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Re: Why pay tax? When , none of the money goes to legal aid?

Posted by Nick (see My My My, below) on February 03, 1999 at 15:34:59:

In Reply to: Why pay tax? When , none of the money goes to legal aid? posted by satori on January 29, 1999 at 22:11:08:

: Why should anyone pay tax, when the government does not pay for programs
: to help the "social condition"? like (legal aid) It seems to me that they get
: at least 50% percent of the estate of everyone that dies in this country
: by will or other means one way or another. And they provide nothing as far as social
: services, as far as providing legal aid that is needed by tenants that
: are bothered by landlords.I find the whole thing a sham. A landlord charges
: most of the money a person would have for rent, then when he questions
: it he has to have millons of dollars to sue the city the state, and the
: landlord what a sham.

First, only the top one-half of the top one percent of all estates are subject to the federal estate tax. The bottom 99.5% are not, courtesy of the unified credit ($650,000 now, I believe). But you do get some substantial benefits from the tax system: public transportation, medical research, etc. Second, your quite apt observation about how our legal system tilts to favor entrenched wealth applies to far more than landlord/tenant disputes. Just ask any public defender who's tried to defend someone facing the death penalty. Well-off interests have always used the legal system to further their aims over the less well-off. Perversely, the tax system actually subsidizes landlord litigation against tenants. Landlords generally can deduct these legal fees as ordinary and necessary business expenses under Internal Revenue Code section 162. Residential tenants cannot. For them, legal fees are non-deductible capital expenditures. And if you're defending a lease, you'll never get any tax benefit from them (unlike a house, where at least the owner can increase his basis in the house and recover these costs when he sells the house). Poor people get trodden upon by the legal system every day (just talk to any public defender who's defended someone facing the death penalty). Perhaps a narrow solution would be to equalize the tax treatment of legal fees: make them entirely non-deductible. While not eliminating landlord abuse of the legal system, it would make it more expensive for them to litigate (by their marginal tax rate).

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