[Tenacious 1]

Renters came out winners under the new tax law. For over a century, the federal tax code catered to homeowners and treated renters like second-class citizens. Homeowners have been able to deduct interest on their mortgages and home equity loans, as well as property taxes. Meanwhile, everyone, including renters, footed the bill for these deductions by paying higher rates. The new tax law at last begins leveling the playing field between renters and homeowners.

Wait a minute. The homeowners are getting to deduct the mortgage interest they paid from their gross before tax income. They are paying a property tax on the property, right? I always thought the offset was to encourage home ownership and broaden the tax base. The system trades property tax for income tax, thus transferring the taxes paid to local government instead of federal. When did renters have to pay property taxes.

Maybe my understanding is off.

[Paco]

Renters pay property taxes via their rent. While they aren’t assessed property taxes, their landlord is. Regardless, the renter pays it.

[Hawthorn]

>> Maybe my understanding is off. <<

Nope, you’re fine.

Rather, it seems merely that Betsy McC has a highly imperfect sense of economic logic — and/or there’s a serious deficit in her ability to indulge in clear thinking.

(I could call her an economic moron. But that wouldn’t be prudent.)

[CedarDave]

Are you saying that under the new tax law, mortgage interest moves from being a Schedule A deduction to a deduction to gross income in determining adjusted gross income? I didn’t know that and assumed it was going remain in Schedule A.