Some of the themes in this thread are rather comical.
If you believe there should be some tax relief to reflect the costs of having and raising kids, or don't want to discourage having kids because society needs population growth, then why cap these deductions at all, be it at $100K, $400K or any level? We already have a progressive tax system. Why play these cap games with deductions to make it more progressive, be it with kids, mortgage interest, or any item. If you want the system to be net more progressive, do that in the rates, or get rid of the deduction for everyone. After all, it's not like any of those folks are getting a refundable tax credit, or Govco payout, they are only getting a (very minor in their case) adjustment to reflect the added cost of raising kids. Treat everyone the same, and you don't have these issues.
At least 5150 offers up a valid argument, even if I don't agree with him (despite generally being against all types of itemized deductions). While I do think we need population growth, and it is "fair" to reflect the cost of raising kids vs. not in our tax system as long as everyone plays by the same rules, why should childless taxpayers pay more on the same exact income as someone with kids? (let's not forget they also get hit on local taxes for schools, etc.) These deductions just flatten out some of the progressivity we supposedly want in our income tax system. So if you don't like that flattening, get rid of that deduction for everyone, not just the "chosen" tax payers.
And then we got the envy group chiming in about the investor class, unearned income (since it's distinguished from "earned" in their minds), and those just "making money off the work of others". (TBC I do think investment income should be taxed the same as W-2 income) Like we're talking about a bunch of trust fund kids just sitting around on their yachts and hauling ass in their Lambos spending down the trust, doing and risking absolutely nothing. It's like these envious folks never heard about the risk/reward function. There is virtually no risk to working and collecting a paycheck. It doesn't require having a vision, risking everything, and struggling (most likely grossly underpaid vs market value) while you get the business up and running. There is when you're signing/funding that paycheck. There is no risk of going bankrupt when your business fails. You are not going to have to pay to work for a week, month or even a year because your investments went south. Worst case is the paychecks stop and you're looking for another job. The higher the risk, the higher the reward, it's not a difficult concept. And envy is not becoming. No one is stopping us from being the one taking all the risks.
|
(
In response to this post by PalmyraHoo)
Posted: 12/17/2017 at 4:31PM