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Jim Van Meerten
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Jim Van Meerten is an advisor to Marketocracy Capital Management and writes on financial subjects here and on Barchart Portfolio Blogs and Seeking Alpha. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and... More
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  • Robama Hood continues to rob from the "rich" 17 comments
    Jul 8, 2010 3:04 PM

    The Robama Hood administration continues in its quest to rob from the "rich" and give to the "poor". For some reason they have made it their quest to punish families making over $250K and redistribute their "ill gotten" gains to those making less than $40K.

    His latest target is your mortgage interest deduction (MID). The Tax Policy Center notes that those making under $40K get an MID of only $91 while the filthy rich making over $250K get an MID of $5,459. The Robama Hood administration estimates that the MID will "cost" the Treasury $131bn in 2012. Can you believe that they think the American homeowner is robbing the Treasury. Since when is the Executive Branch's mission to maximize taxes?

    Did my parents raise me wrong? They taught me to study hard and get as much education as I could so I'd land a good job. They also instilled in me that I should find that right person with similar values, get married and have kids when you can really afford them.

    I'm not going to make any moral judgement but let's compare 2 life styles:

    Life style number one is a married couple who kept their noses to the grindstone and applied themselves in school until they both had advanced or professional degrees. After they established themselves in their respective careers brought children into their world.

    Life style number two are players who don't take advantage of the free education offered all children in the USA and drop out of school. They together or individually decide that having children is a right not a responsibility so just have kids even if you are single or can't afford to raise them.

    Which lifestyle do you think is more likely to make over $250K and which one is more likely to make under $40K?

    The Congressional Budget Office is recommending replacing your mortgage interest deduction with a 15% tax credit and lowering the limit on the size of you eligible mortgage.

    Do we live in the United States of America -- The Land of Opportunity or Sherwood Forest?

    Jim Van Meerten is an investor who writes on investing here and on Barchart Portfolio Blogs. Please leave a comment below or email JimVanMeerten@gmail.com.

    Disclosure: No positions mentioned

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Comments (14)
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  • Tom Armistead
    , contributor
    Comments (6082) | Send Message
    Jim, the mortgage deduction is a subsidy, to everyone involved in the homeownership game. To invest in a house, with untaxed funds, and then receive the capital gains in due course with no tax consequences, is a huge advantage.


    It just isn't a right of any kind, and certainly not a property right, where one is entitled to complain if or when it is withdrawn.


    It is possible that the tax preferences, unlimited as they are, encouraged the housing bubble, by enticing people into investing in larger houses on larger lots than they would otherwise have considered desirable.


    No robbing from the rich here, sorry.
    8 Jul 2010, 06:47 PM Reply Like
  • Jim Van Meerten
    , contributor
    Comments (651) | Send Message
    Author’s reply » Tom,


    Does that mean you agree with a flat tax or maybe a national sales tax. If 35% is my fair share then it should be everyone's fair share.


    Since both of us are retired CPAs we both remember that all the loops and turns of the tax code is how we made our living.


    Sometimes I think a better name of the US Tax Code was the Full Employment for CPAs code.
    9 Jul 2010, 09:03 AM Reply Like
  • Tom Armistead
    , contributor
    Comments (6082) | Send Message
    I'm not a CPA, accounting to me was the easiest career to switch into after I learned that insurance was not something I was cut out for.


    On taxes, I subscribe to Buffett's view that citizens of the US benefit from the national defense budget, infrastructure, financial security and rule of law provided by our government, more or less in proportion to our material wealth. I dislike the inefficiency and waste, but nevertheless I am glad to pay taxes in due proportion to everyone else.


    One thing for sure I do not want, and I see a lot of it, is that there are entire classes and groups of my fellow citizens who make far more than I do and pay proportionately less taxes, the beneficiaries of loopholes that are carefully buried in the fine print on mammoth tomes of legislation, artfully appended to necessary and legitimate legislation, the tolls extracted by those who would otherwise stymie all progress.


