What Would a Real War on Poverty Look Like?

Buy local stop running a deficit and quit living a throw away life.

Buy local

That certainly would help small businesses if a high enough population percentage did so.

stop running a deficit

Would help long term (very long term) by reducing the taxes that need to be collected.

quit living a throw away life.

A good point

biochem wrote:Since I believe to effectively fight poverty we have to save the middle class...

To save the middle class

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2b. Capital gains taxed at the regular tax rates.

3. Housing affordability

The middle class can't afford to buy (or in some markets even rent) housing in a significant number of major cities. It's a supply and demand issue. Low supply High demand. And it's driving housing prices though the roof! Zoning laws need to be relaxed to allow increased housing to be built, height restrictions for example. But the relaxation of these requirements should take place slowly in order not to shock the housing markets. Zoning permits which meet all requirements should be approved in a timely fashion, not delayed for years unless the applicant donates to the mayor's campaign.

snip.

Capital gains applies on home sales too. By increasing capital gains tax on homes, there will be increased incentives for people with capital NOT to sell their homes. They will find other arrangements to recoup the wealth contained in their homes. That wealth was accumulated over a very long period of time.

Furthermore, the increased capital gains tax will make securities less attractive. More wealth will flow into hard assets like property.

So people with capital will buy the increased number of homes that deregulation and increased capital gains tax will make available and then hold on to those homes. they will rent or find some other arrangement to generate the income they need. That means the increased amount of homes available will not be available to middle and lower income individuals.

How then does this help the middle class? This combination will make a steeper and taller barrier for the folks who want to improve their economic situation. However, once they make it up to the next level, staying their is now easier. Sort of like how things are now.

Better to eliminate income tax and go to a consumption tax. The more people consume, the more they should be taxed. This encourages saving which provides capital for increased economic activity. Eventually, the economy will reach an equilibrium between the optimal rates of saving and consumption based on the tax rates. Lower consumption tax rates increases economic activity, increased rates lowers economic activity relative to saving.

We have capital gains tax at the individual's income tax rate.
It is applied to investment properties but not to the principal residence.
Negative gearing (ie: write off losses against your income) also applies to investment (rental) properties.
This leads to the middle class having their own residence and at times some properties to rent out. Upside is that it increases the supply of rental properties, downside is that it keeps the house prices up which inhibits people getting their own home.

Better to eliminate income tax and go to a consumption tax. The more people consume, the more they should be taxed. This encourages saving which provides capital for increased economic activity. Eventually, the economy will reach an equilibrium between the optimal rates of saving and consumption based on the tax rates. Lower consumption tax rates increases economic activity, increased rates lowers economic activity relative to saving.

I'm OK with replacing the income tax with a consumption tax if the amendment allowing the Federal income tax was repealed. Otherwise given how addicted the politicians are to spending other people's money, we'll wind up with both at high levels.

Or if you want both an income and a consumption tax, that would work only if there is a constitutional amendment. Herman Cain's 9.9.9 is doable that way, but it has to be constitutionally limited otherwise we will eventually get 10.10.10 then 11.11.11. etc. Those politicians just can't stop spending money!

Agreed. The best option is to have tax revenues strongly linked to economic activity. Keeps the public and private sector incentives aligned.

biochem wrote:

Better to eliminate income tax and go to a consumption tax. The more people consume, the more they should be taxed. This encourages saving which provides capital for increased economic activity. Eventually, the economy will reach an equilibrium between the optimal rates of saving and consumption based on the tax rates. Lower consumption tax rates increases economic activity, increased rates lowers economic activity relative to saving.

I'm OK with replacing the income tax with a consumption tax if the amendment allowing the Federal income tax was repealed. Otherwise given how addicted the politicians are to spending other people's money, we'll wind up with both at high levels.

Or if you want both an income and a consumption tax, that would work only if there is a constitutional amendment. Herman Cain's 9.9.9 is doable that way, but it has to be constitutionally limited otherwise we will eventually get 10.10.10 then 11.11.11. etc. Those politicians just can't stop spending money!