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To: pigdog
The interest on either a new or used home is not taxed under the FairTax.

I have not seen any exclusions for mortgage interest in the fairtax bill. The chapter FINANCIAL INTERMEDIATION SERVICES does not distinguish.

470 posted on 10/22/2006 2:15:59 PM PDT by Always Right
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To: Always Right; pigdog
You and pd are posting past each other, IMO because of a misunderstanding...

The calculator correctly excludes from tax any EXISTING loan payments - they were established while loan rates/fees were still inflated by income tax costs and hence will not be taxed again. So anyone who has an existing mortgage will pay them without nrst.

New mortgages will have tax added to the excess portion of interest - and will come out about the same (tax costs are removed.... then added as an nrst).

The nominal price of the home will be higher, but it will cost me less in earnings....as has been demonstrated continually.

To buy a 300k house today (excluding interest), I have to earn 400k cuz i'm in a 25% tax bracket. Under the nrst, I'd have to earn 300k*.91=273k (removal of income tax costs), then pay my effective nrst of 15% and go from 273 to 321k; so I'll have to earn 321k.

Under the income tax, the house costs me 400k in earnings. Under the nrst, the house costs me 321k in eanrings.

Why do some continue to pretend that the income tax has no effect on purchasing power?

534 posted on 10/23/2006 2:52:43 AM PDT by Principled
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