    A simpler tax code would be fairer. The only problem would be that it would open the whole game wide open again, a fresh field for new loopholes to be created in the ongoing game of cops and robbers between tax collectors and tax evaders.


    A lot of this is about economic inequality, something that has been on the rise in this country for a very long time. Unfortunately we human beings are not created equal and the difference compounds year after year, and the wealthier and more powerful a man gets the less he is concerned with the rights and welfare of others.


    So very sadly I conclude the government has to step in and reduce the inequalities, rather than exacerbate them by preferential treatment for the wealthy and well-connected.
    9 Jul 2010, 09:50 AM Reply Like
  • James Shell
    , contributor
    Comments (415) | Send Message
    Problem: The tax system has developed into a way to modify behavior, and do social engineering rather than a way to raise money for the government.


    Examples: Home Mortgage Interest Deduction, child care tax credit, capital gains and other activities taxed at a different rate than other activities.


    When we got to the point where we started to pick and choose, we set this whole thing up. Now, a major activity of any business of big enough size is to try to line up tax breaks and other benefits. Example: Any farmer in the country.


    What will it take to get it to stop?
    9 Jul 2010, 11:37 AM Reply Like
  • Jim Van Meerten
    , contributor
    Comments (651) | Send Message
    Author’s reply » Flat tax?
    9 Jul 2010, 12:47 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (6082) | Send Message
    I agree with James, the amount of social engineering implicit in the tax code is mind-boggling, and some behavior that is rational economically under the incentives in place may not be the best thing for the country as a whole.


    Plus when the government takes money from one person and gives it to another bad feelings arise, the feeling of being cheated while others milk the system.


    Radical changes to the tax code might very well destabilize the economy, since incentives and rewards would shift so rapidly. Probably better to publicly announce the intention of moving gradually toward a much simpler code with less social engineering, make the changes gradually over the course of a decade, and in the mean time collect taxes fairly and effectively, so that nobody gets to cheat.
    9 Jul 2010, 01:10 PM Reply Like
  • Jim Van Meerten
    , contributor
    Comments (651) | Send Message
    Author’s reply » If you really want to see social engineering let's discuss the public education system
    9 Jul 2010, 02:21 PM Reply Like
  • alf hanna
    , contributor
    Comments (144) | Send Message
    Jim, even your example is wrong. I've known plenty of people who have made small fortunes by having dropped out of school, myself included. A bunch of them are homebuilders, and other craftsmen who rolled the dice in the last boom, and are now out of work, waiting for the vast inventories of houses to drop. Hell, even Bill Gates doesn't fit your picture, and he and his dad are arguing for more taxes for the rich!


    There are an awful lot of people out in my neck of the woods (away from a major metropolitian area), that are pretty much convinced that us stock market players are to blame for their current economic woes, (and frankly, there's a lot of truth in that too!), and the notion of taxing people more who are currently making a lot of money instead of the ones not making a lot of money seems pretty reasonable to them. You'd not want to walk into a bar in my town and talk about 'blaming' the folks who dropped out of high school for their economic predicament! Heck, I don't ever talk to people about my investing successes to most folks. It's considered a less than honorable profession out here!


    The American people have come to expect an awful lot out of their government. Raising taxes nominally seems a whole lot more useful than slashing programs to any politician, regardless of their party or election bs. You might want to do some more reading about the pros and cons of a 'flat tax". That would totally eliminate your mortgage deduction that you claim is a benefit to the economy and a benefit to those earning more than $250k.


    It's best to stick with stock market theory, and leave political discussions to barroom chat...
    26 Jul 2010, 09:32 AM Reply Like
  • Jim Van Meerten
    , contributor
    Comments (651) | Send Message
    Author’s reply » My comments are general comments. Although some drop outs are boot strap success stories, there is a general correlation between income and level of education. There is also a general inverse correlation between those on public assistance and in jail and level of education.


    For some reason the Obama administration considers the successful citizens, those making more than $250K as evil, greedy and selfish. These are also the people how create companies that create jobs, They are the ones who fund their churches, charities and colleges.


