Skip to comments.Why Ending the Mortgage Interest Deduction Would Save the Economy
Posted on 02/14/2011 2:49:47 PM PST by fightinJAG
Earlier today, the White House released a budget proposal that included trimming the mortgage interest deduction for taxpayers in the top income tax brackets.
This is the first step in eliminating what many economists view as an expensive and inefficient housing subsidy.
Unfortunately, many of the critics of the mortgage interest deduction focus on its immediate costs. If it were eliminated, it might bring in more than $2 trillion of new revenue for the government oras I proposed this morningallow up to $2 trillion of new tax cuts for the American people.
Actually, I think getting rid of the housing subsidy could be an even better deal than thatproviding it is done by expanding the deduction into a general tax cut instead of closing the loophole and raising taxes.
(Excerpt) Read more at cnbc.com ...
WTF....Just STOP all the STUPID SPENDING NOW.
Please note: when I post something written by John Carney, a staffer at CNBC, some posters confuse him with JAY Carney, the new WH press secretary.
Two very different guys!
Why not save all the time and Money on all this crap and just send in your Pay check and line up for the Cheese
Give me a flat tax, where everyone has ‘skin in the game’, and I’ll consider it.
Cool. As long as I can eliminate the expensive and inefficient subsidy I provide the county called 'property tax'.
Otherwise, the administration can shove it.
Canada survives without the deduction. For decades I’ve felt it needs to be eliminated. And not on the rich, but across the board. I hate this “just on the rich” nonsense.
‘Couse, if I had my way, the income tax would be the same rate for everyone, even if you made only a dollar a years. We’ll take a dime please.
The time for a flat tax is NOW.
I’m learn’n to speak chi com
Carney practiced corporate law at firms such as Skadden, Arps, Slate, Meagher & Flom and Latham & Watkins, primarily representing banks, hedge funds and private equity firms.
As if anyone here didn't know, this is the core of this idea. This is just a transfer of wealth collected from the mortgage payers, i.e., the productive people, to the indolent, i.e., Obama freeloaders. [BTW, Carney, they're not "tax cuts" if you didn't pay the tax in the first place.]
Shell games don't get any more obvious than that.
But that's easy for me to say since it only saves me about $350 per year now.
Take away the mortgage deduction and lose the votes of the handful of productive people who still support you, idiot.
This guy seems determined to commit political suicide.
The Wall Streeter derivatives boy who wrote this article is dishonest.
Not only will the taxpaying homeowner have to pay thousands more in taxes every year, the value of his/her home will plummet another 20% or so, wiping out a lot of equity.
You don’t abolish a tax exemption that people made a 30-year investment decision on and on which they have much if not most of their accumulated wealth.
HORRIBLE idea. Next.
If it were eliminated, it might bring in more than $2 trillion of new revenue for the government oras I proposed this morningallow up to $2 trillion of new tax cuts for the American people.
Hahahaha LOL Only a democrat could say that ending a tax, thereby increasing your taxes, could spur a big tax cut
The author is an ass clown, like most of the idiots working at CNBC, owned by NBC.
If you ‘re talking flat tax with no deductions OK, otherwise we’re back to the subsidy shell game with the deductions. Get rid of ALL federal taxes and institute a federal sales tax and then the Commiecrats will have a reason to make the economy grow.
The "mortgage deduction" is merely the only major surviving deduction of a general class that used to be across the board: deduction of interest paid from your income taxes, since someone else is going to pay interest income tax on that interest paid to them by you.
25 years ago our very own "republican" BobDole pushed through a lovely little bill that wiped out such a deduction for all other interest payments; prior to 1985, the interest paid on any loan - cars, credit cards, whatever - was deductible.
It's called the principle of no double taxation. No difficult to understand: why should the government tax the same money twice?
On the contrary, Mr. Carney. Not only should the mortgage deduction be preserved, but the same deduction for all other interest paid should be reinstated, and BobDole's name be struck from the Republican party rolls for ever.
If not, then how 'bout we cancel those taxes I gotta pay on that "interest income" stated on them 1099's?
Better yet, just kill the Marxist inspired income tax. It was never meant to do anything except collateralize the Fed anyway.
Of course they would.
Next it will be free housing for the nonworking class, to go with free medical. Share the wealth reparations.
Top income level my ass. They’ll have a go at all of us.
They do this and I no longer make any payments on my place. They can shove the thing right square up their asses.
[ Give me a flat tax, where everyone has skin in the game, and Ill consider it. ]
Not requiring the same percentage rate of taxes across all citizens allows politicians to play the “class warfare” game in a way that helps them stay and get into power.
I second that whole-heartedly.
Incorrect assumption. The wealthy would move their holdings to corporations and then rent the property back to themselves. This would allow them to deduct the mortgage interest as an expense and then depreciate the realestate. In other words, there would be unintended consequences and the $2 trillion would not materialize.
