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...Renters rent property based on what the market will bear, not what their deductions were....

I think the problem here is that you have never taken a course in economics.

If the mortgage interest deduction is eliminated, there will be more renters chasing the same stock of rental housing. rents will naturally rise.

Now I have not read the tax proposal, but under current law, and under Generally Accepted Accounting Principles, mortgage interest on a rental is is a business expense. There is not even a whisper that the tax proposal will change GAAP.

The business expense is deducted from gross business income as part of a taxable income calculation. You can not eliminate the "home mortgage interest deduction" for a rental property because there never was one to start with.

So eliminating the home mortgage interest deduction will penalize both homeowners and renters, and will be a windfall for landlords. Homeowners in the form of higher taxes, and renters in the form of higher rents. Now I happen to be a landlord, and will profit from any such elimination. I am opposed to it on policy grounds. We want to encourage home ownership to give as many people as possible a stake in the prosperity of the USA.

...Renters rent property based on what the market will bear, not what their deductions were....

I think the problem here is that you have never taken a course in economics.

Well, lets see.

If the mortgage interest deduction is eliminated, there will be more renters chasing the same stock of rental housing. rents will naturally rise.

Many people are at the breaking point right now. They don't have much in savings and are often just six weeks or less from being upside down. Over the last twenty plus years, wages haven't increased as inflation has kept marching along.

You forsee more renters chasing the same stock. I think you're missing something, the saturation point. Who is going to be willing to pay $36 to $48 thousands dollars a year for a rental? Guess what. There would be trouble on your horizon.

What I foresee instead of more people looking for rental stock, is more homeowners looking to rent rooms to keep themselves afloat. I foresee new programs to help folks get into homes. I foresee people forming two and three family co-ops, to purchase homes.

I believe you alluded to the idea that people who had been paying a mortgage, would drop out and be looking for rentals. Look, that could happen, but if it did, guess what would happen to the real estate market. Home values would plumet as vacancy rates grew in regions across our nation.

What would happen to rental properties as people dropped out of their current rental situations? What you could be looking at here, is a massive vacancy rate, and dropping values there as well. I can easily see many appartment building owners going under as the rental costs would be so high, that they couldn't service their loans on the buildings, with even a few vacancies. In that case, rental property prices would plumet as well.

Now I have not read the tax proposal, but under current law, and under Generally Accepted Accounting Principles, mortgage interest on a rental is is a business expense. There is not even a whisper that the tax proposal will change GAAP.

Okay, good to know. I haven't owned a building and had experience with this type of filing. What I do know is that in 2016, the home mortgate deductions totalled $71 billion dollars. From what you are telling me here, that's only part of the story. Your and other building owners deductions would be in additon to that. Since these are large buildings, I wouldn't be at all surprised if that $71 billion figure were to double, perhaps triple, or even more. That's a pretty big amount of loose change. ":^).

The business expense is deducted from gross business income as part of a taxable income calculation. You can not eliminate the "home mortgage interest deduction" for a rental property because there never was one to start with.

Well, isn't that more or less a case of semantics? While you are technically right, there is still a deduction quotient that is similar to the home mortgage interest deduction.

So eliminating the home mortgage interest deduction will penalize both homeowners and renters, and will be a windfall for landlords.

I remain unconvinced that this will be a windfall for landlords. As stated before, the new rental rates would not only hit the saturation factor, but I believe it would also hit a physcological barrier that people would not be able to justify going beyond. If you're working toward a deed to a home free and clear, these types of housing payments were justified. When it's simply to stay in a home and help someone else buy that income property, I see folks becoming very creative to avoid participating in that.

Homeowners in the form of higher taxes, and renters in the form of higher rents. Now I happen to be a landlord, and will profit from any such elimination. I am opposed to it on policy grounds. We want to encourage home ownership to give as many people as possible a stake in the prosperity of the USA.

I agree with your conclusion here, but I want to raise some more issues with you.

The most important is the idea that if around $200 billions dollars a year (perhaps more) is being deducted from stated income, someone is having to come up with a hell of a lot of money to beef up the taxes that were avoided.

Look I again point out, I am not against the deductions that homeowners and landlords take today. I merely raised the issue to compare to another loosely termed subsidy. Some folks jumped in thinking I was not in favor of the deductions. I actually am. I realize they help move people into homes and landlord positions. That helps the economy. As you stated, it gets more people into owning a slice of the pie. That is good.

You have made a decent point that landlords and tenents save, but I do have to say, not quite so fast there.

Granted, there are not dollar for dollar tax reductions based on deductions. None the less we are talking about tens of billions of dollars that someone has to help offset. Renters do that. They pay a significant portion of these taxes.

Who are these renters. I submit they are the loosely referenced lower to mid middle-income group. We're talking about folks making around $32 to $70 thousand dollars a year. Those above this level can save a little and get into a home over time. Then they become the utilizers of these deductions, and are no longer in the tax group that is left with footing the bill. Those in the midst of this group generally can't.

This is a very heavy burden on this group, paying tens of billions that were not paid due to homeowners and landlord deductions.

So while this group will save on rent, they simply don't have the deductions to itemize, and are stuck paying taxes. The $6k deduction went a ways to helping. I think the $12k deduction will go further in that direction.

At any rate thanks for the response.