[ncalburt]

what fairness .

because someone can’t afford a home so nobody can have one ?

ridiculous .

tax credits keep real estate flowing and improving neighborhoods.

no money flowing is stagnation .

[Behind the Blue Wall]

No the “fairness” has to do with the fact that places like San Francisco get a much bigger piece of the total pie relative to their size than places like Tulsa, because media house in SF is over $1 million, median house in Tulsa barely over $100K.

[zek157]

Nobody is talking about eliminating interest deductions without reducing tax rates. I would prefer having a much lower overall tax rate in the neighborhood of 15-20% without a single deduction. It would make a much healthier environment that I would consider investing in again.

Revitalizing neighborhoods has little to do about deductions and everything about recognizing value. I never bought a house by carefully considering the tax deduction and determining the quarter on the dollar spent that I was going to get back was going to make or break the deal.

Dollar for dollar tax credits would have been a different story, but we are not talking tax credits.

[sphinx]

The supposed benefit to homebuyers of the home mortgage interest deduction is largely illusory. The subsidy encourages people to bid up prices; you get a tax break, but you are paying more for the property than you would otherwise. The people who reap most of the benefit are the middlemen who are operating on a percentage basis: the realtors, who always favor higher prices, and lenders, who want big mortgages.

The problem with eliminating the home mortgage interest deduction, as is so often the case, is the transition from a highly distorted market back to an economic market. I don't pretend to know the best way to phase in such a change. What we would want to avoid is a sudden upsetting of the applecart, where people's long-established expectations have suddenly vanished.