Tuesday, February 24, 2009

Taxes and not paying them

Does anyone else have a problem with that commercial on TV these days that highlights how some law firm will work to get your owed back taxes reduced? I do. No wonder we don't have the funds to adequately perform routine park maintenance, or build further rapid transit systems, or just maintain the roads that we have. The commercial goes something like this...Do you owe back taxes? I owed over $50,000 and with their help, I paid only $2,000. This goes on and on. It shows a Doctor who owed $3 million in taxes but only paid $1 million. I realize that is no small amount, but come on? They were liable for the full bill, where is the tax payment when the money being made to warrant that bill was coming in? I pay my taxes. Do I wish they were less? Sure, but these people are ridiculous and the law firm that represents them is even worse.

Oh...and what the hell is the deal with Marion Barry? How can you be in serious threat to go to prison for not paying your taxes and then not pay them on time for the 7th time in 8 years? Do you expect me to believe that a DC councilman does his own taxes and since he was sick, couldn't submit them? He has an accountant...throw the both of their asses in jail.

Come on DC (and I really mean you Ward 8? folks), Barry has shown over and over again that he has no business being in office. I understand that in general your part of town is a little down on your luck and that Barry is much like many of you, but come on.

Thursday, February 5, 2009

Economic Stimulus on Low Rate Home loans? Lets give it a try.

So, this morning on NPR, they were discussing the idea of government backed home loans set at 4%. This would put money in the pockets of homeowners and make the government a little bit of money. I suggest that it would make the government more than a little bit of money. The discussion hinged on the government being able to sell T-Bills at 3% interest and then loaning the money at 4%...therefore making 1% on the loans. Excellent idea. Puts money in the pockets of homeowners and puts money in the pocket of the government...win win.

Here is where it gets better for the government and a little less beneficial to the homeowner. Note, I say a little, because it would still equal more money in the pockets of the homeowner. The reason it makes more money for the government is due to less interest being paid by the homeowner, therefore resulting in less interest deductions on their income taxes resulting in MORE tax being owed to the government. This program would cost the government nearly nothing as it would probably be routed through Fannie or Freddie and it would make more money for the economy by putting more money in our pockets and make money for the government by the money earned from interest and higher taxes.

Now, you may say...why pay the lower rate if it will result in higher taxes. Well, for me, I currently pay about $2500 a month for my mortgage (this includes principle, interest, property taxes, & insurance). At 4%, I would pay about $2050 a month. This results in approximately $500 a month back in my pocket. Now, with that being said, I would probably end up owing an extra $200 a month in taxes due to lower interest deductions. At the end of the year, I would still have and extra $3600 dollars. And the government, just from me, would have an extra $3500.

Imagine if the millions across the country refinanced in this manner? Not only would the economy get a boost from people having more money in their pockets, the government would have BILLIONS more to pay down the national debt, build subways, finance Social Security.

Oh, and the other benefit would be that this would perhaps make peoples mortgages more affordable if they are in risk of defaulting...a much needed thing these days.