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Politics : American Presidential Politics and foreign affairs
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To: TimF who wrote (43714)6/9/2010 9:03:41 PM
From: DuckTapeSunroof  Read Replies (1) of 71588
 
Re: "My point is that it doesn't lower the top rate,"

Correct, it doesn't. (Still that rate has been lowered many times over the last couple 'o decades already....)

Re: "and may not lower rates at all (I'd have to look up the details to tell that, its only obvious that it doesn't lower the top rate)."

You are incorrect on that... go back to the originally posted article: you will see the other rates are *lowered*.

Re: [After all, why should ONE FORM of capital raising - going into debt - be FAVORED by the tax codes over ALL OTHER FORMS of capital raising (such as savings... equity issuance, etc.)?] "For personal non-mortgage debt it no longer is (but it used to be before Reagan)"

True. Credit card debt and such is not any longer deductible (one of the reasons people loaded up so much on second and third mortgages in this recent financial bubble/bust... how did *that* particular enticement to more and more consumer debt work out for society?)

That is also one of the larger points: the American society REALLY does not need our tax codes to be promoting more debt like it does. If anything we would be better off with more SAVINGS which could go into Capital formation.

The boom/bust cycles would be less severe, too.

Re: "For corporations, well corporations are taxed on profit not revenue. If they have to pay a lot of interest they might not be making any profit...."

(Actually some taxes go both ways....)

But the larger point remains the same as with individuals: an excessive accumulation of DEBT (artificially encouraged and nurtured and promoted by the structuring of the tax codes...) produces INSTABILITY in the economic system. Boom/Bust cycles. 'Get rich quick while you can before the whole house of cards comes collapsing down' psychologies and behaviors by both individuals *and by* corporations. And our corporations (especially financial sector) remain some of the more heavily indebted in the whole world....
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