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hacksoncode t1_it95xc9 wrote

Reply to comment by DoobieBrotherhood in Many countries have a "hidden welfare state" for incumbent homeowners, as governments subsidize homeowners through the tax system. The homeownership welfare state is strongest in the US and other Anglophone countries, but weakest in the Scandinavian countries. by smurfyjenkins

So... taxing car use is a subsidy to walkers?

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DoobieBrotherhood t1_it96k8p wrote

No, but taxing cars and not taxing pickup trucks would be a subsidy.

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hacksoncode t1_it97fr4 wrote

That's an entirely arbitrary distinction.

Not taxing something simply isn't a "subsidy", it's letting people keep their own money.

A "subsidy" is giving them someone else's.

Naturally... this is all a semantic argument... and we can't completely forget that money is fungible, but still... it's kind of an abuse of language to call it a subsidy.

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DoobieBrotherhood t1_it97m95 wrote

It’s not a semantic argument at all. It’s a mathematical argument.

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hacksoncode t1_it9ezuf wrote

Ok, well let's look at the mathematics of this particular example them.

Let's say that we decided not to provide a deduction for homeowners' mortgage interest.

Would the business expense deduction for loan interest and depreciation provided to companies renting apartments be a subsidy to them because we decided to start taxing homeowners, when it wasn't before?

Indeed, is any business expense deduction a "subsidy"? And to whom? Or is it just taxing their profit rather than their revenue?

Is a charitable contribution deduction a subsidy for the charity, or the donator? And if the latter... what is it subsidizing, if not the charity?

It's really a lot better to think of only money and services provided to someone in excess of the taxes they pay related to an activity to be a "subsidy".

This stuff is nothing but semantics.

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DoobieBrotherhood t1_it9fnuc wrote

You seem insistent on comparing apples and oranges when the original distinction was very clearly and obviously apples for apples.

I’m happy to discuss more nebulous concepts for subsidies after we put the nail in the coffin of this one. Homeowners and renters are equivalent other than the method they use to pay for housing.

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hacksoncode t1_it9g8sb wrote

> Homeowners and renters are equivalent other than the method they use to pay for housing.

Sort of similar, yes, but you have to admit that renters will pay less rent in an environment where the lessor can deduct their business expenses than when they can't... all else being equal.

So is that savings due to the business deduction a subsidy to them or not?

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DoobieBrotherhood t1_it9hs0s wrote

The building of the home, marketing of the home, selling of the home — hell, every expense of every business that touches the home is tax deductible.

The deductibility of business expenses is not a subsidy, although that is a point worth arguing in a different conversation (it involves looking at whether we should encourage or discourage vertical integration and mergers in general).

This is just about homeowners versus renters. They are equivalent. If you walk down any residential street, some residents are owners and some are renters. They receive the same product just with a different method. And they do not receive the same tax benefits.

We are subsidizing the ones who have more capital and not subsidizing the ones with less capital. The effect of the subsidy is to increase the annual income of the wealthier families to the detriment of the less wealthy families (in general).

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