Snowball dollars

**SoylentGreen** · 26th March 2009, 01:58 PM

yourwrongI just think we should find ways of enforcing it better.

That there is the bottom line. The rich have many ways to avoid paying tax. Especially when it is based on income, something that can be manipulated so that even the richest of men can appear poor.
Far more difficult to hide ones spending than it is to hide ones income.

Rather than create an inefficient bureaucracy that continually makes mistakes. It would be an improvement to have the private sector do what it does already. Record the sales and purchases of their business through accountancy and then pay whatever tax is due.

**rmnunez** · 26th March 2009, 02:40 PM

Investing in real estate (buying land) also involves risk as is so evident in the current US financial 'meltdown', one purchases property anticipating its rise in value over time.

Until the recent real estate bubble burst, real estate rose 30% in value per year in most of California, this was the expectation of many who purchased property there in the past few years and many were able to purchase a house, make a few mortgage payments and then sell it for 30% more than they had paid making a nice profit. Some would do this over and again. Loans were easy to get because real estate rose in value so quickly, it was a safe bet the buyer could easily sell the house for a nice profit, in most cases the house appreciated in value at a higher rate than the buyer earned income.

Then the bubble burst, and whoever bought expecting that 30% appreciation per year got seriously burned. Real estate ought to appreciate and traditionally has at about 3% per year, buyers are supposed to live in their house for a few years before selling it, rolling-over their capital gains into the purchase of their next house. The system works well this way. Bankers lent money too easily and flooded the market with cash, this drove prices up.

Eventually those chickens come home to roost. Balloon mortgage payments came due before some could sell their houses profitably, the economy decelerated and real estate prices stopped rising as fast, it became more difficult to sell houses, bankers started making loans more carefully, the market shrank and real estate prices began to climb down. Now those investments are losers. In Los Angeles real estate has lost 20-30% of its value over the past year, in Florida its worse. How are prices in New York City?

I wouldn't describe real etate as a good place to "store" money (unless a 2-3% return per annum is enough). A well-run franchise will return 3-4%, your own business, (if you are successful) will do up to 5%, but it doesn't get much better than that (legally). There are all sorts of exceptions, buying gold, certain commodities, futures, some mutual funds, but this is where it gets risky. If you put it in a bank, you might get 5% on a long-term deposit.

**grandpa** · 26th March 2009, 03:53 PM

Quote by: rmnunez

Investing in real estate (buying land) also involves risk as
is so evident in the current US financial 'meltdown', one
purchases property anticipating its rise in value over time.
Until the recent real estate bubble burst, real estate rose
30% in value per year in most of California, this
was the expectation of many who purchased property there in
the past few years and many were able to purchase
a house, make a few mortgage payments and then sell
it for 30% more than they had paid making a
nice profit.

In other words, some people fell for the bait.

Grandpa h.

**rmnunez** · 26th March 2009, 04:50 PM

"Bait" suggests a lure or trap, the real estate deal was attractive, people were making money buying and selling houses, 30% annualized gain in property value was standard, it was easy to buy a house that would earn more money than the buyer made.

The problem was with the proliferation of loans, credit was too easily made available, anyone could qualify, proof of income and the capacity to meet mortgage payments was of little concern since the property itself was increasing in value fast enough to make the mortgage payments on its own.

Unfortunately the system feeds itself, the easy credit drives prices higher until some trascendental point is reached and at the slightest hesitation the house of cards collapses. An economic slowdown, job losses, oil prices go up, and suddenly real estate stops climbing, then people carrying mortages begin defaulting, banks reconsider easy credit, fewer loans, diminished demand, prices start falling and the whole mess collapses.

**Charlatan** · 26th March 2009, 06:12 PM

Another way to make more money from taxation is if the government taxed itself. This new revenue could run into a new fund, channeling funds there. They would tax their revenue and then sit with more money, as they create money from their own income to use in the house. If they want to tax themselves then they will effectively not do anything to their income, and if that is the case then they would make a new pint where they could get more money from their income, creating money. If they were to tax themselves they would sit with more in hand, as they get thier tax income plus tax on it, actually creating more money to go back into the system.

If they tax their income they saith with the net and that net is worth more than what they had. By paying tax they are actually just creating more money for the system each month, definatley profitable.

**Disinformant** · 26th March 2009, 06:17 PM

Char do you listen to anything anyone ever says to you? you've consistently been ignoring people who have, at the very least, a slight grasp on the economy to prefer your poorly conceived economic views. You think printing money is profitable, still? Stop! Just stop! If you keep this up YOU might be our new Federal Reserve chairmen.

**Cruella** · 26th March 2009, 06:21 PM

A government can't tax itself, but it does tax those who work for it, which is along the same lines, and is something that those people who constantly complain about paying taxes tend to forget about.

Once again, Charlatan, you have the germ of an idea, but it's the wrong one.

**ironeagle** · 26th March 2009, 10:45 PM

Quote by: CruellaDeChaCha

<sits on hands, bites lip, and waits for someone else to take this one>

I'm not surprised didn't i read somewhere that you work for the canadian government, wasn't it an office somwhere , as a tax agent?

**SoylentGreen** · 26th March 2009, 11:53 PM

Quote by: ironeagle

I'm not surprised didn't i read somewhere that you work for the canadian government, wasn't it an office somwhere , as a tax agent?

**Maryjane** · 27th March 2009, 12:37 AM

I'll take it.....the reason cruella didn't respond has nothing to do with her employment. Several of us have tried to explain simple economics to Char in the chat room. He's full of ideas (bless his heart) but not grasping concepts.