Tax on borrowing.

Anarchist420

Diamond Member
Feb 13, 2010
8,645
0
76
www.facebook.com
Housing should be completely tax deductible while paying interest should be taxed rather than deductible.

Switzerland has a 35% tax on borrowing, which I think discourages borrowing and may be part of why they have a stronger currency.

What do you think?
 

FoBoT

No Lifer
Apr 30, 2001
63,089
12
76
fobot.com
if we wanted to discourage borrowing, why is the Fed setting interest rates at zero/near zero for the next 2 years? i don't think you understand what the Fed is trying to do here
 

Hayabusa Rider

Admin Emeritus & Elite Member
Jan 26, 2000
50,879
4,265
126
if we wanted to discourage borrowing, why is the Fed setting interest rates at zero/near zero for the next 2 years? i don't think you understand what the Fed is trying to do here

But think of the advantages! By implementing taxes on already debt burdened individuals a whole host of people would be ruined. Tens of millions of bankrupts and a resulting depression that would make the 30's look like the good old days. Mission accomplished.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Housing should be completely tax deductible while paying interest should be taxed rather than deductible.

Switzerland has a 35% tax on borrowing, which I think discourages borrowing and may be part of why they have a stronger currency.

What do you think?

So let me get this straight. You love the idea of regressive taxation/bigger government because it suits your interests, but hate it when it doesn't?

What a foolish position and utterly hypocritical, not surprising from Ron Paul supporters. After all he is a huge hypocrite.
 

Capt Caveman

Lifer
Jan 30, 2005
34,547
651
126
Jesus Christ. Take some economics classes and get a friggin clue. Is this a stupid Ron Paul idea or did you think of this all by yourself?

No wonder Ron Paul gets no media coverage and why people laugh at his supporters. Get a job and pay some fucking taxes before you talk about taxing people more. Ron Paul is a republican, I thought republican's wanted less taxes?
 
Last edited:

FoBoT

No Lifer
Apr 30, 2001
63,089
12
76
fobot.com
... a resulting depression that would make the 30's look like the good old days. Mission accomplished.

i thought the mission was high inflation (you pay off old debts with future inflated dollars, that is why keynesians say borrowing is awesome) not depression

:hmm:
 

FelixDeCat

Lifer
Aug 4, 2000
29,155
2,034
126
"Debt is dumb, cash is king and the paid off home mortgage has taken the place as the status symbol of choice" is some guy on the radios motto. I actually dont like him but I agree we should discourage consumer debt.

I support a 10% tax. :)
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
"Debt is dumb, cash is king and the paid off home mortgage has taken the place as the status symbol of choice" is some guy on the radios motto. I actually dont like him but I agree we should discourage consumer debt.

I support a 10% tax. :)

What's your political affiliation?

All cash is even more dumb than all debt. People need to be balanced.
 

Anarchist420

Diamond Member
Feb 13, 2010
8,645
0
76
www.facebook.com
So let me get this straight. You love the idea of regressive taxation/bigger government because it suits your interests, but hate it when it doesn't? What a foolish position and utterly hypocritical, not surprising from Ron Paul supporters. After all he is a huge hypocrite.
I said if it reduced borrowing, but I found out it wouldn't. Also, the government would get LESS revenue if shelter was completely tax deductable even if taxes had to be paid for borrowing. Also, Dr. Paul's hypocrisy rating is zero:)
Jesus Christ. Take some economics classes and get a friggin clue. Is this a stupid Ron Paul idea or did you think of this all by yourself? No wonder Ron Paul gets no media coverage and why people laugh at his supporters. Get a job and pay some fucking taxes before you talk about taxing people more. Ron Paul is a republican, I thought republican's wanted less taxes?
No, this is not an idea from Dr. Paul. I believe that I read that Switzerland taxes borrowing, so that's why I was asking if it was good to do it here.
 

JEDIYoda

Lifer
Jul 13, 2005
33,981
3,318
126
Housing should be completely tax deductible while paying interest should be taxed rather than deductible.

Switzerland has a 35% tax on borrowing, which I think discourages borrowing and may be part of why they have a stronger currency.

What do you think?

I bet you miss your home planet......
 

nonlnear

Platinum Member
Jan 31, 2008
2,497
0
76
What's your political affiliation?

All cash is even more dumb than all debt. People need to be balanced.
Cash is the worst form of money to hold over the long term, that's true.

What do you mean by "people need to be balanced?" I agree that debt has some very good uses, but I don't see a principled need to "be balanced". (I took it to mean something like "everybody should have some debt and some cash. I hope I'm wrong, please correct me if that's not what you meant.) I aspire to a financial position where I won't need debt for household operations, and that day is coming pretty soon. Debt is useful for the young, but if you're old and in debt (or rather if you need the debt that you hold in order to sustain your level of consumption), barring some calamitous circumstances you failed at financial planning.
 
Last edited:

1prophet

Diamond Member
Aug 17, 2005
5,313
534
126
There are different types of borrowing and some have it's uses,

but buying things you don't need on impulse with money you don't have through credit should be discouraged.
 

Joepublic2

Golden Member
Jan 22, 2005
1,114
6
76
if we wanted to discourage borrowing, why is the Fed setting interest rates at zero/near zero for the next 2 years? i don't think you understand what the Fed is trying to do here

I don't think the Fed understands what the Fed is trying to do here.

A tax on borrowing would be a bad idea but inflation is nothing but a subsidy on borrowing money.

I really, really wish I was a bank right now because I would borrow money at 0% interest from the Fed, invest it into something that holds its value better than cash does (which is everything in an inflationary economy) then hold on to it for some time and turn around and sell it. Even if my invests creates NO net wealth increase to society I'll still come out ahead if it merely held most of its original value because I'm in effect paying back less money to the debtor than I originally borrowed. The issuer of the debt is OK with this however because it's a unique issuer that is allowed to counterfeit money for some reason. A 0% interest rate + inflation is in effect a NEGATIVE interest rate on borrowing.

