Posted on 01/10/2009 11:19:21 AM PST by curiosity
Ask most people in America today whether buying a home is better than renting one, and you’ll likely get a response that equates renting with stuffing money down a garbage disposal. The idea of homeownership today is not one that simply evokes the comfort or pride of living in a place of one’s own. Instead, it’s become part of a common investment philosophy.
But if you ask Edmund Phelps, the Nobel Prize-winning economist from Columbia University, he’ll proudly declare that he doesn’t own a home. And to him, that’s not a bad thing. “It used to be that the business of America was business,” said Phelps in August 2008 to Bloomberg News. “Now the business of America is homeownership.” In fact, many economists will tell you that the American love affair with homeownership has some consequences that you won’t normally hear discussed.
(Excerpt) Read more at richmondfed.org ...
An article to consider for your ping list.
Actually my nephew does not own a home, and he has enough money to buy a few dozen. Does not want to be tied down and likes to travel.
Actually, what’s needed is to stop using employers as collection agents for the IRS. If every wage earner paid their own taxes quarterly, things would sort themselves out within six months.
Fine, as long as the county knocks off about 75% of the amount I'm paying for property tax at the same time.
Hmmmm. Let's see. I get about a $4000 net reduction in my combined State and Federal income taxes. And I get to pay $12,000+ in local taxes too.
ML/NJ
Buy Spam while it is still available.
I think it would take 9 months...
Last time I checked, were against using the tax code for social engineering purposes.
Renters and homeowners both pay property taxes. The difference is that renters pay it indirectly: their landlord pays it, and then passes on to the renter in the form of higher rents.
Only the homeowner is getting a subsidy from the mortgage interest deduction.
Yeah, sure. But how much? And I guess I pay property taxes when I go to McDonalds too, right? And the landlord pays nothing.
ML/NJ
Indirectly, yes.
And the landlord pays nothing.
Property taxes to a landlord are a cost of doing business. Landloards are in the business of making money. If their rents can't at the very least cover their costs, then they are not going to stay in business for very long.
They claim that we are over-invested in housing because of high home-ownership vs renting. However, if more people were renting instead of owning their own home, there would have to be more landlords who would be investing in more rental property. Same difference.....
Go read the article again. That is not their argument.
One thing that these articles do not treat is the capital gains, and other taxes assessed on real estate transfers and holdings. Investors in other capital assets can deduct interest paid to support those investments, and generally have virtually no tax cost of ownership - it is only reasonable that home owners have equal rights with respect to real estate capital investment. Suppose states and municipalities were to impose transfer and “property” (ownership) taxes on capital assets held, instead of just on real estate. Great hue and cry from the wealthy, I would think.
Only the homeowner is getting a subsidy from the mortgage interest deduction.
Taxes upon home ownership are calculated into rents as a cost, but tax sheltering effects of home ownership are not calculated into rents as a reduction in cost?
I take it you're not an accountant.
ML/NJ
Yes, but a landloard has to pay taxes on his rental income.
A residential owner pays no taxes on the amount he saves in rent.
Of course they have expenses, and property taxes are among them. What's your point?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.