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IS THE MORTGAGE DEDUCTION GOOD FOR AMERICA?

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.


TOPICS: Politics
KEYWORDS: miltonfriedman; mortgageinterest; propertytaxes; taxcuts; taxreform; vanity
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To: RainMan

Fortunately, I don’t owe many more years on my home.

Unfortunately for the millennials, they’ll continue living in their parent’s basement apartment for the next 20 years.

I am a loser with the tax proposals. I tithe to my church and donate to other charities. I also have a mortgage and pay state taxes.

Churches and charities could really be hit by this too. I give thousands per year. My tithing + state taxes + mortgage interest deduction + charity donations is well over the proposed personal deduction. I’ve been trying to do things the right way but I am going to pay more for it. That’s just the way it sometimes goes.


41 posted on 12/05/2017 9:15:39 AM PST by boycott
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To: RainMan

So... the banks collect a higher interest rate with the ‘sell’ being you can deduct it on your taxes. Who is benefitting here? Banks. Eliminate the deduction and you will see mortgage rates drop slightly also as the cost of the mortgage increases.
Why should a payment I make to the bank be deductible on my income tax? Why should I expect others to subsidize my house purchases? Either we are consistent in our conservatism or selfish in our interests.


42 posted on 12/05/2017 9:19:46 AM PST by Maryland Man (Responsibility and Integrity are the founding principles missing in DC.)
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To: fwdude

When I was young, I thought it was a good idea for the government to use tax policy to encourage good things....buying a home, getting married, having children.

As I got older I realized how dangerous it was for any government to decide what should be encouraged. I don’t trust anyone in Washington to do the right thing.

I want to vomit when I hear business people talk.....the economy will grow, prosperity will flourish and tax revenues will actually go up.......presumably to give us more government. No thanks. Starve Washington. Gut the Government!


43 posted on 12/05/2017 9:23:45 AM PST by PSUGOP
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To: RainMan

Renters do pay property tax. The landlord includes it in the rent.


44 posted on 12/05/2017 9:29:05 AM PST by wrcase
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To: DIRTYSECRET

It is one of the WORST IDEAS ever - debt should NEVER be subsidized...just don’t talk about killing it or the spear-throwing brigade here will come after you with swords blazing.

What should have been done, decades ago, was a slow phase out, maybe 4% per year. So year one you can deduct 96%, year two 92%, etc. That would give people time to adjust. The other approach would be gradually lowering cap on how much can be deducted. Perhaps beginning with $30k and dropping $3k per year. One other option would be for newly-built homes - homes started after, say 2019 - no deduction at all.

The problem with simply ending it is that property values would crash, and that affects even responsible people (like me), who buy smaller houses than they can afford, and thus are able to quickly pay them off. So eliminating it has to be phased in to not hurt people who paid an inflated price for their home (i.e., bought their home with the assumption that the deduction would always be there), but now have to sell it for what it’s really worth (i.e., no deduction).

We also need to get rid of Fannie Mae and others - who artificially keep mortgage rates low, at risk to the US Treasury (as we learned the hard way 10 years ago)...if people still want to borrow money, they should pay MARKET RATES, not subsidized rates - where they wind up spiking the national debt.


45 posted on 12/05/2017 9:31:23 AM PST by BobL (I shop at Walmart...I just don't tell anyone)
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To: JAKraig; boycott

All good stuff. The fact is that the tax code has always been part of the government’s way of controlling the populace. They can’t help it, this is one of the main things people like to do (have control over others). And it is one of the reasons we support a free society — to keep this kind of control to a minimum.

I agree that business does not pay taxes, they expense them and their customers pay them, unless they cannot control their price sufficiently to allow them to pass costs along.

Home ownership is a good thing, in general the home owner maintains his/her property better than the renter. Same for land owners, they have more incentive to maintain their unimproved land than the government does. So let them and encourage them. But this power should be restricted because we have already seen that people use the deduction to buy more house than they can afford and there is nothing good about this.

