How many of you remember when the interest on your car loan was deductible?

I remember the last years of the Carter Administration. I bought a house in Mill Valley, California. Within a month of buying it, I was offered $100,000.00 more than I paid for it. I sat down with my accountant, who was also a good friend and someone I grew up next door to. He told me that the short term capital gains rate at that time was 90%. Thus, if I sold the house immediately, my net profit would have been $10,000.00 after taxes.

That year, we did my taxes. I was allowed to deduct the interest on EVERY loan I had. My car loans, my credit cards, everything. If you leased a car, you could write off the entire payment. Additionally, long about May, you would reach the withholding limit on your Social security payments and start seeing the additional income on your paycheck.

St. Ronnie took care of all that. Now, If I can somehow manage to keep my house out of foreclosure, I can still write off my mortgage interest but nothing else.

Tax cuts my ass!

The workers were once again fucked by our feudal lords.

Welcome to the neo-feudalism.

I bet most of you didn't know this.

all charitable contributions were deductible whether you itemized your deductions or not.

I'm 23. Man, Reagan was great :puke:

We, the workers of the world have been asked to bear the burden while our masters frolic.

mileage to & from the Dr.

it was so much a pack multiplied by how many packs you estimated you bought that year. I remember my cousin telling me that even though his mother never smoked, she always was a smoker on her tax return. Yea I sure do remember.

A tax specialist told me back then to also keep every receipt you got for the whole year. Just make a box and drop the receipt in when you take the items out of the bag. If you are ever questioned about deducting actual sales tax, just bring in the box...unsorted...put it on the agents desk and say "here's my documentation". Most of the time, they just stamp the return accepted as filed rather than sort through all that mess.

taxes from your Federal income if you could prove you paid them.

But you can't have everything.

Check with Tiger.

Thank you for enlightening me tonite!

Biggest deficit increase in the history of the country.

Biggest tax increase in workers since I don't know.

Government sucks. Elect us and we'll prove it.

from a savings account was exempt from taxes and I think RR took that one away. I know RR started taxing unemployment compensation, he said unemployment was just a paid vacation for Union workers.

On half my income. I guess having a knot in your stomach 24/7 is his idea of a vacation.

Just like you said..you could deduct the interest you paid on all loans, credit cards, etc. And not only that...when you had a savings account, you collected really good interest rates on your money.

If ever there was a time to bring something like back...it's now.

You don't remember. You don't know, but you should. It wasn't always like this and it doesn't have to stay this way. It has been different in the past and can be again.

I hear my family talking about it, and I don't understand why it changed and why it isn't brought back. And I have no answer for that. So I'm glad someone like you brought it up. Thank you! K&R!

taxed either.

deductible.

Every dime you spent on medical care AND medical insurance was deductible.

I don't get it.

Every time they take a dime out of your pocket and give you nothing in return, you are being taxed!

Look at the credit card bill he signed this year...no caps. We are at the mercy of banks that hold credit cards,and mortgages, etc . They get interest free loans via our tax dollars, for bailouts. I wish I could believe things will change, but I don't anymore.

I was telling this to my 20 year old son and his friends not long ago. They thought I was joking.

The post-Reagan generations haven't a clue on how it was and could be because they are 'trained' to accept what they are not given.

Back in the day you could make a modest income and live quite nicely. We had a house, two cars, a cabin & property, took nice vacations, raised & educated our children and celebrated a prosperous Christmas. Nowadays, you literally break the bank just to provide the fixings for a Thanksgiving dinner.

The betrayal is glaring.

burden of taxes in this country. His rationale: if the rich paid less taxes, their wealth would somehow "trickle down" to the rest of us. Of course Bush the Elder termed the Raygun economic folly: voodoo economics, a term he soon forgot once he was elected Vice Caretaker... er, I mean, Vice President.

And those businesses employ people. But it doesn't seem to work that way.

It was all part of the largest transfer of wealth in history.

In China.

"$100,000.00 more than I paid for it."

So, a disgustingly rich person is claiming that post-Reagan, they couldn't make $100,000 in a month, for doing absolutely nothing... they'd only make $10,000 that month, for doing.... ABSOLUTELY NOTHING.

