To: ThinkDifferent
The one downside is that eliminating the income tax will immediately devalue all residential real estate by about 20 percent. That's fine if your loan to value ratio is below 80 percent, but lots of people would end up with mortgages for more than their houses are worth. Of course, we have survived a bigger adjustment to investment portfolios in the last year, so we would survive an adjustment in real estate too. But the real estate lobby will scream bloody murder.
To: Dems_R_Losers
The one downside is that eliminating the income tax will immediately devalue all residential real estate by about 20 percent. I don't believe that for a second.....houses will still be worth todays market value PLUS sales tax, due to the fact that they will be purchased with NON TAXED dollars which will, be more than able to absorb the sales tax.
Under my vision the sales tax would be added to each monthly mortgage payment (divided out over the life of the loan)
259 posted on
11/06/2002 3:00:09 PM PST by
is_is
To: Dems_R_Losers
The one downside is that eliminating the income tax will immediately devalue all residential real estate by about 20 percent. No it won't. The value of an income tax deduction for home interest is that you end up paying home mortgage interest out of untaxed dollars. That's not going away. The dollars spent on home mortgage interest will be untaxed dollars.
It will be far easier to save for a home (more disposeable income to save that will grow faster). It will be far easier to qualify for a mortgage (lower interest rates by 25% and a lot of folks qualify).
But the real estate lobby will scream bloody murder.
Actually the real estate industry LOVES this idea. They'll sell many more homes.
To: Dems_R_Losers
Home prices would be very stable, there is no reason to believe they would go down.
The purpose of the home mortgage deduction is to allow you to pay your mortgage interest with pre-tax dollars. With an NRST, you would pay EVERYTHING in pre-tax dollars. What would happen to Real Estate if interest rates dropped 25 - 30% because interest income was no longer taxable? It would be more valuable, not less!
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