Capitalism is NOT Democratic: Democracy is NOT Capitalist

[Toddsterpatriot]

Accelerated depreciation is nothing new.

Accelerated depreciation - Wikipedia

en.wikipedia.org

A 25 year old building is usually in much better shape after 25 years, than when you bought it.
I always buy low priced, distressed buildings that look bad but have decent bones.
With a little remodeling and annual upkeep, all of which you write off, then the value of most building goes way up over time.

Those who lost money on real estate from 2007 to 2009 were foolish.
They paid too much on the bubble, and panicked.
If they had held off til 2010, they would have gotten far more.
Bubble and bust is a constant repeating cycle you can count on.
The 2008 crash was actually deliberate, caused by manipulation of the British LIBOR.
The scandal was not revealed until around 2012.

{...
The Libor scandal was a series of fraudulent actions connected to the Libor (London Inter-bank Offered Rate) and also the resulting investigation and reaction. Libor is an average interest rate calculated through submissions of interest rates by major banks across the world. The scandal arose when it was discovered that banks were falsely inflating or deflating their rates so as to profit from trades, or to give the impression that they were more creditworthy than they were.[3] Libor underpins approximately $350 trillion in derivatives. It is currently administered by Intercontinental Exchange, which took over running the Libor in January 2014.[4]

The banks are supposed to submit the actual interest rates they are paying, or would expect to pay, for borrowing from other banks. The Libor is supposed to be the total assessment of the health of the financial system because if the banks being polled feel confident about the state of things, they report a low number and if the member banks feel a low degree of confidence in the financial system, they report a higher interest rate number. In June 2012, multiple criminal settlements by Barclays Bank revealed significant fraud and collusion by member banks connected to the rate submissions, leading to the scandal.[5][6][7]

Because Libor is used in US derivatives markets, an attempt to manipulate Libor is an attempt to manipulate US derivatives markets, and thus a violation of American law. Since mortgages, student loans, financial derivatives, and other financial products often rely on Libor as a reference rate, the manipulation of submissions used to calculate those rates can have significant negative effects on consumers and financial markets worldwide.

On 27 July 2012, the Financial Times published an article by a former trader which stated that Libor manipulation had been common since at least 1991.[8] Further reports on this have since come from the BBC[9][10] and Reuters.[11] On 28 November 2012, the Finance Committee of the Bundestag held a hearing to learn more about the issue.[12]

The British Bankers' Association (BBA) said on 25 September 2012 that it would transfer oversight of Libor to UK regulators, as predicted by bank analysts,[13] proposed by Financial Services Authority managing director Martin Wheatley's independent review recommendations.[14] Wheatley's review recommended that banks submitting rates to Libor must base them on actual inter-bank deposit market transactions and keep records of those transactions, that individual banks' LIBOR submissions be published after three months, and recommended criminal sanctions specifically for manipulation of benchmark interest rates.[15] Financial institution customers may experience higher and more volatile borrowing and hedging costs after implementation of the recommended reforms.[16] The UK government agreed to accept all of the Wheatley Review's recommendations and press for legislation implementing them.[17]

Significant reforms, in line with the Wheatley Review, came into effect in 2013 and a new administrator took over in early 2014.[18][19] The UK controls Libor through laws made in the UK Parliament.[20][21] In particular, the Financial Services Act 2012 brings Libor under UK regulatory oversight and creates a criminal offence for knowingly or deliberately making false or misleading statements relating to benchmark-setting.
...}

Libor scandal - Wikipedia

en.wikipedia.org

Rule of thumb, never accept an ARM based on anything other than the US Prime rate.

A 25 year old building is usually in much better shape after 25 years, than when you bought it.

That's just silly.

With a little remodeling and annual upkeep, all of which you write off, then the value of most building goes way up over time.

And when you sell, the government recaptures your depreciation.

Those who lost money on real estate from 2007 to 2009 were foolish.

Yup. And they disproved your claim.

The 2008 crash was actually deliberate, caused by manipulation of the British LIBOR.

LOL! What about Fed funds?

 

[Toddsterpatriot]

The point is you should not be taxed on income, but only on profit.
The cost of doing business, such as housing, food, clothing, transportation, etc., should be removed first before you figure the taxable profit.
Big corporations do that, but individuals are not allowed.
The personal exemption has not kept up with reality.
They they try to claim the progressive rate makes up for it.
That is bogus.
They should just go with a higher exemption and then use a flat rate for all.

