Posted on 04/18/2012 7:15:00 AM PDT by Cincinatus' Wife
Me Too!! What you said.
To go with that he is also going to get rid of the state tax and property tax deduction.
THAT would screw many in the middle class.””’
One of the local channels said that since high income earners buy more expensive homes and have a higher amount of interest to deduct, that scenario just isn’t FAIR!
I was stunned.
When you compare the interest $$$ paid on a home loan—whether middle class or ‘rich’, it is about the same PERCENTAGE of their gross income.
When you are more wealthy, you can afford a higher cost home. You often also get a lower rate of interest because you are a better risk to the mortgage holder.
BUT the PERCENTAGE application is about the same.
The bigger problem facing the middle class is that they tend to OVERBUY because they think they deserve it, and then when there is any kind of bump in their road’s economy, they cannot pay the mortgage.
They also tend to have to pay a HIGHER rate of interest because they are a poorer risk to the mortgage holder.
Rental property would technically be classified as a 2nd home.”””
NOT necessarily-— there is also commercial property labels for apartments, duplexes, etc, that a person can own.
A 2nd home is a 2nd home. Many people have such & NEVER rent it out for any amount of time, any amount of money or to anyone.
Taking away such deductions will also un=qualify most people from getting a mortgage in the first place.
That sounds backward. Can you clarify?
Let’s Bump Plans: A Comparison of Gingrich and Romney’s Tax Plans
http://www.newt.org/2011/10/30/lets-bump-plans-a-comparison-of-gingrich-and-romneys-tax-plans/
I am afraid my clarification will result in more obfuscation.
I think that deductions of state income tax and property taxes should be sacrosanct, and untouchable. What you are deducting, when you itemize, is amounts of money from the income that deserves to be taxed. Pretend that I pay the state of Maryland $9000 in income tax (I wish!), well, if I cannot take away that amount from my federal return, and I am paying the 30% rate ( for simplicity’s sake, tho it isn’t far off), well then, I am paying an additional $3000 on money that was never mine to begin with since the People’s Republic of Mayland had it earmarked as theirs all along.
Where I have confused the issue in my replies is that when people speak of “deductions”, it has sort of come to mean somewhat discretionary things, like mortgage interest, and even medical expenses.
I do not classify tax payments (mentally, to myself) in that same vein. Did I do any better, or just muddy my water further?
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