Posted on 02/14/2011 2:49:47 PM PST by fightinJAG
Earlier today, the White House released a budget proposal that included trimming the mortgage interest deduction for taxpayers in the top income tax brackets.
This is the first step in eliminating what many economists view as an expensive and inefficient housing subsidy.
Unfortunately, many of the critics of the mortgage interest deduction focus on its immediate costs. If it were eliminated, it might bring in more than $2 trillion of new revenue for the government or—as I proposed this morning—allow up to $2 trillion of new tax cuts for the American people.
Actually, I think getting rid of the housing subsidy could be an even better deal than that—providing it is done by expanding the deduction into a general tax cut instead of closing the “loophole” and raising taxes.
(Excerpt) Read more at cnbc.com ...
The "mortgage deduction" is merely the only major surviving deduction of a general class that used to be across the board: deduction of interest paid from your income taxes, since someone else is going to pay interest income tax on that interest paid to them by you.
25 years ago our very own "republican" BobDole pushed through a lovely little bill that wiped out such a deduction for all other interest payments; prior to 1985, the interest paid on any loan - cars, credit cards, whatever - was deductible.
It's called the principle of no double taxation. No difficult to understand: why should the government tax the same money twice?
On the contrary, Mr. Carney. Not only should the mortgage deduction be preserved, but the same deduction for all other interest paid should be reinstated, and BobDole's name be struck from the Republican party rolls for ever.
If not, then how 'bout we cancel those taxes I gotta pay on that "interest income" stated on them 1099's?
Better yet, just kill the Marxist inspired income tax. It was never meant to do anything except collateralize the Fed anyway.
Of course they would.
Next it will be free housing for the nonworking class, to go with free medical. Share the wealth reparations.
Top income level my ass. They’ll have a go at all of us.
They do this and I no longer make any payments on my place. They can shove the thing right square up their asses.
[ Give me a flat tax, where everyone has ‘skin in the game’, and I’ll consider it. ]
Not requiring the same percentage rate of taxes across all citizens allows politicians to play the “class warfare” game in a way that helps them stay and get into power.
I second that whole-heartedly.
Incorrect assumption. The wealthy would move their holdings to corporations and then rent the property back to themselves. This would allow them to deduct the mortgage interest as an expense and then depreciate the realestate. In other words, there would be unintended consequences and the $2 trillion would not materialize.
“Not only should the mortgage deduction be preserved, but the same deduction for all other interest paid should be reinstated, and BobDole’s name be struck from the Republican party rolls for ever.”
HERE HERE!!!
They can take away my mortgage interest deduction when they pass the Fair Tax Act implementing a national sales tax.
Housing, home furnishings and home utilities, are a major section of our economy. This would be like dropping a bomb on yet another major sector of the economy.
The timing couldn't be worse. This would drive even more home buyers from the housing market making the dip even worse.
Unless you grandfather existing mortgages, it's a fundamentally unfair tax. The government provided an incentive to incur debt to buy homes, and to dramatically end that incentive after they have bought a home is just not right. The additional $2000-$4000 tax that will result on average homeowners from removing that incentive may well push even more homeowners into bankruptcy.
By compelling millions of Americans to abandon upside down homes out of protest by depriving them of faith in the economic future of the nation?
Ah, I get it, I have to think like a G*D* socialist, which is to say, not at all.
1. Flat Tax all forms of income at 5%.
2. Enforce the Tax code, especially on those making over 1 million a year who try to evade taxes by sending their money offshore.
3. Make any future loopholes illegal without a freeking constitutional amendment.
At 5% it won’t be worth anyone’s time to try to cheat on their taxes. Plus you could make the penalty for tax fraud being a fine of 10X the amount you cheated taxes. (That way the IRS has reason to hit up the tax cheats at the high end of the bracket and if someone ont he low end mis paid their taxes by a few buck it isn’t going to bankrupt them).
If you are going to tax all forms of income the rate must be low (at the most 5%), if it is too high you end up changing the behavior on investments etc... so that people will try to “legally evade” their taxes by using something not covered in tax code.
If the government cannot live on 5% of the GDP they are too damned big to begin with.
Let’s really screw the Government and just start living in our vehicles......oh wait, then they will raise the vehicle tag tax, CRAP!
If I can't deduct the interest, then I must pay higher tax that then never circulates in the economy. Not to mention that the price of the house was artificially inflated by having the deduction to begin with, so now I'm hosed twice.
Talk about kicking the housing market when its down though... this does however further the Leftist goal of sticking 95% of the population into government tenement projects.
LOL! Yep! They're not even trying to hide it anymore......
[ Unless you grandfather existing mortgages, it’s a fundamentally unfair tax. The government provided an incentive to incur debt to buy homes, and to dramatically end that incentive after they have bought a home is just not right. The additional $2000-$4000 tax that will result on average homeowners from removing that incentive may well push even more homeowners into bankruptcy. ]
When the Government Subsidizes something you end up with more of it, and people wonder why there was a housing bubble.....
[ They can take away my mortgage interest deduction when they pass the Fair Tax Act implementing a national sales tax. ]
Amen to that!
[ Let’s really screw the Government and just start living in our vehicles......oh wait, then they will raise the vehicle tag tax, CRAP! ]
How about this, talk to the government about BUYING LOCK STOCK AND BARREL, some land from the federal government. Kinda like the “Gadsden Purchase” only we call it the “Galt Purchase” for obvious reasons of course.
Renting in general would be a relatively more attractive way to be housed. Most renters wouldn't bother to rent to themselves and would end up sharing the savings with landlords in a competitive market. The housing market would be more rational without the distortion of the tax break.
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.