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Posted on 07/20/2011 4:19:53 PM PDT by NormsRevenge
WASHINGTON (AP) — A new bipartisan plan to reduce government borrowing would target some of the most cherished tax breaks enjoyed by millions of families — those promoting health insurance, home ownership, charitable giving and retirement savings — in exchange for lowering overall tax rates for everyone.
Many taxpayers would face higher taxes — a total of at least $1.2 trillion over the next decade, and perhaps more.
The details and impact of the plan, released this week by the bipartisan "Gang of Six" senators, emerged as President Barack Obama called congressional leaders to the White House on Wednesday to determine, in separate meetings, their bottom line for extending the nation's debt limit while also cutting spending at the greatest amount possible. The role of additional tax revenue remained a sticking point.
(Excerpt) Read more at news.yahoo.com ...
No other industry gets this favored treatment on the form 1040.
It was also partially to blame for some of the worst excesses of the housing bubble. Look how many refinanced to the hilt and pi$$ed away the proceeds, in part because they got a huge deduction on those mega-payments.
And by lowering overall tax rates to balance the loss of that deduction, all taxpayers - not just those deeply in mortgage hock - would benefit.
The mortgage deduction needs to go the way of agriculture subsidies and ethanol.
I keep trying to explain to my wife why we’re paying off the house as fast as we can to get rid of the mortgage.
She’s like “But we get the deduction”
Spends $200 and says “But I saved you $300 it was a sale.”
We are underwater on our mortage and can’t sell our home to save our lives without a loss. We rent out the house, because we wanted to relocate. (our choice, admittedly). However, since we don’t live in it, we can’t deduct the mortgage interest.
We are an average income family. We paid $7K the first year, in additional taxes — meaning, we had to WRITE A CHECK for $7K, right off the bat. Next year it went down to $4K because as the spouse w/ the supplemental income, I just went back to work part time. This past year, we had to come up with $4K additional —
People would throw holy living hellatious FITS if they had to do this ....that IS our vacation money, our new furniture money, our discretional buying income money. We had to put in on the credit card and just pay it off ...putting us further in debt.
I agree - it would KILL the middle class and just shutter the economy even further. These men/women in our legislative halls are freaking evil idgits.
Each of them earns $180,000 a year and their family expenses are exactly the same, with one exception.
John bought a $200,000 house with a $140,000 mortgage.
Jack bought a $400,000 house with a $340,000 mortgage.
In my opinion, there is no reason why John should pay more in income taxes than Jack, just because John is more prudent and chose to take on less debt. No reason at all.
You cannot blame the mortgage crisis on the mortgage deduction.
You cannot do it. The mortgage deduction has been around for a long time, and helped millions of people to achieve home ownership without any negative effects whatsoever.
Blame the crisis on the lending of money to people who had either no intention or capability to pay back borrowed money.
People did refinance beyond their means, but THAT was not the core of the rotten tree.
They know the American people won't accept the no doc loans to welfare queens.
The Repubies involved with this piece of crap should be primaried with extreme prejudice the next time around.
This is bullsh1t!!
Take away the mortgage deduction and prices will lower to compensate. That's what markets generally do when you remove a government subsidy.
This isn’t about saving money. Its about funding Obamacare.
I will concede that I cannot use the phrase “without any negative effects whatsoever” because I do believe it has contributed to the inflation of house prices and other effects.
I tend to view the mortgage deduction as a mechanism our society has used in the past with the intention to aid and facilitate the family unit in obtaining housing, much the same way the dependent tax deduction has.
But there is no way the mortgage crisis was the result of the mortgage deduction.
What’s your reaction to my post #7?
It sounds to me as if you are not doing your taxes right. You are allowed to deduct your mortgage interest on your income property, provided that your are declaring that income. You need to file a Schedule E with your 1040 form. You can also deduct for the income property your property insurance, property taxes, utilities if you pay them not the tenant, repairs and maintenance supplies and labor, travel to care for the property or to buy things to use with the property, legal advice, landscaping, etc. You might even find you have a tax loss which can be deducted against other taxes you owe. On the front page of the 1040 form there is a line for Schedule E income. You either list a plus or a minus amount from your Schedule E form and add it or subtract it from your other income.
Hope this helps. If anyone else is reading this with a similar housing problem, you should get a Schedule E and calculate if you could save money by renting the property out and moving into a cheaper rental.
I cannot, as a conservative argue with the observation that the government sticking their fingers into anything tends to throw it out of whack, and you are correct.
I counterbalance that with the concept that taxing something decreases that behavior (which is what removing the mortgage deduction would effectively do with home ownership) while the opposite effect occurs when decreasing taxes.
All in all, here we are today, and increasing taxes on people buying houses will make it harder for people to do so.
Gang: noun - a group of shifty characters who have come together to terrorize and steal from the people around them.
The core of the problem is that banks and their employees would approve loans with minimum documentation, even encouraging people to lie about their net worth, because they got commissions, and then could bundle and ship the packages of mortgages to unsuspecting investors who were stuck with the results. I know we don’t like regulations, but there have to be some controls against dishonesty by those with experience who should know better and hew to some sort of ethical standard and don’t.
Exactly, and the purpose of taxes should be to raise that amount of money the government needs for its legitimate functions, not to modify the behavior of the public.
I think we can politely agree to disagree. Cheers!!
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