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Proposals could cut mortgage deductions
San Jose Mercury News ^ | 8/29/09 | Kenneth Harney

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 ...


TOPICS: Business/Economy; Government; News/Current Events
KEYWORDS: bho44; bhocbo; bhotaxincrease; cap; deduction; mortgage
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Incoming!! More income redistribution. Returning wealth to its rightful owners.
1 posted on 08/30/2009 8:45:35 AM PDT by ProtectOurFreedom
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To: ProtectOurFreedom

It really sucks to live om a communist nation.


2 posted on 08/30/2009 8:50:36 AM PDT by BuffaloJack (Obama's New New Deal = The Raw Deal)
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To: ProtectOurFreedom
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

That is not $1.1 million of interest, but interest on a $1.1 million loan or loans. Not well worded.

3 posted on 08/30/2009 8:52:39 AM PDT by Always Right (Oxymoron: It must be true, I saw it on the News..)
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To: ProtectOurFreedom

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.


4 posted on 08/30/2009 8:52:58 AM PDT by brownsfan (The public schools and the SRM, they are killing us.)
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To: ProtectOurFreedom

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.


5 posted on 08/30/2009 8:53:53 AM PDT by Hodar (Who needs laws .... when this "feels" so right?)
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To: ProtectOurFreedom
Who'd pay more? People with big mortgages and higher-than-average incomes, who are far more likely to itemize under current rules.

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)...

6 posted on 08/30/2009 8:53:55 AM PDT by John123 (My Definition of Liberals - Folks who validates their existence by calling someone a racist.)
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To: ProtectOurFreedom
I am compelled a little more each day to stop making mortgage payments entirely, and rent for the rest of my days.

Take away my mortgage deduction, and that leaves me to pay the property taxes - which will also probably go up - were is the incentive to even own a house anymore?
7 posted on 08/30/2009 8:54:26 AM PDT by FrankR (We are only enslaved to the extent of charity we receive....INCUMBENTS OUT!!!)
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To: ProtectOurFreedom
In San Fransisco, a home such as this could have it's interest deduction cut.


8 posted on 08/30/2009 8:56:20 AM PDT by Always Right (Oxymoron: It must be true, I saw it on the News..)
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To: ProtectOurFreedom

Is more better if everyone rent from state.


9 posted on 08/30/2009 8:56:35 AM PDT by reg45 (Be calm everyone. The idiot children are in charge!)
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To: ProtectOurFreedom
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.

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

10 posted on 08/30/2009 8:57:34 AM PDT by EGPWS (Trust in God, question everyone else)
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To: FrankR
were is the incentive to even own a house anymore?

That's their objective. No private property for thee....

11 posted on 08/30/2009 8:58:49 AM PDT by LaineyDee (Don't mess with Texas wimmen!)
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To: FrankR

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.


12 posted on 08/30/2009 8:59:16 AM PDT by ASOC (Cave quid dicis, quando, et cui)
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To: ProtectOurFreedom

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.


13 posted on 08/30/2009 8:59:19 AM PDT by behzinlea
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To: FrankR

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.


14 posted on 08/30/2009 8:59:37 AM PDT by whitedog57
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To: ProtectOurFreedom
Let them pull this train. Even liberals love the mortgage interest deduction. If they see the guy up the street with a big house getting nailed, they'll see it coming their way.

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.

15 posted on 08/30/2009 9:01:59 AM PDT by Regulator (Welcome to Zimbabwe! Now hand over your property)
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To: ProtectOurFreedom
Stupid Damned Democrats ~ No, that change would NOT "Over a 10-year period........ boost federal tax collections by an estimated $41 billion."

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.

16 posted on 08/30/2009 9:02:23 AM PDT by muawiyah
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To: ProtectOurFreedom

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/


17 posted on 08/30/2009 9:03:20 AM PDT by misterrob (A society that burdens future generations with debt can not be considered moral or just)
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To: FrankR
Take away my mortgage deduction, and that leaves me to pay the property taxes - which will also probably go up - were is the incentive to even own a house anymore?

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.

18 posted on 08/30/2009 9:05:18 AM PDT by EGPWS (Trust in God, question everyone else)
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To: ProtectOurFreedom

That proposal should really help home sales.

Every time the government messes with real estate taxes we have a decline in values.


19 posted on 08/30/2009 9:05:18 AM PDT by ladyjane
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To: ProtectOurFreedom
The tax deduction on a home was and is nothing more than social engineering. It should be capped and only allowed once in a life time, and not used as gambit for trading up in homes. Where it become nothing more than welfare for the rich.
20 posted on 08/30/2009 9:06:52 AM PDT by org.whodat (Vote: Chuck De Vore in 2012.)
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