OT Mortgage Default Geography plus

[keno]

http://www.cbsnews.com/elements/2008/02/12/business/map3823166.shtml

And there's this ballot question in Massachusetts to eliminate state income tax. Given the condition of real estate, it will be hard for real estate taxes to be the replacement avenue. Interesting to see where this goes. http://www.nytimes.com/2008/09/28/us/28ballot.html?pagewanted=1&hp

keno

[markie]

Cool pic.

Can you please educate me?

Are all of the worst hit states traditional "blue" states and do you think they will continue to be?

Are any/many of the worst hit states the "red" states and do you think this problem will effect how they vote?

[93legendti]

Cool pic.

Can you please educate me?

Are all of the worst hit states traditional "blue" states and do you think they will continue to be?

Are any/many of the worst hit states the "red" states and do you think this problem will effect how they vote?

I'm in Michigan, where we've had the worst economy for~6 years or so...ever since our Democratic Governor took over. She was re-elected in '06. She defeated a Repubilcan candidate who was a billionaire and knew a thing or two about the economy. We had a budget deficit and the esteemed Governor claimed the only thing that would work was to raise taxes...it didn't and we still have the deficit.

This State has B.O. leading in the polls. The Dem. who wants to raise taxes in a bad economy....What's the defiintion of insanity? Repeating the same behavior and expecting a different result. That's the Michigan electorate. I guess they forgot the bust years that were Pres. Carter's presidency.

[bigbill]

I live in Washington State with no state income tax. We have a higher sales tax that just about anywhere so the more you spend, the more taxes you pay. I prefer that system over state income taxes. WA is firmly blue with a dem governor, but I think her days are numbered. We will probably get a repub governor in November, but the state overall will remain blue.

[gomez308]

I live in Washington State with no state income tax. We have a higher sales tax that just about anywhere so the more you spend, the more taxes you pay. I prefer that system over state income taxes. WA is firmly blue with a dem governor, but I think her days are numbered. We will probably get a repub governor in November, but the state overall will remain blue.

I think the sales tax is THE way to go. There is no loophole and it's fair. The more you buy the more you pay. Too simple.

[RPS]

I think the sales tax is THE way to go. There is no loophole and it's fair. The more you buy the more you pay. Too simple.The same argument can be made for a flat income tax – the more you make the more you pay, right?

We only complicate income tax by making it progressive and then applying a billion rules and exceptions.

Can you imagine a progressive sales tax? What would be the effect of paying 10% sales tax on a $100 DVD player and 30% on a $3,000 HDTV?

[dsteady]

I'm in Michigan, where we've had the worst economy for~6 years or so...ever since our Democratic Governor took over. She was re-elected in '06. She defeated a Repubilcan candidate who was a billionaire and knew a thing or two about the economy. We had a budget deficit and the esteemed Governor claimed the only thing that would work was to raise taxes...it didn't and we still have the deficit.

This State has B.O. leading in the polls. The Dem. who wants to raise taxes in a bad economy....What's the defiintion of insanity? Repeating the same behavior and expecting a different result. That's the Michigan electorate. I guess they forgot the bust years that were Pres. Carter's presidency.

You just can't help yourself can you?
:p

dan'l

[RPS]

Are any/many of the worst hit states the "red" states and do you think this problem will effect how they vote?I doubt the average American voter correlates living above their means and/or making poor financial decisions and a poor local economy.

BTW it’s interesting to note that Nevada leads the nation by far.

[Louis]

I think the sales tax is THE way to go. There is no loophole and it's fair. The more you buy the more you pay. Too simple.

And only a little bit regressive.

[Ray]

Cool pic.

Can you please educate me?

Are all of the worst hit states traditional "blue" states and do you think they will continue to be?