I wish I could counterfeit 16 TRILLION dollars and get away with it: http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3
 
Last edited:

Fern

Elite Member
Sep 30, 2003
26,907
173
106
What's your political affiliation?

All cash is even more dumb than all debt. People need to be balanced.

Cash is the worst form of money to hold over the long term, that's true.
-snip-

I could be wrong about what this guy means, but I'm well familiar with "cash is king".

And it is, particularly in bad economic times.

It doesn't necessarily mean having stacks of cash lying around. It could be cash equivalents that be converted to cash quickly.

In times of trouble, like now, I've seen the people who can come up with (typically fairly large amounts) cash purchase assets (real estate, biz equip) at steep discounts. Sometimes 10 cents on the dollar.

If someone can afford to advertise and market their assets for months they are not in that much trouble. I have seen cases where they need the money NOW (marital break up). I have seen businesses liquidated in cash auctions. Since other businesses aren't doing anything few show up. I had a client acquire over a million $'s worth of cell phone equip. You could set up your own cell phone company with it. He flipped it to someone in another country for $500K.

I've seen this a number of times.

Fern
 

Fern

Elite Member
Sep 30, 2003
26,907
173
106
Housing should be completely tax deductible while paying interest should be taxed rather than deductible.

Switzerland has a 35% tax on borrowing, which I think discourages borrowing and may be part of why they have a stronger currency.

What do you think?

For one, I think it's unconstitutional (if you're referring to a federal tax on loans). There's a reason why it took a Constitutional amendment to impose an income tax.

For another, it would kill the economy. Others have already mentioned consumer demand, but you wanna kill banks, especially small banks? They make their money on loans.

You want to kill any chance for someone to start a new business? You can't borrow, you can't start.

Kill chances to expand a existing business?

The people who already have cash are greatly benefited by this. I.e., this would be hugely redistributive pushing wealth to those already at the top.

People would be forced into alternate arrangements, such as 'sale leasebacks' to generate needed cash. The rich person buys it from you (thus providing you with cash) and leases it back to you, at a huge profit since you have no alternative (like to borrow). That 35% 'tax' would be going to fat-cats, not the US Treas.

Fern
 

Moonbeam

Elite Member
Nov 24, 1999
72,395
6,074
126
I could be wrong about what this guy means, but I'm well familiar with "cash is king".

And it is, particularly in bad economic times.

It doesn't necessarily mean having stacks of cash lying around. It could be cash equivalents that be converted to cash quickly.

In times of trouble, like now, I've seen the people who can come up with (typically fairly large amounts) cash purchase assets (real estate, biz equip) at steep discounts. Sometimes 10 cents on the dollar.

If someone can afford to advertise and market their assets for months they are not in that much trouble. I have seen cases where they need the money NOW (marital break up). I have seen businesses liquidated in cash auctions. Since other businesses aren't doing anything few show up. I had a client acquire over a million $'s worth of cell phone equip. You could set up your own cell phone company with it. He flipped it to someone in another country for $500K.

I've seen this a number of times.

Fern

Sometimes buying something at 10 cents on the dollar is not such a great idea, especially if it goes to 0 cents on the dollar. What you are really doing is speculating making money out of thin air. But suppose you borrow to buy a brick maker and you make a brick city into which thousands of people move and start businesses and pay taxes etc. Here you create not just money out of thin air, but real wealth, something real and with tangible meaning. So you can borrow to blow, to speculate, and to create.

I don't really know anything but I am in the process of investigating how to turn mud into a pizza oven without even borrowing to buy a brick machine and pizza, perhaps not coincidentally, are round like coin money. Pizza Pissa Pessa Pesso Peso>>>>> See!
 

alkemyst

No Lifer
Feb 13, 2001
83,967
19
81
OP, if you aren't making at least six figures individually; you would be screwing yourself.
 

LunarRay

Diamond Member
Mar 2, 2003
9,993
1
76
Housing should be completely tax deductible while paying interest should be taxed rather than deductible.

Switzerland has a 35% tax on borrowing, which I think discourages borrowing and may be part of why they have a stronger currency.

What do you think?

Dang, there is a Switzerland on you home planet too?
Would you be so kind as to provide a link to the tax law on your planet (Swiss) as it relates to your 'comment'.

Last I knew here on this planet Borrowing was not considered taxable income unless one did not repay it or perhaps some other similar event occurred... I'd love to be edified on this topic.

Interest paid in Swiss activity was considered ordinary business expense deduction and for individuals a deduction to the extent fiscal policy deemed a stimuli was in order.

I do know there is a 35% withholding requirement paid to the FTA on the part of the payor of dividends and interest to the holders of the bonds, etc. But, not borrowing.?
 
Last edited:

Demo24

Diamond Member
Aug 5, 2004
8,357
9
81
Housing should be completely tax deductible while paying interest should be taxed rather than deductible.

Switzerland has a 35% tax on borrowing, which I think discourages borrowing and may be part of why they have a stronger currency.

What do you think?

What I think is that you saw 35% tax without bothering to understand what that the term '35% withholding tax' meant.

http://finance.practicallaw.com/3-502-1067
 

shira

Diamond Member
Jan 12, 2005
9,567
6
81
Housing should be completely tax deductible while paying interest should be taxed rather than deductible.

Switzerland has a 35% tax on borrowing, which I think discourages borrowing and may be part of why they have a stronger currency.

What do you think?

Wait a second: If you get a mortgage to purchase a home, is that "housing" (which according you you should be tax deductible) or is it "interest" (which you say should be taxed)?