realized yet. With a sales tax, good investments are rewarded by only taxing consumption, which can be avoided for those that wish to…
Incorrect. "Regressive" does not just mean "bad" according to some arbitrary definition of bad. If the poor pay more of a tax than the rich as a percentage of their income or wealth, then the tax is regressive. Otherwise, it is progressive. The word regressive is used to describe the incidence of a tax on a population.
A property tax is generally progressive because the poor do not own real property. The rich pay more property tax as a percentage of their income/wealth than the poor.
A sales tax is the prototypical example of a regressive tax because the rich consume less (as a percentage of their income) than the poor. Therefore, the rich pay of a lower percentage of their total income to sales taxes than the poor.
An income tax with higher marginal tax rates for higher incomes is the classic example of a progressive tax. Since Reagan, income taxes approximate a flat tax more than a progressive one.