Are any/many of the worst hit states the "red" states and do you think this problem will effect how they vote?
Some red, some blue. Most of the worst hit states appear to be high-growth states where lots of people figured that a booming economy made sub-prime loans safe. Of those, California is blue, Georgia and Arizona are red, and Florida, Colorado and Nevada are sort of purple. Arizona might be heading for purple too, but not with McCain running this year. The others (Michigan, Ohio, Indiana, and Illinois) are more depressed rust belt states who are having foreclosure problems because of bust economies, not overextending in boom economies. Michigan and Illinois are blue, Ohio is purple, and Indiana is usually red but may be close this year. No idea how this plays in terms of red/blue - I think its more of a "throw the incumbents out" kind of dynamic. People are just pissed and will pick on any politician they have the chance to.

-Ray

[Ozz]

And only a little bit regressive.
There is no sales tax on food in WA state....just saying. :beer:

[93legendti]

You just can't help yourself can you?
:p

dan'l
I can't help myself from speaking the truth? No, I can't. Sorry. Gov. Granholm is a Democrat; we have the worst economy in the Country; Gov. Granholm did insist on raising taxes to raise revenues; and it didn't work. And yes, our foreclsoures got worse and the State will probably remain blue.

[93legendti]

Some red, some blue. Most of the worst hit states appear to be high-growth states where lots of people figured that a booming economy made sub-prime loans safe. Of those, California is blue, Georgia and Arizona are red, and Florida, Colorado and Nevada are sort of purple. Arizona might be heading for purple too, but not with McCain running this year. The others (Michigan, Ohio, Indiana, and Illinois) are more depressed rust belt states who are having foreclosure problems because of bust economies, not overextending in boom economies. Michigan and Illinois are blue, Ohio is purple, and Indiana is usually red but may be close this year. No idea how this plays in terms of red/blue - I think its more of a "throw the incumbents out" kind of dynamic. People are just pissed and will pick on any politician they have the chance to.

-Ray
Unless it is Michigan. Gov. Granholm would get re-elected again. All the union people, the same ones who lost jobs when they went elsewhere in the country, love her.

[jbrainin]

There is no sales tax on food in WA state....just saying. :beer:

But how much does is cost to register your vehicle? (The income has to be made up somewhere.)

[Joellogicman]

Unless it is Michigan. Gov. Granholm would get re-elected again. All the union people, the same ones who lost jobs when they went elsewhere in the country, love her.

Hardly. East Michigan was a US Auto manufacturing. There is a lot of auto making going on in the US, problem is, the auto making is being done by Japanese, Korean and German companies. There is no way the foreign companies were going to set up in Michigan.

In the meantime, the large furniture companies in the West side of the state continue to expand as well as the higher paying organic and specialty agricultural industries.

[Joellogicman]

This State has B.O. leading in the polls. The Dem. who wants to raise taxes in a bad economy....What's the defiintion of insanity? Repeating the same behavior and expecting a different result. That's the Michigan electorate. I guess they forgot the bust years that were Pres. Carter's presidency.

As long as the US government is sucking up cash seeking a relatively safe home and steady, if not spectacular returns, it will be harder for smaller businesses to find the seed cash needed to expand or start.

Most likely the Michigan voters remember Clinton managed to balance the budget after Reagan and Bush 1's deficits only to see Bush 2 throw the whole thing out of skewer all over again.

[markie]

I am really enjoying this thread. Can we please keep it civil and ongoing?

[kgreene10]

I'm thinking about a few of the prior posts that mention the simplicity of a flat income tax and a sales-tax only system.

Why is a simplified tax system better just because it is simple? I don't think the litmus should be whether the average individual can understand the tax system without investing much time/effort. I think the litmus should be how well the tax system jointly maximizes economic growth AND the general welfare. If such a system needs to be complicated, that's fine with me.

[Ray]

I'm thinking about a few of the prior posts that mention the simplicity of a flat income tax and a sales-tax only system.

