Posted on 03/13/2011 9:11:14 AM PDT by Bean Counter
Hmm. Somebody is leveraged to the hilt I guess. I am all for this. Sick & tired of people overbuying homes while counting on the tax deduction for the interest to help them cash flow the house payment.
More democrats rent than Republicans... this plan takes money from the middle class and gives it to lower income democrats...( yes, there are new ‘programs’ for members of dem victim groups. How else to buy their votes?
The one Hussein was touting last year, where he jimmied the federal withholding tables to give everyone $400.00 more in their paychecks for the year. Which boils down to $8.00 / paycheck if you're paid weekly. Of course all it means is a smaller refund or in some cases you owe, but hey, Hussein calls that a tax cut.
You can count on the Libs extending the power of FanieMae, FreedieMac (or some form of the same) at the expense of the middle class taxpayers.
this would be a bigger kick to those of us whom have jumbos.....
Put a National Sales Tax and put it all towards the debt. Even poor folks who don’t pay taxes and middle class folks who have 100 kids would pay taxes.
So, currently, if a married couple, filing jointly, is making, say, $80,000 per year, they would be in the 25% tax bracket. If they pay mortgage interest of $10,000 per year, that would reduce their tax burden by .25 * 10,000 =$2,500.
Under the new proposal, they would only get a credit of .12 * 10,000 = $1,200.
In general terms, the tax increase would be (current tax bracket-12%)* amount paid in mortgage interest. For a couple making above $210,000, in the 33% bracket, paying $20,000 per year in mortgage interest, this is a tax increase of (.33-.12) * $20,000 = $4,200. This is clearly a soak the rich scheme, as it severely impacts those in the higher brackets who often have higher mortgage interest payments.
That's that muslim math that NASA's supposed to be proclaiming got us to the moon.
This is a good idea. In fact, eliminating ALL tax deductions is a good idea. You shouldn’t buy a home or donate to charity because it is a tax deduction.
The cost of housing would drop, and this would erode the value of my home, but it would also make it less expensive for my kids to get a home.
This would also put downward pressure on interest rates as people would be less inclined to buy at high rates absent the writeoff.
Of course, less deductions means less work for tax accountants and the IRS...I’m OK with that.
This is why I am a big supporter of the Steve Forbes flat income tax plan that:
1. Only has a 17% income tax on earned income.
2. Offers a generous initial deduction for the household (e.g., for a family of four, the deduction can be up to US$42,000).
3. Ends taxation of bank account interest, capital gains and stock dividend payments.
The result is for the vast majority of Americans, the income tax form will be simpler than the current IRS 1040 EZ form! Just the savings alone in tax compliance costs could be over US$200 billion per year--US$200 billion that can now be put to other more productive economic activity.
I have never been able to take advantage of the interest deduction. You need quite a few other deductions in order to itemize.
I guess we can start calling it “muzzy math” then.
Only if the income tax is eliminated
Once again I can’t understand why there are people who do not believe his goal is to destroy this nation.
Agreed. One of the complications I see is the corporate deductions. I don't have an expense account. I don't want to pay 17% on my gas and hotels for doing business. There would have to be some deductions, but I see the negotiations on those as a never ending quagmire in congress.
10% is good enough for GOD, so less than 10% for the flat tax.
Without the financial incentives to buy a home, you would have a much more mobile population that could quickly migrate from one state to another. To states like California, New York, and New Jersey, this would accelerate the ongoing exodus of taxpayers and corporations to a point that would collapse the states completely. While this sounds good, the government knows it couldn’t let it happen.
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