Posted on 08/30/2009 8:45:34 AM PDT by ProtectOurFreedom
...arlier this month the nonpartisan Congressional Budget Office delivered its latest revenue-raising options for Senate and House consideration as they write this fall's tax and budget legislation.
Tucked away in the report are several incendiary plans that could — if adopted — cost homeowners billions of dollars. Though not formal legislative proposals, the CBO's options represent a handy fiscal menu for legislators to pick and choose from to reduce the deficit — now at unprecedented levels — or to pay for new programs they might want to advance.
Tops on the CBO's hit list for housing: Slash deductions for homeowner mortgage interest from the present $1.1 million limit to $500,000, phased in with $100,000 annual reductions starting in 2013 and extending to 2019.
Under current law, taxpayers can write off mortgage interest on their principal home debt up to $1 million, and on home equity debt up to $100,000.
Under the CBO's option, that maximum mortgage debt amount would shrink yearly until it hit $500,000.
Over a 10-year period, this change alone would boost federal tax collections by an estimated $41 billion.
The CBO offered up a second option if Congress wants to raise a lot more money: Replace the current mortgage interest deduction with a flat 15 percent tax credit for everybody with mortgage amounts below the declining limits in the first option. Rather than taking write-offs that are tied to your personal income tax bracket, every homeowner would get a credit worth 15 percent of mortgage interest paid.
Who'd benefit? Primarily lower- and moderate-income taxpayers who don't itemize on their returns. Who'd pay more? People with big mortgages and higher-than-average incomes, who are far more likely to itemize under current rules.
(Excerpt) Read more at mercurynews.com ...
It really sucks to live om a communist nation.
That is not $1.1 million of interest, but interest on a $1.1 million loan or loans. Not well worded.
This is great! Do it! All those stupid Democrat lemmings who voted for the communists thinking that taxes would go up on “the rich”. Ha!
Wait until Mr. and Mrs. John Q. Public file and find that their $1500 refund turns into a $200 payment! I won’t like paying, but it will be worth it to hear the morons scream and cry.
Meanwhile, Obama’s peeps will get “their share” of John Q. Public’s money.
The best way to get people’s attention is take their money. And Democrats in charge assure that will happen. I just hope we survive it.
Great, just great ... so those of us who chose to buy a home are not only penalized by declining home sales, plummetting property values, now they want to take the only deduction I have left.
The wealthy folks will buy their primary homes in South America and live there year around... this proposal is an epic fail in the making because the US government cannot tax foreign homes (until they are sold of course)...
Is more better if everyone rent from state.
Stop being so greedy and working so hard to produce and buy all you can afford... a cheaper house.
It's whats best for Amerika.
Thank you government for thinking for us who can't think for ourselves.
That's why YOU are in charge. /s
That's their objective. No private property for thee....
Good point, why own a home?
I am “lucky” we busted butt for years and got ours paid off in 14 years. So, yes, I am a “homeowner”.
But still have to pay the muni about 1/2 of my house payment in taxes (PITI, the P part was $630/month, taxes, $350)
SO, ya, I’m a renter as well.
This is to be expected. A socialist government requires fresh blood, and more and more of it as time goes on. The is one more device for taking money from one group of citizens (the successful and prudent) and giving it to constituents who form the core support for the ruling elite.
My wife and I did just that.
And they think housing prices are going to stabilize? The banks must be going nuts over this proposal.
In fact, the NAR, NAHB and ABA will probably lobby and kill the bill. They have always lobbied to keep it and won.
Will make the health care townhalls look civilized. Will also drive home prices down by another 20%.
For all you young folks out there who think this is a "privilege" granted by a magnanimous Congress, it's not. All interest paid used to be deductible, including consumer credit - until a "Republican" named Bob Dole canned that deduction in 1986 (they called him "Reagan's Tax Collector" for that one).
The reason is simple. Interest income is taxed. It's double taxation to tax both the interest payer and payee.
Funny that this used to be a well known principle. Guess the government schools don't talk about that anymore.
It most certainly would increase the number of foreclosures, create an urban proletariat wandering the streets, and bring some serious civil strive to this country that would probably result in the deaths of the mebers of Congress who proposed this idea.
The maxim is you can't get blood out of a turnip.
This deduction should never have been allowed in the first place since all it did was serve to create artificial demand and inflation in housing. However, once you implement it you cannot take it away without destroying people’s asset values even further/
Of course you will be paying the taxes of the landlord via higher rent if you choose to rent.
One way or another taxes are going to go up for everybody to help pay of these idiotic "clunker" programs that are killing our republic financially.
You just won't own any property.
That proposal should really help home sales.
Every time the government messes with real estate taxes we have a decline in values.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.