Why is a simplified tax system better just because it is simple? I don't think the litmus should be whether the average individual can understand the tax system without investing much time/effort. I think the litmus should be how well the tax system jointly maximizes economic growth AND the general welfare. If such a system needs to be complicated, that's fine with me.
I agree with this. There was an interesting panel on the Stephanopolis show this morning. Will, Gingrich, Reich, and a really good financial reporter who's name I'm forgetting (who's been on a lot recently, trying to explain what's going on). Good balance, more agreement than you'd think, even between Reich and Gingrich, who seem like polar opposites. But one point that struck me was that income distribution or wealth distribution (don't remember which) is more polarized today than at any time since 1928. With that much wealth concentrated at the top, there's a lot less middle class buying power to fuel the economy. That's far from the only problem we've got today, but its a compelling one. A progressive tax helps reduce that polarization somewhat and should help fuel middle class spending (once the middle class gets out of debt). The tax code should be simpler, for sure, with a lot less loopholes. But not flatter imho. Less flat, actually, which is Obama's stated intent. I'm definitely a liberal on this issue.

Its a semi-delicate matter to balance having a progressive enough tax to work but not so progressive that it becomes a dis-incentive to wealth. But, hell, we'll probably never come close to a tax system as progressive as during the Eisenhower period and I don't recall rich people working less hard or generating less wealth. They didn't get to keep as much, but they still got to keep plenty. I fully understand the arguments against progressive taxation, but I don't agree with 'em.

-Ray

[cdimattio]

I'm thinking about a few of the prior posts that mention the simplicity of a flat income tax and a sales-tax only system.

Why is a simplified tax system better just because it is simple? I don't think the litmus should be whether the average individual can understand the tax system without investing much time/effort. I think the litmus should be how well the tax system jointly maximizes economic growth AND the general welfare. If such a system needs to be complicated, that's fine with me.

Complicated? Title 26 of the US Code of Federal Regulations includes 20 volumes and 13,458 pages in total. Throw state taxes in the mix and the code is beyond comprehension. Complexity trumps common sense.

Billions of productive hours devoted to tax preparation. Armies of accountants and attorneys making careers out of taxation. Countless brilliant minds devoted to forming tax saving tax strategy. It does not come free and has a real cost for each one of us. Quite contrary to the thought of maximizing economic growth and the general welfare.

As great as our democracy might be, for me the federal tax code represents what is wrong with Washington. The Federal tax code is a minefield of special interest tax breaks. A few winners and many losers.

[Tobias]

.

[Ray]

Because simple is normally more efficient.

Think of all those talented accountants, attorneys, and IRS types who could be building more schools, hospitals, or teaching others. Just about anything would be more productive IMO and would add to our standard of living.

Additionally, simplicity would make the rules easier to follow and more importantly much harder to circumvent. If everyone paid their share the rest of us wouldn’t have to pay for them.

I’m OK with a flat tax (after an exception amount) or sales tax, or any combination of the two.
I agree that simpler is better up to a point. The zillions of complexities in the tax code are incentives and loopholes that have been added a few at a time over the years to address some particular issue or constituency or other. They're insane. But you could strip those out and still have a very progressive tax code without complexity. I'm not saying getting rid of all of those zillions of provisions is politically possible. But the complexity and difficulty comes from those, not a 3 or 5 step ladder of progressive rates.

-Ray

[cdimattio]

Its a semi-delicate matter to balance having a progressive enough tax to work but not so progressive that it becomes a dis-incentive to wealth. But, hell, we'll probably never come close to a tax system as progressive as during the Eisenhower period and I don't recall rich people working less hard or generating less wealth. They didn't get to keep as much, but they still got to keep plenty. I fully understand the arguments against progressive taxation, but I don't agree with 'em.

-Ray

The tax system is already progressive in format. (Ignoring the economic thought that progressive taxation shifts productive resources away from investment to consumption.)

For me the larger issue relates to the complexity and chosen beneficiaries. One example should suffice. Ask youself why should private equity and hedge fund operators be allowed a capital gains rate of 15 percent instead of the ordinary top income tax rate on their performance fees? (Performance fees represent most of their earned annual income.)

