The madness of the federal government: 1) File for unemployment benefits 2) Get hit with taxes on the money that they just gave you to survive on [face/palm] I would say that perhaps I’m starting to understand the Austin terrorist’s psychosis, but I wouldn’t want Glenn Beck to bark at me too.
Also, further down the article linked above: “In general, forgiven or canceled debt is considered income by the IRS. That means you may have to pay taxes on this “phantom income,” even though you can’t use it to buy groceries.”
The phantom income is for all the groceries and big screen TVs people bought using home equity loans and then failed to repay.
At one point, Congress was talking about waiving the writedown of mortgages with a short sale as being considered income to the mortgage holder.
If the IRS didn’t do that, fake loan forgiveness is an easy way to circumvent paying taxes on income or gifts. Let’s say your employer held the mortgage on your house, and every year they paid you $1 and would “forgive” an amount equal to what they would have paid you – then you take out a home equity loan since the equity in your home had gone up. When you quit amd sell The house, you pay off the mortgage and HELOC and like magic you have paid no taxes on all your income.
I only vaguely know the details, but this is apparently close to how things work in England. White color workers typically live in housing provided by their employer at subsidized rates. If you impose a high transfer tax on real estate that encourages people to live in housing they don’t own. Neal Boortz is way over his head with his Fair Tax idea – the world is much more complex than a simple tax can deal with, and full of experts who will always find a way around it. The problem that needs to be solved is on the spending side.
Before they made unemployment benefits taxable, GM (in particular) used the unemplyment system as a way to give its UAW workers tax free income. They would waive the requirement that people look for work because GM knew they would call them back in a few months
this created the bizarre practice of reverse seniority which the UAW demanded in their contract – that in the event of layoffs the UAW workers with most seniority had the right to be laid off first. I learned about this in 1984 working at Buick City in Flint. This country didn’t get screwed up in a couple years
Sorry, didn’t mean to get you all worked up. :) I understand it all, but can’t help but point out and laugh at the little absurdities. For those who prefer this convoluted system – have at it
This discussion gets to something I don’t understand. Conservatives and those of us who admire original intentent of white male founders can have all of the talk shows, tea parties, even elect a few like minds here and there but the BS is so deep and so many people and interests (business, military, unions and the government parasites) are dependent upon ripping off the ‘silent majority’ that an earth shaking shift is the only thing that will make a real difference. And mark my words when the quisling parasitic government losers feel backed in to a corner they will not go quietly into the good night.
You’ve got that right. Back before they moved to direCt deposit, hell hath no fury like a social security check arriving a day late – just imagine if it meant a relative you loved was going to die or your child wouldn’t go to college or Mom had to make breakfast and lunch for her children and the kids had to walk to school.
The problem with being Libertarian is nobody will accept life without a safety net. You can’t be “free” to do whatever you want and then shift the costs of your decisions to other people. If you want a collective safety net protecting you, that means ultimately the collective gets to make your decisions for you.