Presidential Commission to review mortgage tax deduction

[Jamie79SC]

Get out the KY jelly.

LA Times story

The Administration that brought you reduced taxes for the richest Americans and has pushed through legislation giving oil companies cash to build refineries, appears to be ready to substantially increase taxes for the middle class. They are sniffing around changing the mortgage tax deduction and capitol gains taxes for residences.

Not only will your taxes go up, your home value will go down. If you are a billionaire, the republicans are your pals. If not, go pound sand.

[Jamie79SC]

Mikester,

After you cut taxes for the wealthiest contributors (er... I mean citizens),and then spend oodles of cash for your Crusade, (er... I mean war in Iraq), you eventually have to get the money somewhere, why not common Joes like you and me. After all, what are we going to do about it?

[BlueSkyJaunte]

Well, that's ONE way to kill the RE bubble.

[EdT82SC]

This administration is not the first to talk about it. There are a numer of economists over the years who say we should do it. IMO it won't happen. It would be political scuicide. It hits too many voters in the pocket book. This administration is already hurting in the polls. They aren't going to make such an unpopular move. Heck. They couldn't have passed in two years ago when everyone was euphoric from the early war success and catching Sadam.

[legion]

It's just a study. Nothing will ever come of it, no matter what the conclusion is. I agree that it makes sense, but it would be painful for me (and many other people) in the short-run.

Both parties would oppose the President on this.

But considering the looming funding crisis for all of the entitlements our government hands out, all options must be studied.

[1967 R50/2]

1.Seriously, there has been alot of press about how the debt/savings ratio is so high. Well, a large proportion of that debt is wrapped up in mortgages. Once mortgages are not so attractive, the money will go elsewhere.

Quite frankly anything that the government can do to promote fiscal responsibility is fine by me.

2. On a strictly greedy basis: As somebody who RENTS...I say bring it on!

I am not wealthy...I am not in the top 10%, 5%, whatever % of earners. I am saving every goddamn penny I can make and still can't afford to put 20% down to get a conventional mortgage on housing in my area.

If this goes through...and does bring down housing prices, it would sure as hell help me afford a roof over my head. Unlike the boobs who are counting on a huge deduction to make them rich, I just want a place to live and call my own. If I save some money in the process, so be it.

Hurray for the little guy. All the landed gentry can go pound....uh...road salt.

[BlueSkyJaunte]

"landed gentry"?

You're on crack.

[Jamie79SC]

Goldmember,

"Hurray for the little guy"?

You've got to get a job with the administration. If you can make this idea sound populist, you just outdid Rove himself!

[1967 R50/2]

Hey Blue-

You live in Chandler. When the bubble bursts, be sure it'll burst big in AZ. Most of my family lives there...good thing they aren't planning on selling soon.

I can't believe what a one story stucco building on a 1/8th of an acre of sand with no basement or attic goes for.

And it's not like there is a lack of land....most of the state is empty.

[1967 R50/2]

Originally posted by Jamie79SC
Goldmember,

"Hurray for the little guy"?

You've got to get a job with the administration. If you can make this idea sound populist, you just outdid Rove himself!

You just clearly defined the difference between the "haves" and the "have nots".

You have...so you think you are entitled to some special treatment. ie. tax deductions for going into debt. (Ridiculous if you think about it.)

I have not. I see no special logic as to why you should get any deduction at all.

Sorry, Jamie but this WILL benefit the little guy trying to get into their first home.

BTW: My Alias is not Goldmember...that is just what I am famous for.

[jyl]

I can't imagine this ever happening. Death by voter.

On a theoretical basis I think there's grounds to question whether there should be a mortgage interest deduction. I personally question all of these deductions that are aimed at encouraging a particular behaviour. But after you've gotten generations of Americans to take on mortgage debt with the expectation that they can deduct the interest, there's no way you can pull the rug out from under them.

[BlueSkyJaunte]

Originally posted by 1967 R50/2
Hey Blue-

You live in Chandler. When the bubble bursts, be sure it'll burst big in AZ. Most of my family lives there...good thing they aren't planning on selling soon.