[IMG]

[Ray]

The tax system is already progressive in format. Ignoring the economic position that progressive taxation shifts productive resources away from investment to consumption.

For me the larger issue relates to the complexity and chosen beneficiaries. One example should suffice. Ask youself why should private equity and hedge fund operators be allowed a capital gains rate of 15 percent instead of the ordinary top income tax rate on their performance fees? (Performance fees represent most of their earned annual income.)

[IMG]
Agreed, there are many tradeoffs. I don't pretend to understand where the optimum balance point is economically - I'm sure it shifts somewhat depending on changing circumstances. My only point is that we've had some very strong economies during times of high progressivity and it hasn't seemed to have hampered economic growth much. Maybe it did - maybe growth could have been much higher with less. But the balance seemed to work pretty well.

-Ray

[93legendti]

Hardly. East Michigan was a US Auto manufacturing. There is a lot of auto making going on in the US, problem is, the auto making is being done by Japanese, Korean and German companies. There is no way the foreign companies were going to set up in Michigan.

In the meantime, the large furniture companies in the West side of the state continue to expand as well as the higher paying organic and specialty agricultural industries.

"...Michigan is the leading auto producing state in the U.S even though some of the industry has shifted to less expensive labor overseas and in the Southern United States.[14]..."
http://en.wikipedia.org/wiki/State_of_Michigan#Economy

VW, until recently, WAS in Michigan:

" HERNDON, Va. (AP) _ Volkswagen is moving its North American headquarters from Michigan to Virginia next year and will cut 400 jobs, the German automaker said Thursday.
Volkswagen of America's move from Auburn Hills, Mich., to Herndon, Va., will begin in April 2008 and be completed by the end of next year, the company said.

It said that 600 of the current 1,400 staff will remain at Auburn Hills in call centre and technical services positions, while 400 jobs will be transferred to Virginia. About 150 employees in Michigan are expected to move to Herndon. The company's remaining posts will be cut, Volkswagen AG said."

http://www.autonews24h.com/Auto-Industry/Volkswagen/2084.html

Mazda, Hyundai- KIA, Nissan and Toyota have plants/centers in Michigan:

http://en.wikipedia.org/wiki/List_of_companies_based_in_Michigan

This State that is near last in the Country in foreclosures (7th).

http://www.mlive.com/businessreview/oakland/index.ssf/2008/07/michigan_ranks_7th_in_foreclos.html

MI's economy is among the worst in the Country:

"...In May 2008, Michigan's unemployment rate rose to 8.5 percent,[39] among the highest in the nation, and stayed there through June.[40].."
http://en.wikipedia.org/wiki/State_of_Michigan#Economy

[Tobias]

But you could strip those out and still have a very progressive tax code without complexity. I'm not saying getting rid of all of those zillions of provisions is politically possible. But the complexity and difficulty comes from those, not a 3 or 5 step ladder of progressive rates.

-RayIndeed simple and progressive are two separate issues.

However, I wasn’t arguing for a completely flat tax. Actually, I don’t recall anyone arguing seriously for one.

Most plans would exclude something on the order of the first $40,000 of family income, which means that if a couple makes $60,000 they would only pay taxes on $20,000 (more or less, I don’t recall exact numbers). That’s quite progressive I think.

Half of Americans would pay next to nothing.


BTW, I do think it can be done, but someone will have to find a way to phase it in over a decade or two to allow the system to adjust.

[Joellogicman]

"...Michigan is the leading auto producing state in the U.S even though some of the industry has shifted to less expensive labor overseas and in the Southern United States.[14]..."
http://en.wikipedia.org/wiki/State_of_Michigan#Economy

VW, until recently, WAS in Michigan:

" HERNDON, Va. (AP) _ Volkswagen is moving its North American headquarters from Michigan to Virginia next year and will cut 400 jobs, the German automaker said Thursday.
Volkswagen of America's move from Auburn Hills, Mich., to Herndon, Va., will begin in April 2008 and be completed by the end of next year, the company said.

