Posted on 03/13/2011 9:11:14 AM PDT by Bean Counter
Maybe. The assumption is that the full deduction exceeds the standard deduction. If interest and taxes on the house is about 14k and the standard deduction is the same , the interest deduction does not have a tax effect.
then charge bussinessmen for all frequent flyer miles they are awarded when they travel for their companies....they mount up to many thousands of dollars NOT taxed that should be....
heck no! they shouldn’t touch the mortgage deduction OR the child tax credit!
They need to end welfare.
On second thought, they can end the child tax credit for anyone receiving welfare.
Everyone should be taxed on the same basis. This business of deductions, and credits; of tax brackets based on “earned” income; of distinguishing between earned and unearned income; of rich and poor; of them verus us; etc.....All of it gives the ruling class a wedge to divide the citizens so that they can tax certain groups based on whatever the current agenda happens to be.
A tax for thee and not for me.
The deduction is part of the calculation of whether you can afford the house. Taking it away will cripple home prices hurting even those that have paid off their mortgage.
I have the money to pay off my mortgage. If the deduction went away, I would simply remove the cost of my house from my investments. Multiple that by millions and the business and financial sector take a whack too. In the end, this move to increase taxes will reduce income to the government.
I don’t understand why conservatives would fall for this populist move.
I've long said that a phased-out approach to eliminating the mortgage interest deduction would be a good idea. Any existing mortgages could be left untouched, while interest on new mortgages would be fully deductible in the first year and declining from 100% to 0% deductible over perhaps a decade, in 10% increments.
Allowing deductions for mortgage interest is as STUPID as allowing deductions for credit card interest (and they did get rid of that). I probably net several thousand out of the deduction, but still would prefer to see it go away (and yes, I do my taxes, and I’m familiar with the standard deduction and know that I would get that anyway).
What the deduction has done is convince people that if they take out a really big loan, they can screw the IRS by taking on huge debt in oversized houses and multiple houses.
This has driven money that should be used to modernize factories into the housing market, which is the LAST PLACE it is needed. After all, we’re sitting on millions and millions of empty houses now, thanks to the bubble that is still, very slowly, winding down - while at the same time importing practically every consumer item from China. We don’t need any more incentives to keep adding to the supply of housing, especially at this cost.
It’s time to kill off this monster and kill off any type of credit to replace it.
(sorry if that upsets people, but I’ve had it with this housing bubble, and it would not have been nearly as bad had this deduction not existed)
You bought the house and the mortgage because of the deduction?!? Maybe that’s why you still have a mortgage and I don’t.
That’s just plain dumb. Parents are the ones who are paying extra to raise children who will pay for non-parent’s social security. Child tax credits should be much higher to encourage more children.
It's worth noting that a lot of high-income people have already "lost" their mortgage interest deduction anyway. Under the alternative minimum tax (AMT), most itemized deductions disappear and are replaced with a larger standard exemption, so at a certain income level there is no tax benefit to be gained from carrying a large mortgage.
Only people that can pay cash for a house should own a house?
Really?
“If you didn’t pay any state income taxes, you don’t get to vote in state elections.”
I’m not sure I like idea, living here in Texas (LOL).
Yep. It will also trash the portfolios of anyone who has outstanding loans, as the equity cushion will be chopped away.
As noted by a previous poster, a 12% tax credit on the interest is less than he value of a full deduction. Depending on your bracket, you might be comparing that 12% to a deduction of 25 to 33%. That has to make housing less affordable, which means lower prices.
Moreover, capping any interest credit above $500K has to make higher priced homes less desirable, too.
Over the long term, I could agree with a phaseout of this deduction, but it has to be done gradually, both in the interest of fairness in the sense of predicability of government policy (people have made huge financial decisions based on the long-standing policy of interest deductibility) and for the health of taxpayer supported entities such as banks, Fannie, Freddie, and the FHA.
Two other comments: First, distorting as the interest rate deduction is, we wouldn't be grasping at the cash that eliminating it is supposed to bring if our government wasn't overspending by so much. And, second, the government is working in two directions at once--so many of it's policies (HAMP, TARP, bank support, unlimited backing of Fannie/Freddie, CRA) were aimed at driving up or keeping up the value of housing; this one will drive it down even further.
“We need MORE children ..more native BORN American children ...elimation of tax credit might mean fewer children”
You are TOTALLY RIGHT, of course, but there are a lot of people that could care less if we wind up like Japan (ignoring the earthquake), with a COLLAPSING POPULATION.
Since my kids will have to live in that country, I consider it a duty of government, no different than national defense, to make sure we remain populated.
Of course others may feel differently.
Why should we believe anything coming from liberals in Mad Wisconsin?
The withholding rate increased by $38 per month for me after the tax tables were changed.
I have never heard of anyone doing that nd my parents both sold real estate for the better part of 30 years.My SIL is a broker and still sells and they do not figure that into whether you can afford the home or not.IMHO that is not a wise thing to do.
“The federal government does not exist for the purpose of shaping personal decisions like having children. “
Amen! As someone who has never been able to take either a child deduction and only once able to take the mortgage deduction I get upset that others are not paying their share.
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.