And by the way I can tell you are not wealthy or do not do your own taxes, but cause interest most certainly IS an exemption.
Mortgage interest is profit to the bank, so you get to reduce your income by the amount you pay in mortgage interest.
Otherwise they would essentially be taxing the mortgage interest twice, once to you and then again against the bank.

The point is you should not be taxed on income, but only on profit.

Silly.

The cost of doing business, such as housing, food, clothing, transportation, etc., should be removed first before you figure the taxable profit.

Sillier.

Big corporations do that, but individuals are not allowed.

Yup. Because corporations are taxed on profit.

And by the way I can tell you are not wealthy or do not do your own taxes, but cause interest most certainly IS an exemption.

Mortgage interest is a deduction, not an exemption, idiot.

Mortgage interest is profit to the bank

No it isn't.

 

[Toddsterpatriot]

What that ignores is that since everyone is paying taxes, even those who are not really making any profit at all after paying for room and board, that the poor are paying much higher rates.
Taxes are only supposed to be on extra profits, AFTER you write off the cost of doing business.
But with most individuals, their rent, food, clothing, transportation is not allowed to be written off.
They are given less than a forth what a reasonable cost of living allowance should be.
{... For tax year 2017 (the taxes you filed in 2018), the personal exemption was $4,050 per person. ...}
Who actually pays taxes should be those who are profiting the most from the system and who can afford it the most.
So these poor people who are being ripped off by substandard wages should not be paying the taxes they are being forced to pay.
The first $15k should be tax exempt at least.
That is just the cost of living, and should not be taxed at all.

Still looking for your evidence "that the poor are paying much higher rates"?

 

[Rigby5]

A 25 year old building is usually in much better shape after 25 years, than when you bought it.

That's just silly.

With a little remodeling and annual upkeep, all of which you write off, then the value of most building goes way up over time.

And when you sell, the government recaptures your depreciation.

Those who lost money on real estate from 2007 to 2009 were foolish.

Yup. And they disproved your claim.

The 2008 crash was actually deliberate, caused by manipulation of the British LIBOR.

LOL! What about Fed funds?

I always at least double my money on real estate, and I flip sooner than 10 years.
The CA bust from 2007 to 2010 was not real but a deliberate fraud, with adjustable mortgages written on the British LIBOR, that doubled the payment after a couple of years.
It is true you repay the depreciation if you sell for a profit, but not if you trade with another land lord.

There is a false claim the feds were just not careful enough who they gave mortgages to, but that is false.
Those buyers were making the payments until the payment doubled.
If the ARM had been based on US Prime, then the payment would have gone down instead of up.

 

[georgephillip]

It is why we have a mixed-market economy that is part capitalism and part socialism.

Government must be the socialism part since it is an externality to Capitalism.

American government is transitioning from a very limited representative democracy to full-blown oligarchy and there aren't many elected officials pointing this out, imho:

Brutal Capitalism: How America is transforming from a democracy to an oligarchy | The Milwaukee Independent

"What we are watching is the final stage of the 40-year Reagan-started transition of our nation from a forward-looking and still-evolving democratic republic into a white supremacist ethnostate ruled by a small group of fascist oligarchs.

"Some years ago, Trump economic adviser Stephen Moore (before he was Trump’s advisor) was a guest on my radio/TV program. I (Thom Hartmann) asked him, 'Which is more important, democracy or capitalism?'

"Without hesitation, Moore answered, 'Capitalism.'

"That philosophy (of capitalism being more important than 'We the People' democracy), has held the Republican Party in its thrall for the past 40 years, and has brought America to this moment of great crisis and danger.

"It has transformed America from a democracy to an oligarchy, and the point of no return is now visible.

"And that presents a true crisis for America, because oligarchy is almost always merely a transitional phase in the evolution of full-blown tyranny and/or fascism."

 

[georgephillip]

LOL!

Donald Trump’s refusal to reveal his tax returns highlights a problem with economic theory

 

[Toddsterpatriot]

I always at least double my money on real estate, and I flip sooner than 10 years.
The CA bust from 2007 to 2010 was not real but a deliberate fraud, with adjustable mortgages written on the British LIBOR, that doubled the payment after a couple of years.
It is true you repay the depreciation if you sell for a profit, but not if you trade with another land lord.

There is a false claim the feds were just not careful enough who they gave mortgages to, but that is false.
Those buyers were making the payments until the payment doubled.
If the ARM had been based on US Prime, then the payment would have gone down instead of up.