HQ, not its factories.

Mazda, Hyundai- KIA, Nissan and Toyota have plants/centers in Michigan:

Ford has a controlling interest in Mazda. Believe the Nissan plant was originally a JV with Ford. HyunKia an Toyota presence in MI is small compared to their operations out west and in the South.

This State that is near last in the Country in foreclosures (7th).

MI's economy is among the worst in the Country:

[I]"...In May 2008, Michigan's unemployment rate rose to 8.5 percent,[39] among the highest in the nation, and stayed there through June.[40].."
http://en.wikipedia.org/wiki/State_of_Michigan#Economy

GM, Ford and Chrysler have seen sales drop by almost 25%. The consequent layoffs would put a strain on any economy, especially one built around the floundering giants. Add to the big three the large trend of auto parts suppliers moving to China and Mexico, Kmart merging with Sears and moving to the large and very recently built HQ in Illinois, and a whole lot of other factors shared by the rest of the nation and you have nasty unemployment. Not sure what you would expect a local leader to do to stop such global trends.

Nevertheless, the State's great public Universities continue to attract design and high tech companies which are a bright spot.

[Ray]

Indeed simple and progressive are two separate issues.

However, I wasn’t arguing for a completely flat tax. Actually, I don’t recall anyone arguing seriously for one.

Most plans would exclude something on the order of the first $40,000 of family income, which means that if a couple makes $60,000 they would only pay taxes on $20,000 (more or less, I don’t recall exact numbers). That’s quite progressive I think.

Half of Americans would pay next to nothing.


BTW, I do think it can be done, but someone will have to find a way to phase it in over a decade or two to allow the system to adjust.
Nothing like a severe economic shock to usher in big changes. Maybe the next president, if conditions get bad enough, can pull off a major tax-simplification. No time to kill sacred cows like when the sacredness pales in comparison to bigger problems. Hard to imagine now, but if things get bad enough, all sorts of stuff could be on the table.

-Ray

[93legendti]

...Add to the big three the large trend of auto parts suppliers moving to China and Mexico, Kmart merging with Sears and moving to the large and very recently built HQ in Illinois, and a whole lot of other factors shared by the rest of the nation and you have nasty unemployment. Not sure what you would expect a local leader to do to stop such global trends.

Nevertheless, the State's great public Universities continue to attract design and high tech companies which are a bright spot.

You must work for Gov. Granholm. :D

What I expect is to LOWER taxes to make it more attractive to work here, rather than in Virginia, Illinois, China or Mexico.

Thanks for supporting my point. The dumb Gov. raised taxes and VW (and the auto suppliers you emntioned) moved elsewhere. We still have the deficit and we have terrible unemployment and terrible foreclosures.

But hey! We have great universities! Who cares if the economy sucks?!

And don't forget those furniture companies! Who cares if no one can afford to buy new furniture!

Say hello to Jennifer's husband. I used to work with him. He's a good athlete. Lousy 1rst husband. :crap:

Next, you'll tell me that Kwame Kilpatrick was a good Mayor for the City of Detroit. :D I wonder how prison is treating him?

[Ozz]

But how much does is cost to register your vehicle? (The income has to be made up somewhere.)
$30, plus a regional transit tax (another $30 to $100 depending on value of vehicle (I think))....to pay for a light rail system that goes from downtown to the airport....so tourists don't have to be delayed by commuter traffic gridlock. ;)

Now property taxes on the other hand..... :crap:

[Tobias]

No time to kill sacred cows like when the sacredness pales in comparison to bigger problems.Objectively, the sacred cows are the entitlement programs. Add financing debt and national security and the President doesn’t have much discretionary spending to control or worry about (and fortunately to screw up).

Unless politicians get real about reducing Medicare and Social Security spending, not much will “change”.