<p>Yes it is rational. I didn’t negatively judge this. </p>
<p>Are we going to tax everything or are still going to have loopholes like tax free real estate exchanges? And capital gains disappearing at death?</p>
<p>I should call the IRS and ask them if I need to keep the cost basis for currencies. It’s not clear to me whether or not I need to do this.</p>
<p>On knowing your assets - it’s pretty easy with spreadsheets these days and I keep our stuff in a spreadsheet but my wife doesn’t really seem to care that much about it when I show it to her. I’d like her to learn my notebooking software too in case I get hit by a train but, no interest.</p>
<p>Son’s not that interested either. I should try our daughter.</p>
<p>If you think that you’re going to get divorced, I would think that you’d want to look at the household finances or have your accountant do so.</p>
<p>“On knowing your assets - it’s pretty easy with spreadsheets these days and I keep our stuff in a spreadsheet but my wife doesn’t really seem to care that much about it when I show it to her. I’d like her to learn my notebooking software too in case I get hit by a train but, no interest.” </p>
<p>Lol. Yeah… I understand.</p>
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<p>That would be just like throwing out the regular tax rate system and leaving the AMT as the main tax rate system (three rates, 0%, 26%, and 28%, though the amount of AMT income in the 0% bracket ranges from $39,375 to $78,750 in the current system). However, the current system still allows AMT taxpayers to pay lower rates for long term capital gains.</p>
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<p>In principle, the basis should be passed along with the inheritance (or the estate can pay the tax on capital gains to step up the basis). However, that can be a nightmare of trying to find the records for some deceased people’s transactions (although new IRS rules for brokerages to track basis of securities positions opened in 2012 or later should help going forward in the long term).</p>
<p>Under the current system, capital gains can also be made to go away by donating the appreciated asset to charity. This can be a fairly big loophole that does not require dying to be able to use.</p>
<p>The mortgage interest deduction costs much less than everyone thinks:</p>
<p>[Mortgage-interest</a> tax deduction costs less than feared | Boston Herald](<a href=“http://bostonherald.com/business/real_estate/2013/02/mortgage_interest_tax_deduction_costs_less_than_feared]Mortgage-interest”>Mortgage-interest tax deduction costs less than feared – Boston Herald)</p>
<p>AMT goes up to 35% for a broad range of income, as I unfortunately discovered this year.</p>
<p>dstark - Are you getting rid of the standard deduction, too?</p>
<p>And the new tax changes eliminate up to 80% of itemized deductions and 100% of personal exemptions for high income people.</p>
<p>So we have already moved towards eliminating deductions.</p>
<p>I am not getting rid of anything. Everybody has their own ideas…</p>
<p>You have an opinion about other deductions, what about this one?</p>
<p>About the standard deduction?</p>
<p>That’s fine…</p>
<p>I am not beholden to any tax structure…</p>
<p>I am not the rule maker. </p>
<p>I am reading other people’s opinions.</p>
<p>Of course it will be hard to reform the tax code while donations are accepted from lobbyists and super pacs that influence legislation. Take the nominee for treasury secretary: Jack Lew. Made $1 million from citigroup when they were bailed out from the government and also has questionable cayman island investments. not exactly an improvement over timothy geither and his tax evasions.</p>
<p>Get rid of all tax loopholes and they are going to have to add a VAT to pay off the debt.</p>
<p>The VAT is coming. The loopholes will stay.</p>
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I think many people don’t really understand other people’s taxes (let alone their own, lol), so it’s easy to point at something you are not using yourself and say “eliminate that”. We have rental properties, and certainly couldn’t survive if we had to pay the current tax rates on ALL of the incoming rent.</p>
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<p>Lol, it only costs the gov’t 70 billion instead of a 100 billion bucks a year…</p>
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<p>I think that necessarily the standard deduction would have to be reduced too. </p>
<p>All of these calculations about how much certain deductions “cost” have implicit in them that the full amount of the deduction would be taxable. If mortgage interest becomes non-deductable, for instance, that would just push a lot of people to the clip point where they dont file a schedule A and instead take a standard deduction.</p>
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What I find interesting, and also massively irritating, is how a few years ago the mortgage interest deduction was going to cost $135 billion in 2013, and all of a sudden…</p>
<p>It’s half of that.</p>
<p>How does a mistake of this magnitude get made? How can I trust any numbers about what any other deductions actually cost, when confronted with this kind of chicanery, or outright incompetence?</p>
<p>Interest rates dropped…</p>
<p>Home prices dropped so mortgages are smaller…</p>
<p>More cash buyers…</p>
<p>Fewer new homes sold…</p>
<p>No chicanery…</p>
<p>The reason that I think it important to get rid of all deductions/credits/loopholes (whatever one wants to call them), is that it would immediately put thousands of lobbyists out of business (I can dream, can’t I).</p>
<p>[Decrease</a> in Overall Debt Balance Continues Despite Rise in Non-Real Estate Debt - Federal Reserve Bank of New York](<a href=“http://www.newyorkfed.org/newsevents/news/research/2012/an121127.html]Decrease”>Decrease in Overall Debt Balance Continues Despite Rise in Non-Real Estate Debt - FEDERAL RESERVE BANK of NEW YORK)</p>
<p>I seriously doubt that interest paid on mortgages has dropped 50% in the last 3 years.</p>
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Getting rid of the standard deduction would be seriously regressive. Among households making $50K or less (which is about half of all households), only 18% itemize their deductions.</p>
<p>[Most</a> Americans Don’t Itemize on Their Tax Returns | Tax Foundation](<a href=“http://taxfoundation.org/article/most-americans-dont-itemize-their-tax-returns]Most”>http://taxfoundation.org/article/most-americans-dont-itemize-their-tax-returns)</p>