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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Flood insurance should be priced on an actuarial basis across the country. Let them build wherever they want as long as they are carrying the costs for building there. Problem solved. [/quote]

What about tax deductions on top of the flood insurance?   That gives federal money that otherwise would go to the treasury.  Example-at a 35% rate you save .35 on every dollar of deduction.

[/quote]

Do you really think the people would stand for paying nominal tax rates?  That isn't "money that would otherwise go to the treasures". The more likely outcome is that nominal rates would be reduced to roughly mirror current effective rates, that people would reduce their economic output (see the UK's recent experience), leave the country (see France's recent experience) or some combination of the above.

And no; you don't save ".35 on every dollar". You save .35 cents on every marginal dollar that would otherwise be subject to that .35 cent rate (ie, the amount of the deduction).

If you're asking about tax deductions for building in those zones, there is no reason not to give tax deductions to those builders/property owners that everybody else gets. [/quote]

I understand the .35 on marginal dollars.   That is money that otherwise would go to the treasury.  Where else would it go assuming all other things constant?   Any substantive changes after Ike, Katrina, Sandy? Do a sample and see your money subsidizing.  My question is should flood insurance premiums more accurately reflect risk?   Do an example for yourself.  Should we all be paying for others beach/bay living AND/OR jurisdictions that ignore common sense zoning and urban planning?
http://www.npr.org/2016/08/26/491531827/after-hurricane-sandy-many-chose-to-move-rather-than-rebuild
On a far smaller scale Fairfax County is spending millions on levees for a persistently flooding area.   Fox Beach on Staten island is a sensible solution.[/quote]

All other things wouldn't remain constant. It is a widely accepted fact that people/organizations make economic decisions based on expected after-tax outcomes. There is simply no good reason to think that changes to the tax code won't alter human behavior and thus any argument that assumes all other things remain constant is an unserious argument.

I already said that flood insurance premiums should be based on actuarial analysis of risks with no subsidies.

If you're getting at removing general incentives through the tax code fhat end up benefiting those who build in risk-prone areas, you might as well remove those general incentives completely. First, I know of no area in that country that doesn't face natural disasters. Second, other areas of the country face this issue on a much grander scale. [/quote]

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