This is the opening barage to remove the interest deduction for home mortages...bet on it.
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if so...how is this going to effect home buying strategy? To avoid paying interest people will save a bigger down payment, make bigger monthly payments, and choose shorter duration loans? I think that would be good for the economy given the mess we are currently in.
If there is a tax break to offset the removal of interest deductions I will be all for it. But I doubt it will work that way.
If put into effect quickly, it will wreck the housing industry farther. Yes it is a gift to those who seek to buy a home as the tax system is subsidizing a portion of the interest payment. So what? My income is not the government’s money to give back to me...it is mine to turn over a portion for the proper administration of the Republic. Tax preferences are part of the equation. FWIW, earners used to be able to deduct taxes paid on tobacco and interest on consumer loans, they were removed so rates could be adjusted downward. Think that will happen now, think again.
Don’t confuse the US debt situation with consumer debt...whether someone gets a mortgage interest deduction or does not (like me), has no affect on the debt or deficit not considering the higher taxes they may pay.
In my best world, there would be a flat tax paid from dollar one including a tax on benefits but that is never going to happen either.
“To avoid paying interest people will save a bigger down payment, make bigger monthly payments, and choose shorter duration loans?”
With what?
Money doesnt grow on trees....
Nearly every major financial decision I have ever made was based on mortgage interest being deducted. It would be so severe in my case I would probably go from being a multimillionaire (on paper) to being bankrupt.