The CA bust from 2007 to 2010 was not real but a deliberate fraud, with adjustable mortgages written on the British LIBOR, that doubled the payment after a couple of years.

Are you under the impression that US rates didn't also increase?

Those buyers were making the payments until the payment doubled.

Rates went from what up to what, to make the payment double?

If the ARM had been based on US Prime, then the payment would have gone down instead of up.

Prove it.

 

[Rigby5]

Still looking for your evidence "that the poor are paying much higher rates"?

That is silly because you already showed that unlike businesses, individual are not allow to write off the cost of doing business.
That means they can make no profit and still have a tax liability.
When then means their tax rate is infinite.
What tax rate times 0 profits results in any tax liability at all?
If you say they are taxed on income instead of profits, that is illegal.
No one can legally be taxed on gross income.

 

[Toddsterpatriot]

That is silly because you already showed that unlike businesses, individual are not allow to write off the cost of doing business.
That means they can make no profit and still have a tax liability.
When then means their tax rate is infinite.
What tax rate times 0 profits results in any tax liability at all?
If you say they are taxed on income instead of profits, that is illegal.
No one can legally be taxed on gross income.

That is silly because you already showed that unlike businesses, individual are not allow to write off the cost of doing business.

Salary is different than business profit.

That means they can make no profit and still have a tax liability.

Because salary isn't business profit.

If you say they are taxed on income instead of profits, that is illegal.

You should notify your congressman, immediately!
Let me know what they say.

No one can legally be taxed on gross income.

Who is taxed on gross income? Be specific.

 

[danielpalos]

American government is transitioning from a very limited representative democracy to full-blown oligarchy and there aren't many elected officials pointing this out, imho:

Brutal Capitalism: How America is transforming from a democracy to an oligarchy | The Milwaukee Independent

"What we are watching is the final stage of the 40-year Reagan-started transition of our nation from a forward-looking and still-evolving democratic republic into a white supremacist ethnostate ruled by a small group of fascist oligarchs.

"Some years ago, Trump economic adviser Stephen Moore (before he was Trump’s advisor) was a guest on my radio/TV program. I (Thom Hartmann) asked him, 'Which is more important, democracy or capitalism?'

"Without hesitation, Moore answered, 'Capitalism.'

"That philosophy (of capitalism being more important than 'We the People' democracy), has held the Republican Party in its thrall for the past 40 years, and has brought America to this moment of great crisis and danger.

"It has transformed America from a democracy to an oligarchy, and the point of no return is now visible.

"And that presents a true crisis for America, because oligarchy is almost always merely a transitional phase in the evolution of full-blown tyranny and/or fascism."

It is why equality matters.

The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.

 

[Rigby5]

The CA bust from 2007 to 2010 was not real but a deliberate fraud, with adjustable mortgages written on the British LIBOR, that doubled the payment after a couple of years.

Are you under the impression that US rates didn't also increase?

Those buyers were making the payments until the payment doubled.

Rates went from what up to what, to make the payment double?

If the ARM had been based on US Prime, then the payment would have gone down instead of up.

Prove it.

US rates did not increase, but decreased instead.
That is because the US Prime rate went down with the recession.
Only the British LIBOR went way up.

The 2008 Housing Crisis

Contrary to conservative arguments, the 2008 housing crisis was caused by unregulated and loosely regulated private financial entities—not the federal government’s support for homeownership.

www.americanprogress.org

{...
Government policies that make it more affordable to buy a home were not responsible for the crisis. In fact, consumers who already had mortgages and who had built up equity in their homes were more likely to be targeted for predatory subprime loans than first-time homebuyers.6

Instead of too much government, it was the lack of sufficient government oversight in key areas—including consumer protection, private label mortgage securitization, bank capitalization, and financial markets—that transformed a housing bubble into a global financial crisis.
...
In the early 2000s, the government and GSE share of the mortgage market began to decline as the purely private securitization market, called the private label securities market, or PLS, expanded. During this period, there was a dramatic expansion of mortgage lending, a large portion of which was in subprime loans with predatory features.21 The majority of this mortgage lending was existing homeowners refinancing, with many believing that they were taking advantage of lower interest rates to extract home equity. Instead, they often were exposed to complex and risky products that quickly became unaffordable when economic conditions changed.22 Linked with the expansion of predatory lending and the growth of the PLS market was the repackaging of these risky loans into complicated products through which the same assets were sold multiple times throughout the financial system.

