Thus it is shown how folks have been driven out of the idea of owning a home and instead are forced to rent. Or they live in big cities where one can only rent an apartment. Why not make rent a tax deduction? Of course, if people can’t own their own property, then it makes it easier for the government to control them by saying “Only the Rich can own property” which is what the colonialists came here to get away from, being renters and serfs of the politically powerful.
Right now the deduction does not apply to homes worth over 1 million bucks. They may half it to 500k. Personally, it doesn’t effect me, I could care less.
HEY!! I claim it! Do away with this and it will bury me and my family!
Bread and circuses. All we need are the tunics and we are there...
Now is not the time to be twiddling around with anything that would depress residential real estate further. I don’t care what the justification might be. Leave it alone. If there’s a rational rationale, save it for better times when the market can absorb it. It cannot at present.
Interesting history, in that you post (and excerpt) from a single source:
Is there a particular reason for you to excerpt this blog?
It’s your blog, right?
Take away the mortgage interest deduction and you might as well kill Schedule A with all of the other Itemized deductions like State Taxes, Medical Deductions, Charitable Donations, Casualty Losses and the rest. I am one who waited for years to be financially able to put my 20% down for a mortgage. Where is President Obama’s legendary ‘FAIRNESS’ in taking away something that I had every reason to trust would continue in my budget?
(Oh, that is right, he hasn’t been able to pass one yet, doh!)
Home values will drop.
Rent will go up.
I have claimed this deduction for 20 years. It will hurt me and my family if it goes away.
But I have long complained about loopholes and deductions for certain industries and special interests. I feel I would be a hypocrit if I said “absolutely not”. But it should be one of the last deductions to go, not the first.
What this tells us is that there are really only a small percentage of homeowners that have paid their bills, their mortgages, etc. on time and are current enough to actually claim the deduction.
So many who don’t, or haven’t, paid their payments, playing cat and mouse with the foreclosure process - waiting for Uncle Obama to ‘reset’ the slate to ‘fairness’.
Then again, Obama has an awful awful lot of Section 8 home occupiers who could give a damn about claiming any deductions - they get a free deluxe ride on the tax rebates (that they never paid).
I am in favor of doing away with the mortgage interest tax deduction, if it was part of a broad tax overhaul that a)lowered and flattened all the tax rates and b)eliminated all deductions, exemptions, credits and exclusions; if, in other words, there was one set of rates, period, and that’s what everyone paid, period, regardless of how they spent their income during the year.
Individuals, just like corporations, deserve a tax code that does not try to bend their economic activity toward tax avoidance, but allows and encourages them to make the best financial decisions for themselves, decisions neither helped more nor disadavanted more than other decisions simply by the tax code.
Conservatives claim to be about SMALL government and then vote their own personal self-interest when it comes to the social engineering of big government through the tax code.
If you have a mortgage, pay it off. If you want a house, save every last penny you can and pay cash.
Bernanke and company would rather rape you than look at you.
This will leave a mark. Going back to the Clinton era economy is sounding better all the time, hell back then you (well they) could deduct the interest along with the principle..and you old used skivvies.
Back in 2000, Steve Forbes promoted "a flat tax thats a tax cut. He wanted to eliminate the mortgage deduction, and he also wanted to eliminate the taxability of interest received. He got huge flak from the Realtors, and he tried to defuse it by emphasizing that most people would still make out under his plan. But he failed, signally.What he should have done was to emphasize the effect of the non taxability of the interest income: It would mean that the borrower was "selling a tax-free bond."
If you were paying 5%, say, and the flat income tax rate was 20%, the lender in the current deductibility scheme would have to pay one-fifth of your interest payment to the IRS. Then you would claim that 5% interest payment as a deduction - and the result of that deduction would be to cut your tax liability by exactly the same amount that the lender had to pay the IRS. In other words, under a flat tax the precise revenue effect of interest deductibility is to cancel out the tax revenue from the income tax the lender has to pay. So eliminating the income tax on interest received would cut the borrowers interest rate in a way which would exactly offset the effect of eliminating the deductibility of interest.
Forbes should have pointed that out and he should have emphasized and proved it by dirtying up his clean bill with a grandfather clause, saying that in-being mortgage interest rates would automatically be discounted by the tax rate. An automatic refinancing to a lower interest rate, exactly canceling the effect of the elimination of the deduction and eliminating paperwork for both the lender and the borrower.