If anything is done to these long standing control levers, the government should be restricted to making the changes gradually. Give people with the ability to do something about it the chance to adapt without undue harm to themselves and the economy.

BTW, if the government is charged with assisting the economy then you have to allow this kind of tax meddling from time to time. Better to have the government get out (gradually) and stay out of the business of manipulating the economy.


46 posted on 12/05/2017 9:41:12 AM PST by KC_for_Freedom (Trump has one good idea after the other.)
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To: DIRTYSECRET

End all write offs for nonprofits, foundations, and other left wing tax scams.

If someone want to give money to a charity let them do it WITHOUT HELP FROM THE GOVERNMENT.

‘Nonprofits and foundations’ are most often (dollar wise) left wing tax scams for the very wealthy. End them.


47 posted on 12/05/2017 9:45:17 AM PST by GOPJ (Are the NBC women 'NOT complaining' the ones who 'put out' then MOVED up the ladder?)
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To: Terry Mross

“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.”

I think a lot of people will be discovering the same, should the Senate bill become law. They’ll get angry because they lose their chance to ‘screw the government’ by taking the mortgage deduction, since the standard deduction works better for them.

And I wonder how many of these anti-Republican tax plan types even UNDERSTAND that, even today, you don’t really get to deduct your whole mortgage (in many cases) but, in effect, only the part of the mortgage (plus other deductions) that exceed the Standard Deduction. I think a lot of people think: “I itemize now and can write off $15,000 - if you make me take the Standard Deduction (whatever it is), I lose that $15,000 write-off and thus pay almost $4,000 more in taxes (if in 25% bracket).”


48 posted on 12/05/2017 9:45:20 AM PST by BobL (I shop at Walmart...I just don't tell anyone)
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To: arthurus
There should be only one rate of no more than 10% and it should be from the first dollar of earned income.

I have been arguing this exact concept for many years. It is recommended to tithe 10% to God so our government deserves no more (and sometimes I would argue for even less). Just like what our Founding Fathers did when our country was young, if they need more money than that then they need tariffs.

The new tax form, three lines. 1: Total income. 2: multiply line 1 by .10. 3: Product of line 2. This is your tax.

By the way. All tax withholding MUST be stopped and everyone must send in their taxes by 15 April. When people realize how much they really pay and have to write a check for the full amount, and have to save for it throughout the year, they will keep a steely eye out on all politicians.

49 posted on 12/05/2017 9:45:43 AM PST by OldMissileer (Atlas, Titan, Minuteman, PK. Winners of the Cold War)
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To: DIRTYSECRET

Economic distortions are bad; the dislocations caused by suddenly ending them are VERY bad.

Any change in mortgage deductibility that affects a lot of people must be tapered. Many people buy on cashflow. If they can’t deduct their mortgage, they can afford 25% (or so) less house. A sudden elimination of that deduction would crash real estate markets and anything that depends on them (banks, pension funds that have invested in MBS, construction, lumber, the list goes on). Tapered changes wouldn’t do that.


50 posted on 12/05/2017 9:52:26 AM PST by Pearls Before Swine
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To: BobL

I was always up front and explained they’d have to have a lot of deductions to actually save money. The “trainers” were always pushing that crap of “What if I showed you how to get the government to pay part of your payment?” I’d explain it but I’d also explain the standard deduction. I’m sure the big builders didn’t understand it because accountants did their taxes.


51 posted on 12/05/2017 10:01:59 AM PST by Terry Mross (Liver spots And blood thinners..)
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To: DIRTYSECRET

If it wasn’t there already, I would say leave it out.

However you would cause countless people financial hardship now and property values would decline if you pull it out from under them. Causing a chain reaction and another possible collapse of ALL business activity like in 2008.