I can't believe what a one story stucco building on a 1/8th of an acre of sand with no basement or attic goes for.

And it's not like there is a lack of land....most of the state is empty.

Unless we run out of water that burst will happen AFTER the CA blowup.

BTW, you have an R1100S and 2 classic BMWs. If you really wanted to own a house, you could.

[RallyJon]

I see more a difference between red and blue states. Guess which states have the silly real estate values? Guess which states the Republicans don't care about pissing off, since they're not voting for them anyway?

[EdT82SC]

Originally posted by 1967 R50/2
... I am saving every goddamn penny I can make and still can't afford to put 20% down to get a conventional mortgage on housing in my area.

Dude, you have three motorcycles. You are not saving every penny you can. When I bought my first "house", a one bedroom condo, I was driving a 20 year old POS Oldsmobile, and living with my mother so I could save rent money. And I didn't have 20% down. I put 3% down. It's all about priorities, and your top priority is obviously not a house.

[fintstone]

As a homeowner who appreciates tax break, I realize that it is not fair to have a special tax break to encourage/aid one industry at the expense of others. Not any more than giving a break on car purchases, but not boat purchases. It is simply not the business of government to provide financial incentives for one industry at the expense of others (since disposable income if a finite amount). If they get rid of the mortgage break and use that to reduce overall rates...for everyone...it would hurt, but would certainly be fair. Obviously the mortgage interest deduction incorrectly encourages people to buy more home than they need or to refrain from paying off their home.
As far as renters...if the mortgage break affects rental property; it will not help you a bit because landlords will just pass on the added cost to you...plus 10 or 15%.

[1967 R50/2]

Originally posted by EdT82SC
Dude, you have three motorcycles. yadda, yadda, yadda

I DON'T OWN A CAR. You can own three bikes (and the commensurate insurance...vintage insurance and up-keep is nothing prcatically) if YOU DON'T OWN A CAR.

Garage rental space is the same as for a car and gas mileage is better.

However, i have been known to drive a MINI now and again.

[Jamie79SC]

Flintstone,

One could have a simple tax code that is in place only to collect revenue. Our tax code is designed to do that as well as to influence behavior. Tax things we don’t want people to do or use (excise taxes) or give deductions or credits to encourage people to do what we want them to. That isn’t likely to change in our lifetimes.

I guess what gets me the most about this subject is that if you contribute enough to the right people, (on either side of the isle) and have good enough lobbyists, you can sneak whatever deduction or credit that you or your business needs in as an obscure attachment to some marginally related, or totally unrelated bill.

If you are an average Joe Blow, you don’t have a voice. Don’t tell me you can ‘vote the rascals out of office’ either. I’m one of those elitist types that doesn’t think that much of the electorate knows enough about history, economics, or geography to make a very informed decision about their representatives’ voting records. They’re more interested in intelligent design being taught in school, or whether gays can marry…

[Nathans_Dad]

Two Words:

FLAT TAX

[techweenie]

If the government was run to benefit the population, it would support home ownership with tax breaks above and beyond the mortgage tax deduction.

Homeowners -- generally -- maintain their properties, commit fewer crimes and are a smaller drag on public services overall.

[CamB]

How does it work currently there? Mortgage interest tax deduction and capital gains tax? Do you guys have to account to the govt for the increase in value of a residential property (on sale, obviously)?

On an intellectual basis, I have no problem with the deduction of tax on mortgage interest if capital gains are being taxed too. I'd have no problem losing the mortgage deduction if there was no capital gains to match it - that just ends up being a timing issue.

Tax deduction on mortgage payments is interesting - while it favours a higher level of household debt, it actually adds an incentive to save alongside a mortgage. Think about it - if interest on a mortgage is not tax deductible, your investment preference is to pay off your mortgage because you benefit from the mortgage interest rate as an after-tax return ---> pretty hard to match by investing elsewhere. If mortgage interest is tax deductible the number of alternative investments is much wider.