“Not only should the mortgage deduction be preserved, but the same deduction for all other interest paid should be reinstated, and BobDole’s name be struck from the Republican party rolls for ever.”
They can take away my mortgage interest deduction when they pass the Fair Tax Act implementing a national sales tax.
Housing, home furnishings and home utilities, are a major section of our economy. This would be like dropping a bomb on yet another major sector of the economy.
The timing couldn't be worse. This would drive even more home buyers from the housing market making the dip even worse.
Unless you grandfather existing mortgages, it's a fundamentally unfair tax. The government provided an incentive to incur debt to buy homes, and to dramatically end that incentive after they have bought a home is just not right. The additional $2000-$4000 tax that will result on average homeowners from removing that incentive may well push even more homeowners into bankruptcy.
By compelling millions of Americans to abandon upside down homes out of protest by depriving them of faith in the economic future of the nation?
Ah, I get it, I have to think like a G*D* socialist, which is to say, not at all.
1. Flat Tax all forms of income at 5%.
2. Enforce the Tax code, especially on those making over 1 million a year who try to evade taxes by sending their money offshore.
3. Make any future loopholes illegal without a freeking constitutional amendment.
At 5% it won’t be worth anyone’s time to try to cheat on their taxes. Plus you could make the penalty for tax fraud being a fine of 10X the amount you cheated taxes. (That way the IRS has reason to hit up the tax cheats at the high end of the bracket and if someone ont he low end mis paid their taxes by a few buck it isn’t going to bankrupt them).
If you are going to tax all forms of income the rate must be low (at the most 5%), if it is too high you end up changing the behavior on investments etc... so that people will try to “legally evade” their taxes by using something not covered in tax code.
If the government cannot live on 5% of the GDP they are too damned big to begin with.
Let’s really screw the Government and just start living in our vehicles......oh wait, then they will raise the vehicle tag tax, CRAP!
If I can't deduct the interest, then I must pay higher tax that then never circulates in the economy. Not to mention that the price of the house was artificially inflated by having the deduction to begin with, so now I'm hosed twice.
Talk about kicking the housing market when its down though... this does however further the Leftist goal of sticking 95% of the population into government tenement projects.
LOL! Yep! They're not even trying to hide it anymore......
[ Unless you grandfather existing mortgages, it’s a fundamentally unfair tax. The government provided an incentive to incur debt to buy homes, and to dramatically end that incentive after they have bought a home is just not right. The additional $2000-$4000 tax that will result on average homeowners from removing that incentive may well push even more homeowners into bankruptcy. ]
When the Government Subsidizes something you end up with more of it, and people wonder why there was a housing bubble.....
[ They can take away my mortgage interest deduction when they pass the Fair Tax Act implementing a national sales tax. ]
Amen to that!
[ Lets really screw the Government and just start living in our vehicles......oh wait, then they will raise the vehicle tag tax, CRAP! ]
How about this, talk to the government about BUYING LOCK STOCK AND BARREL, some land from the federal government. Kinda like the “Gadsden Purchase” only we call it the “Galt Purchase” for obvious reasons of course.
Renting in general would be a relatively more attractive way to be housed. Most renters wouldn't bother to rent to themselves and would end up sharing the savings with landlords in a competitive market. The housing market would be more rational without the distortion of the tax break.
Excellent point on double taxation!
The little "left as possible" democrat is a first-time home buyer, and received, quote, unquote, $8,000 from Obama.
Hahaha!! Pretty please?????
No amount of taxation will “save the economy” when Obastard proposes budges that are nearly 100% more than the estimated revenue and when government handouts comprise WAY over half the budget.
Are you seriously suggesting that Canada has a better tax model than the US?
>>Are you seriously suggesting that Canada has a better tax model than the US?<<
Actually, I was being tongue in cheek. I forgot the sarcasm tag.
That said, I really hate tax deductions. It is how the government controls people.
[ The little “left as possible” democrat is a first-time home buyer, and received, quote, unquote, $8,000 from Obama. ]
Ask the little fool, “Just how much of the GDP does the government need?” and “What is the limit as a percentage of the GDP should the government be allowed to take?”
I bet they will stare at you like a deer about to be ran over by an 18 wheeler.
Now that's a proposal that actually would save the economy!
Buying votes wouldn't work so well if everyone had to pay the price of their vote. Then there would be a chance the politicians would get spending under control.
At the same time, wealthy people would invest it far more efficiently than the government could, thereby creating more jobs and more wealthy people.
lol, sorry, it’s often hard to see sarcasm in words only.
Elimination of the housing mortgage deduction would be the straw that finally sent the U.S. plunging into a full blown depression, as it would shatter the fragile market for housing by making housing purchases that much more unaffordable, thereby triggering a new death spiral of foreclosed and repossessed housing as even more folks are forced out of, or are forced to walk away from, homes that are now even more underwater relative to their mortgages.
I agree but when you plan your financial life around the deductions and then they pull the rug from under you, well you're often screwed.