This spread the danger of risky mortgage loans, systematizing the housing market’s risks throughout the global financial system.23 These developments occurred in an environment characterized by minimal government oversight and regulation and depended on a perpetually low interest rate environment where housing prices continued to rise and refinancing remained a viable option to continue borrowing. When the housing market stalled and interest rates began to rise in the mid-2000s, the wheels came off, leading to the 2008 financial crisis.
...
In the lead-up to the crisis, the majority of nonprime borrowers were sold hybrid adjustable-rate mortgages, or ARMs, which had low initial “teaser” rates that lasted for the first two or three years and then increased afterward.37 Many of these products were not properly explained to borrowers who were then on the hook for unaffordable mortgage obligations. Many of these mortgages were structured to require borrowers to refinance or take out another loan in the future in order to service their debt, thus trapping them.38 Without perpetual home price appreciation and low interest rates, refinancing was practically impossible for many borrowers, and a high number of these subprime mortgages were effectively guaranteed to default.39

The rise of subprime lending was fueled in large part by seemingly inexhaustible Wall Street demand for these higher yielding assets for securitizations. Especially in a long-term, low interest rate environment, these loans, with their higher rates, were in tremendous demand with investors—a demand that Wall Street was eager to meet. The private label securities market, or PLS, Wall Street’s alternative to the government-backed secondary mortgage markets, grew significantly in the lead-up to the crisis. The expansion of an unregulated PLS market and the development of the ever more complicated financial instruments tied to it are what transformed a housing bubble into the largest financial crisis since the Great Depression. PLS volumes increased from $148 billion in 1999 to $1.2 trillion by 2006, increasing the PLS market’s share of total mortgage securitizations from 18 percent to 56 percent.40
...}

 

[Rigby5]

That is silly because you already showed that unlike businesses, individual are not allow to write off the cost of doing business.

Salary is different than business profit.

That means they can make no profit and still have a tax liability.

Because salary isn't business profit.

If you say they are taxed on income instead of profits, that is illegal.

You should notify your congressman, immediately!
Let me know what they say.

No one can legally be taxed on gross income.

Who is taxed on gross income? Be specific.

No, since I almost always work as an independent contractor, for me salary is identical to business income.
Which is not at all profit.
I have to deal with everything, like health care.
So it is wrong to charge taxes on income when it should only be on profit.

Except for personal exemptions, all individuals normally are taxed on gross income instead of net profit.
Everyone including individuals and businesses, should be taxed in the same way, only on net profits.

 

[progressive hunter]

No, since I almost always work as an independent contractor, for me salary is identical to business income.
Which is not at all profit.
I have to deal with everything, like health care.
So it is wrong to charge taxes on income when it should only be on profit.

Except for personal exemptions, all individuals normally are taxed on gross income instead of net profit.
Everyone including individuals and businesses, should be taxed in the same way, only on net profits.

what is a net profit for an individual??

 

[georgephillip]

Can you explain the labor theory of value and how it isn't complete horseshit?

The Labor Theory of Value and Surplus Value

 

[Rigby5]

what is a net profit for an individual??

After you have paid your overhead, like mortgage, food, transportation, etc.
To make it easier, I do not mind a flat exemption, but $12.4k is too low.

 

[Toddsterpatriot]

US rates did not increase, but decreased instead.
That is because the US Prime rate went down with the recession.
Only the British LIBOR went way up.

The 2008 Housing Crisis

Contrary to conservative arguments, the 2008 housing crisis was caused by unregulated and loosely regulated private financial entities—not the federal government’s support for homeownership.

www.americanprogress.org

{...
Government policies that make it more affordable to buy a home were not responsible for the crisis. In fact, consumers who already had mortgages and who had built up equity in their homes were more likely to be targeted for predatory subprime loans than first-time homebuyers.6

Instead of too much government, it was the lack of sufficient government oversight in key areas—including consumer protection, private label mortgage securitization, bank capitalization, and financial markets—that transformed a housing bubble into a global financial crisis.
...
In the early 2000s, the government and GSE share of the mortgage market began to decline as the purely private securitization market, called the private label securities market, or PLS, expanded. During this period, there was a dramatic expansion of mortgage lending, a large portion of which was in subprime loans with predatory features.21 The majority of this mortgage lending was existing homeowners refinancing, with many believing that they were taking advantage of lower interest rates to extract home equity. Instead, they often were exposed to complex and risky products that quickly became unaffordable when economic conditions changed.22 Linked with the expansion of predatory lending and the growth of the PLS market was the repackaging of these risky loans into complicated products through which the same assets were sold multiple times throughout the financial system.

