Posted on 12/05/2017 8:10:58 AM PST by DIRTYSECRET
My friends it's government interference in the market. Why should some millionaire owner get a tax break when he can just buy something cheaper? If the idea is to make housing affordable ONE house is plenty of help. No need for help on a second home. Government grants for college make tuition rates go up. Won't the deduction do the same for housing? The Milton Friedmans out there will say it's bad for housing. I agree.
WE start the discussion. The Yahoo article posted earlier was written by yahoos.
Does this mean the same can be said for ethanol subsidies and-heaven forbid-the minimum wage?
Republicans are only limiting the mortgage deductions past a certain value. They’re not saying if you have two homes in Arkansas you should pay more than if you have one home in Massachusetts.
No, it isn’t.
Is it fair for the government to change the rules if someone recently signed a 30 year note? The deductions may have been part of their decision to buy. What if they can no longer afford the home because of the government changing the rules mid-stream? Should they lose it? Should those with existing mortgages be grandfathered in?
Call that government engineering, but it mirrors solid economics.
I agree. The mortgage deduction helps us in the middle class, by allowing us to keep some of our income so we can either save, spend, or contribute.
Owning property is part of being invested in America.
Taking this away will hurt the middle class.
We don’t need the federal government encouraging us to do anything, but, there is a sure effect. The effect certainly isn’t always good or bad.
When a wealthy person purchases a house it is usually more house, that is more expensive than a not so wealthy person can afford. Because of the tax deduction the not so wealthy man subsidizes the the purchase of the wealthy mans home that the less wealthy man cannot afford.
It is wonderful that the wealthy man can afford to buy an expensive house, that home builders can make money from him, that local governments can make money on his now increased property tax, but perhaps without the subsidy he would buy less house and all taxes would be lower and now the less wealthy could afford a little more home and still keep the home builders busy.
From the politicians standpoint the subsidy is great because the banks can make a lot more money which is in part donated to the politicians to keep the subsidy going.
When I was young, many decades ago, Sirloin Steak was not for poor people but average middle class people could afford it, at least on occasion. We had it a lot when I was a kid in the 1950’s. Enter Food Stamps. The price of Sirloin shot up because people who could not previously afford it could and the people who paid for it, the middle class tax payer could no longer afford it.
At the turn of the last century, that is going from the 1800’s to the 1900’s there was no income tax. The economy flourished but people who made a lot of money had nothing to do with it other than invest it to make more money. Soon we had several very rich families that controlled most of America.
There is a place for government. The government should promote the welfare of it’s people. Sometimes that means limiting the power of the few to rule over the many. Sometimes it does mean something other than having a free for all.
I don’t like the idea of having a tax deduction for interest nor do I like having a deduction for Property Tax. I have used both to great advantage and will until it is discontinued but, I do believe it should be discontinued.
I do believe that government should promote the welfare of the society but that it should not pick winners and losers. It should do all it can to make all of us winners.
Paying 35% corporate tax is so stupid. Business don’t pay any tax, the customers of a business pay the tax and then the business can’t compete in world markets because they start off at a one third disadvantage.
I don’t know the answer to the proposition of a graduated income tax but I do know that everyone should participate in the economic good of the country by paying taxes. A national sales tax would have to be pretty high, likely about 21% to keep up with what we already spend. It would hit the poor very hard because they don’t pay taxes, they actually get an “earned income credit” that they would lose under a flat or sales tax.
It is actually pretty complicated except business should not pay tax because only consumers really pay it.
No one thing is equally good for everybody.
(Well, maybe clean air and clean water, except that would destroy the air and water purifier industries. See, I told you).
I tend to agree with you. If the mortgage deduction provides incentive and affordability for, say, young married couples, to buy their first home and become invested in their neighborhoods and communities, then it is probably a good thing to continue. But I think it should be limited to primary residence, and capped at some dollar amount. JMHO
As one who has paid cash for his last two houses, I think the mortgage interest deduction is terrible for housing. Like artificially low interest rates, it encourage the incurrence of debt and penalizes savers. It also distorts housing prices by creating artificial an incentive to spend more on a house, thus driving up prices.
There will inevitably be a painful adjustment period, and people stuck in overpriced homes will suffer the loss of artificial equity, but ultimately eliminating this deduction will lead to a much more market based housing system and more affordable home prices.
The purpose of the mortgage interest deduction is to incent people to become homeowners. The percentage of the population under 30 that owns a house it at all time lows, specifically because housing costs, even with the carrot of a mortgage interest deduction, is at all time highs. In the Seattle Metro area, a starter house is going for around $500K, with a mortgage of over $3K/mo. That’s $40K/year in after tax income. Wages have been depressed for years, and a couple making $100K/year cant even qualify for a starter home. (using traditional ratios, 25% of pretax income means they would need to make a total of $160K/year to get a starter house). The issue is that you can rent for about $1500/mo, so why pay a $3K mortgage? Renters don’t pay property taxes, so they are very enthusiastic about voting for anything that increases property taxes. You want to make someone a conservative ... make them pay for the effect of their votes. The elimination of the MI deduction would eliminate Conservatism in a few years.
MOST people won't be affected by it.
They'll actually do better by claiming the standard deduction. So they'll actually have more money in pocket.
As far as the housing market goes, it might have a SLIGHT down turn.
Now, instead of viewing the house as a tax write off, they'll see it strictly as property. No artificial influence to buy.
The people who do better claiming the standard deduction will actually be able to afford the same house or maybe more.
The only people truly affected, are those with numerous itemizations, including their house, that put them over the standard deduction limit. That's a very small percentage (comparatively).
You are inconsistent.
Why favor one tax break (mortgage interest) but oppose another (federal aid to colleges)?
If they lose the deduction when they move, they won’t move and home sales will crash.
I retired from new home sales. Part of the sales pitch was to explain the tax deduction to first time home buyers. But, if you don’t have enough deductions overall you can’t take the deduction anyway. I found that out after I bought my first home.
It’s also welfare payments to the banks thru government policy. I remember when all loan and credit card interest was deductible. Nutz.
I remember when all loan and credit card interest was deductible. Nutz.
All deductions, exemptions, and credits are bad and wrong. And the rates are too high and too many. There should be only one rate of no more than 10% and it should be from the first dollar of earned income.
I think taking away BOTH the mortgage interest/tax and medical deduction would be a killer for a lot of people. This is the first year that my medical deduction, even with the higher Obamacare-mandated limit, is going to kick in for me (it was the health year from hell.) Taking even one of them away would probably lower my Schedule A deductions to below the standard, giving me no benefit.
I think the medical deduction floor limit needs to be much lower than even before O-care. It should be something like 2% of AGI. The inter-generational parasites on society aren’t going to benefit from such a lower limit because they don’t pay for healthcare anyway, and don’t have enough to itemize. Just another way to put more money in the hands of conservatives.
People buy overpriced homes that they can’t ultimately afford because lenders are either incentivized or threatened into taking these risks. Take away this safety net and lenders are going to do what they are best at- assessing risk which they can afford against the demand for loans.
I think without the government meddling, nearly everyone would be required to pay 20% down on a home, making most loans solvent in case of an emergency and mitigating another meltdown. I worked hard to save up my 20% down payment and eschewed any government-backed mortgage as far as it was in my power. I’m sitting good now.
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