..and then complaining about the tax benefits, because while they could afford a $100,000+ house (assuming it was worth $1 when they bought it), their ability to avoid taxation was reduced.

Is this a parody that I'm missing?

He wasn't complaining about ONLY being able to make $10,000. It was an illustration of the results of Reagan policies.

taxes were so high that they discouraged "flipping" and encouraged you to keep your capital invested. That is what I did. Kept the house. Unfortunately, at that same time, Paul Volker, then head of the Fed,shortly before the election spiked the discount rate, supposedly to "whip inflation". Interest rates on home loans climbed into the 18% range, the job market collapsed because no one could afford to borrow and you couldn't sell a house to save your life. This little stunt, combined with the deal Ronnie made with the Iranians to not release the hostages until inauguration day insured Ronnie's election. By the way, this "rich" guy was a construction worker. His wife was a real estate Agent. We worked our asses off and made a comfortable living until then. With the collapse of the real estate market and all construction work, we ended up loosing everything we had worked all of our lives for including the house. Rich indeed.

they started the "earned income credit" where if you only earned so much they would give so much extra for dependents even though you did not earn it or pay taxes on it. I know of several people that only work for part of the year so they can qualify for it, and most of them get the limit, some get up to 5,000.00. Then they brag about all the money they got from their income tax return. Between welfare and their income tax return, they make a pretty good living.

My father, who did taxes for HR BLock for 30 some years, stated the 1986 tax reform under ole Ronnie Raygun fucked up everything from the middle class and he was a republican at the time..

...was doing to the middle class.

I also remember when unemployment benefits were not taxed and when there was no limit to how much money you could put into your 401K tax deferred.

I also remember when Social Security and unemployment benefits were not subject to income taxes.

And what was the point of dong away with it? It stimulates borrowing and purchasing. The auto industry should have fought it. Another Raygun fail.

I used to buy a new car every few years or so. No more.

so im not sure how i feel about your story.

They tightened up the whole tax code, actually. I remember that I paid over 2k more from one year to the next.

Ronnie, the man advertised as a tax cutter, was not.

For disclosure purposes, I am a tax CPA.

Now, first of all, your good friend was/is a moron. The capital gains rate has never been over 35%.

http://www.cch.com/wbot2005/019CapitalGainsHistory.asp

The short term rate would have been 70%, at the top:

http://www.taxfoundation.org/files/federalindividualratehistory-20080107.pdf

However, you did touch on something few people actually realize, but drew the wrong conclusion. Taxes that you or I pay is a component of TWO inputs - taxable income AND the tax rate. You are correct in saying tax rates were much higher, but there were also a TON more in write-offs available. What you miss is that this method of tax is MUCH more regressive and affects the poor and working class much worse that the rich. The tax act of 1986 removed MANY of these write-offs, with the trade-off being lower income tax rates. Taxes collected were exxentially unchanged as a percentage of GDP. However, I would have to bet that while most people were paying the same, they should have seen a decrease in their compliance costs, as the code was much less complicated.

If you are interested, there is a great article by a Harvard economist in the December issue of Money magazine essentially discussing just this. Many in Congress want to do away with the deduction for mortgages altogether. His recommendation (which I agree with) is to lower the limit on what is deductible from a $1,000,000 loan to a $250,000. This still allows the working class to benefit, but removes the regressive nature of it.

a construction worker, not a CPA so I may have the exact numbers a little fuzzy but the point is that high short term capital gains rates encouraged you to keep your capital invested, not just take the money and run.

I don't know about your second paragraph as a percentage of GDP. What I do know is that I never again made enough money to be able to stop paying into SSI.

As to your Harvard economist, I have seen enough of the damage to the working class that Harvard economists have done to last me a lifetime. Stanford economists too (see Arthur Laffer)

when I would get a tax return instead of having to pay.

Yes, I remember that. I'm so old.

deductible again. Nice Post....Remember the days...

Limo and driver to take you to work and back= business expense
Meals at the corporate executive cafateria = business expense
Lear jet at your disposal = business expense
Country club membership = business expense
vaca..I mean business trip to Aruba = business expense
The list goes on...

were deductible at one time.

It did for me and my sibs. Our father died when we were little kids.

St. Ronnie's minions put an end to that too.