I’d say leave it alone. We are Taxed Enough Already


52 posted on 12/05/2017 10:34:22 AM PST by varyouga
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To: DIRTYSECRET

Much like the SALT deductions, the biggest beneficiaries of the MID are people living in Blue states. That appeared to be reason enough for folks on this forum to support repeal of the SALT deduction. Seems like a similar thinking should be applied for MID.


53 posted on 12/05/2017 11:11:13 AM PST by oincobx
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To: Terry Mross

Yea, it’s what happens when you have a complicated tax code - not only is it difficult for many (if not most) people to understand, even the basics - it is easy to deceive people.

Being a fellow FReeper, it doesn’t surprise me that you take the time to make sure people know what they get, and, more importantly, what they don’t get. People on this site have class and integrity!

(except for the guy demanding that toll booths be put up on all freeways...not sure what his angle is)


54 posted on 12/05/2017 11:13:47 AM PST by BobL (I shop at Walmart...I just don't tell anyone)
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The GOP is set to eliminate one of the biggest benefits of owning a home
Yahoo Finance via Business Insider | 12/05/2017 | Akin Oyedele
Posted on 12/05/2017 7:47:01 AM PST by SeekAndFind
http://www.freerepublic.com/focus/news/3610776/posts


55 posted on 12/05/2017 11:23:47 AM PST by SunkenCiv (www.tapatalk.com/groups/godsgravesglyphs/, forum.darwincentral.org, www.gopbriefingroom.com)
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To: wrcase

Yes, and I pay corporate taxes, they are baked into everything I buy. So what. Renters do not see their property taxes, they do not get notified of property tax increases, and they don’t have to cut a check directly. A LOT of renters treat property taxes as taxes on “the rich” that they don’t have to pay (since they don’t see a cause/effect relationship) and therefore vote for things that if they actually knew how much it would cost them, they would say no to.


56 posted on 12/05/2017 11:31:07 AM PST by RainMan (rainman)
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To: Maryland Man
If you think bank rates are decided by the MI deduction, you don't know much about interest rates. I could go into a long dissertation to explain it to you ... but there are plenty of resources online to educate you, and it is not worth my time. The short version however is MI deduction has zero more impact on bank rates than any other tax or deduction. What impacts bank rates is the health of the economy, and the Fed Funds rate.

This notion that you are "subsidizing" someone else is a bit troubling. A hallmark of conservatism is that my money is my money. What you are saying is that the government has a right to more of my money, and that is anything BUT conservative. Unless and until we do away with an income tax, deductions are the one thing that help you keep more of your money. So, as long as there is an income tax, I am firmly in favor of a mortgage interest deduction.

So here is a quandary for those of you who favor elimination of the MI deduction. Do you ALSO favor elimination of the Property Tax deduction? If so, why or why not?
57 posted on 12/05/2017 11:40:36 AM PST by RainMan (rainman)
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To: DIRTYSECRET

bump


58 posted on 12/05/2017 11:48:24 AM PST by Albion Wilde (I was not elected to continue a failed system. I was elected to change it. --Donald J. Trump)
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To: fwdude

The current Senate bill reduces the threshold for the medical deduction to kick in from 10% down to 7.5%. Not 2% as you mention, but definitely better than 10% for those who itemize.


59 posted on 12/05/2017 11:55:20 AM PST by House Atreides (BOYCOTT the NFL, its products and players 100% - PERMANENTLY)
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To: rigelkentaurus
We should have a national sales tax and no income tax at all. If we can’t do that, the next best thing is one tax rate and no deductions for anything.

No, what we should do is get the FedGov out of the tax business.

1) Congress passes a budget, Pres signs it.

2) Budget is divided by 535, with each Congresscritter taking home his 1/535th of the budget.

Each state is responsible for its share of the budget, based on its Senators/Reps.

16/17th both can be repealed - no more income tax, and the states need to be represented in this.

Any mid-year spending bills that pass are split up the same way.
60 posted on 12/05/2017 12:08:37 PM PST by Svartalfiar
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