    Why are we targeting these people instead of using them as examples of what every youth in America can accomplish if they took their education seriously.


    College and Graduate students are out future not rock stars, actors or athletes.


    Just my opinion.
    26 Jul 2010, 12:27 PM Reply Like
  • alf hanna
    , contributor
    Comments (144) | Send Message
    I'm bailing on this nonsensical thread. You had some interesting stuff to say some time ago about investing but when you go off onto a Fox Rant, you lose me. I'm interested in building bridges, not tearing people down. Best of luck...
    27 Jul 2010, 01:30 AM Reply Like
  • Jim Van Meerten
    , contributor
    Comments (651) | Send Message
    Author’s reply » Alf - The first half of investing is what you make, the rubber meets the road on the part of how much you get to keep
    27 Jul 2010, 06:41 AM Reply Like
  • varan
    , contributor
    Comments (5277) | Send Message
    What an example of greed and condescension that has got us into the mess to begin with.


    Most people making under $40K that I know are hard working souls raising families as best as they can.


    Looking at bar-charts all day is not exactly backbreaking work. You are benefiting from the distorting effects inherent in the capitalist free market system that allow some people to make tons of money unequal to the amount of brain power or muscle power that is needed for their work - you are neither a brain surgeon, a physicist, or a mathematician, nor a short order cook or a fruit picker. All glory to you. Enjoy it all you can. But buy yourself a dose of humility and empathy.
    10 Jan 2012, 08:40 PM Reply Like
  • Jim Van Meerten
    , contributor
    Comments (651) | Send Message
    Author’s reply » Varan - You are way off base. I have worked since I was in the 7th grade and also saw a need for education and marketable skills. While working full time I also earned a BS in accounting and a Law degree. My wife also worked full time and earned her two degrees in night school. Along the way I passed the CPA exam, Certified Internal Auditor exam, Bar exam, and got a Supervisory Principal security license. I even got certified in middle school education in both Science and Social Studies. While working I taught college night school in both Law and Accounting at both the undergraduate and graduate level to make extra money.


    You may look down on me for 40 years of working hard, improving my skills by being a life long student, not living beyond my means and taking personal responsibility for my self by saving for my own retirement but I won't accept your scorn. What I did can be done by anyone who isn't lazy.


    If someone is working full time and only making $40K a year then he saw no value in getting an education, getting vocational skills or applying to some union apprentice program. Even a manager of a fast food joint makes more than $40K a year.


    Varan - Just showing up for work isn't enough. If you are not continually working to make sure you have the skills and education required for a good paying job then all you deserve is the minimum wage pit you live in.


    Quit complaining and improve yourself
    11 Jan 2012, 09:08 AM Reply Like
  • varan
    , contributor
    Comments (5277) | Send Message
    I neither complained about anything, nor called you lazy. You are responding to somethings that I did not write.


    As I said, all glory to you. I must say, though, that education that does not inculcate empathy for other people's situations in life is not complete, no matter for how long it is pursued.


    11 Jan 2012, 10:14 AM Reply Like
  • whyland
    , contributor
    Comments (30) | Send Message
    I have great empathy for anyone who is incapable of helping him or herself. It seems, however, that for every person in such a predicament there are dozens more who have the ability but simply don't make the effort. Instead of recognizing the relationship between their failure to make the effort and their predicament, they refuse to accept responsibility for their predicament. While its a great honor to redistribute income to the few who really who can't help themselves, its a completely different deal when comes to those who are able but lazy.
    20 Sep 2013, 02:19 PM Reply Like
  • Jim Van Meerten
    , contributor
    Comments (651) | Send Message
    Author’s reply » Every child and elderly should not go to bed hungry or have their ailment unattended - to the rest I say get a job!
    21 Sep 2013, 12:36 PM Reply Like
  • Araceli
    , contributor
    Comments (2) | Send Message
    Hats off to you for all that education . Thanks for all the contribution ,I enjoy reading pros and cons messages.
    3 Dec 2015, 03:14 AM Reply Like
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