This spread the danger of risky mortgage loans, systematizing the housing market’s risks throughout the global financial system.23 These developments occurred in an environment characterized by minimal government oversight and regulation and depended on a perpetually low interest rate environment where housing prices continued to rise and refinancing remained a viable option to continue borrowing. When the housing market stalled and interest rates began to rise in the mid-2000s, the wheels came off, leading to the 2008 financial crisis.
...
In the lead-up to the crisis, the majority of nonprime borrowers were sold hybrid adjustable-rate mortgages, or ARMs, which had low initial “teaser” rates that lasted for the first two or three years and then increased afterward.37 Many of these products were not properly explained to borrowers who were then on the hook for unaffordable mortgage obligations. Many of these mortgages were structured to require borrowers to refinance or take out another loan in the future in order to service their debt, thus trapping them.38 Without perpetual home price appreciation and low interest rates, refinancing was practically impossible for many borrowers, and a high number of these subprime mortgages were effectively guaranteed to default.39

The rise of subprime lending was fueled in large part by seemingly inexhaustible Wall Street demand for these higher yielding assets for securitizations. Especially in a long-term, low interest rate environment, these loans, with their higher rates, were in tremendous demand with investors—a demand that Wall Street was eager to meet. The private label securities market, or PLS, Wall Street’s alternative to the government-backed secondary mortgage markets, grew significantly in the lead-up to the crisis. The expansion of an unregulated PLS market and the development of the ever more complicated financial instruments tied to it are what transformed a housing bubble into the largest financial crisis since the Great Depression. PLS volumes increased from $148 billion in 1999 to $1.2 trillion by 2006, increasing the PLS market’s share of total mortgage securitizations from 18 percent to 56 percent.40
...}

US rates did not increase, but decreased instead.

When? Be specific. And show when LIBOR rose.

That is because the US Prime rate went down with the recession.

The real estate bubble burst before the recession. You knew that, right?

Government policies that make it more affordable to buy a home were not responsible for the crisis.

Did those policies increase demand for homes at all?

Instead of too much government, it was the lack of sufficient government oversight in key areas—including consumer protection, private label mortgage securitization

What about GSE securitization?

PLS volumes increased from $148 billion in 1999 to $1.2 trillion by 2006, increasing the PLS market’s share of total mortgage securitizations from 18 percent to 56 percent.

How much subprime ended up on the books of Fannie and Freddie?

 

[progressive hunter]

After you have paid your overhead, like mortgage, food, transportation, etc.
To make it easier, I do not mind a flat exemption, but $12.4k is too low.

so you want to tax savings????

 

[danielpalos]

No, since I almost always work as an independent contractor, for me salary is identical to business income.
Which is not at all profit.
I have to deal with everything, like health care.
So it is wrong to charge taxes on income when it should only be on profit.

Except for personal exemptions, all individuals normally are taxed on gross income instead of net profit.
Everyone including individuals and businesses, should be taxed in the same way, only on net profits.

Do you get to expense the cost of wages?

 

[Rigby5]

US rates did not increase, but decreased instead.

When? Be specific. And show when LIBOR rose.

That is because the US Prime rate went down with the recession.

The real estate bubble burst before the recession. You knew that, right?

Government policies that make it more affordable to buy a home were not responsible for the crisis.

Did those policies increase demand for homes at all?

Instead of too much government, it was the lack of sufficient government oversight in key areas—including consumer protection, private label mortgage securitization

What about GSE securitization?

PLS volumes increased from $148 billion in 1999 to $1.2 trillion by 2006, increasing the PLS market’s share of total mortgage securitizations from 18 percent to 56 percent.

How much subprime ended up on the books of Fannie and Freddie?

All of them because the whole point of Fannie Mae and Freddie Mac were to buy these holdings, and they were required to buy them by law.
But none of these subprime mortgages were written by Fannie Mae or Freddie Mac.
The mortgages they wrote had the lowest default rates of anyone.

 

[Rigby5]

so you want to tax savings????

What do you mean by "savings"?
If you mean previous profit you already have in the bank from previous years, then of course no.
If you mean profit you made this year that was beyond what you had to pay in costs, then of course yes.