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Do you think they will take away the Mortgage interest deduction?
Posted on 4/13/11 at 9:03 am
Posted on 4/13/11 at 9:03 am
If so, do you think it is fair to do it to people that have existing mortgage loans? I am sure there are people that factor in the mortgage deduction when figuring out what monthly payment they can afford.
How do you see this playing out? Do you think they will just target this for the so-called "wealthy" Americans making over $200,000 per year?
How do you see this playing out? Do you think they will just target this for the so-called "wealthy" Americans making over $200,000 per year?
12
Posted on 4/13/11 at 9:10 am to Chicken
Where have you seen this discussed? I haven't heard anything about eliminating the mortgage interest deduction...
Posted on 4/13/11 at 9:12 am to Chicken
When pigs fly.
Posted on 4/13/11 at 9:18 am to Chicken
quote:Yes. It's inevitable, IMO.
Do you think they will take away the Mortgage interest deduction?
I think there will be a phase in period, such as 90% deduction the first year, 80% the next year, and so on.
quote:Not really, but when was "fair" a high priority for congress?
do you think it is fair to do it to people that have existing mortgage loans?
quote:Possibly, but I don't think that would raise enough tax revenue.
Do you think they will just target this for the so-called "wealthy" Americans making over $200,000 per year?
Posted on 4/13/11 at 9:58 am to LSURussian
I agree with Russian. It will inevitably happen, not for a while, and people who already own homes will be grandfathered in. FWIW I think the grandfathering will be even more generous than Russian believes -- for instance, people over some arbitrary age (55?) will never lose the deduction (just like people over a certain age get special breaks on the homestead exemption).
Never, obviously, which is why we're in a situation where a renter like myself has to subsidize folks who make $200,000 a year to make sure they can buy a 3,000 sf home.
quote:
Not really, but when was "fair" a high priority for congress?
Never, obviously, which is why we're in a situation where a renter like myself has to subsidize folks who make $200,000 a year to make sure they can buy a 3,000 sf home.
Posted on 4/13/11 at 10:00 am to Cold Cous Cous
I don't see the republican party doing this to the american tax payers.
Posted on 4/13/11 at 10:03 am to Chad504boy
quote:
I don't see the republican party doing this to the american tax payers.
I don't see either party doing this unless they're flat out of other options. But eventually, I think they will be. You have to wonder - if they didn't do it in light of the recent residential re bubble I don't know what it'll take.
Posted on 4/13/11 at 10:08 am to Chicken
quote:
Do you think they will take away the Mortgage interest deduction?
I always thought it was entirely off the table, but from my recent trip to The Hill, it seems like both sides are actually considering it in some form. I was shocked.
quote:
If so, do you think it is fair to do it to people that have existing mortgage loans?
Fair? Sure. Laws change all the time. Handouts come and go.
quote:
I am sure there are people that factor in the mortgage deduction when figuring out what monthly payment they can afford.
I'm sure of that too. And if that's the difference, they are already way in over their head.
quote:
How do you see this playing out? Do you think they will just target this for the so-called "wealthy" Americans making over $200,000 per year?
Possibly. Just phase it out above a certain income, although that doesn't make a whole lot of sense because you have to have a pretty expensive house (and presumably higher income) in order to get the benefit in the first place.
Posted on 4/13/11 at 10:10 am to Chicken
i think they will "cap" the deduction at a certain tax percentage. instead of higher income taxpayers deducting mortgage interest at their tax rate, it will be limited to a lower percentage.
that way, it isnt really eliminated, but effectively raises more revenue.
that way, it isnt really eliminated, but effectively raises more revenue.
This post was edited on 4/13/11 at 10:12 am
Posted on 4/13/11 at 10:15 am to Tiger JJ
The impression I get is that homeowners "feel" that the mortgage interest deduction saves them a lot more money than it actually does. This is based on anecedotal evidence, but for instance I've talked to two different people who both, when telling me they paid off their mortgage, expressed concern that they were losing their deduction. One even asked if I thought he should trade in for a bigger house for the tax benefits. I was boggled.
I bring this up because repealing the deduction will probably cause a political blowback far exceeding the additional revenue generated. Congressmen won't be willing to risk getting voted out of office for something that isn't going to solve the budget problems anyway.
I bring this up because repealing the deduction will probably cause a political blowback far exceeding the additional revenue generated. Congressmen won't be willing to risk getting voted out of office for something that isn't going to solve the budget problems anyway.
Posted on 4/13/11 at 10:16 am to Cold Cous Cous
quote:
I don't see either party doing this unless they're flat out of other options. But eventually, I think they will be. You have to wonder - if they didn't do it in light of the recent residential re bubble I don't know what it'll take.
WIth the lower interest rates available out there, doesn't that naturally lead to lower deductions and increased tax revenue theoretically speaking already?
Posted on 4/13/11 at 10:18 am to Chicken
I don't see it happening IMHO.
Although under a pure Flat Tax system it makes sense (in exchange for larger off-the-top exemption amounts), the mortgage interest deduction (along with the associated property tax deduction and the charitable contribution deduction) are HIGHLY popular and would result in a large pushback from taxpayers.
If some sort of Flat Tax system is implemented, it will most likely be a modified version with the mortgage interest, property tax, and charitable contribution deductions retained, and all others eliminated. It would allow for a much simpler system yet retain the most popular deductions, which would probably garner general acceptance from taxpayers.
Although under a pure Flat Tax system it makes sense (in exchange for larger off-the-top exemption amounts), the mortgage interest deduction (along with the associated property tax deduction and the charitable contribution deduction) are HIGHLY popular and would result in a large pushback from taxpayers.
If some sort of Flat Tax system is implemented, it will most likely be a modified version with the mortgage interest, property tax, and charitable contribution deductions retained, and all others eliminated. It would allow for a much simpler system yet retain the most popular deductions, which would probably garner general acceptance from taxpayers.
Posted on 4/13/11 at 10:31 am to Chicken
quote:
I am sure there are people that factor in the mortgage deduction when figuring out what monthly payment they can afford.
People actually do this? For some reason I'm a bit surprised but not completely shocked.
This post was edited on 4/13/11 at 10:32 am
Posted on 4/13/11 at 10:32 am to Chicken
I don't think they'll get rid of it. In recent years, Congress has shown no willingness to raise taxes or curb spending. Instead, we're going with deficit-spending and currency de-valuation.
You can expect any new government revenue to come from the top 1% earners and/or higher taxes on corporations. Politically, that's easier. The last thing any elected official wants to do is hike taxes on their own middle-class constituents in broad daylight.
You can expect any new government revenue to come from the top 1% earners and/or higher taxes on corporations. Politically, that's easier. The last thing any elected official wants to do is hike taxes on their own middle-class constituents in broad daylight.
Posted on 4/13/11 at 10:39 am to Chicken
quote:
If so, do you think it is fair to do it to people that have existing mortgage loans?
How isn't it? If they decide to raise income taxes, does that mean its not fair to people who have existing jobs?
quote:
How do you see this playing out? Do you think they will just target this for the so-called "wealthy" Americans making over $200,000 per year?
Its definitely going to cause a lot more people to buy duplexes, set up LLCs, and rent half of it to themselves and the other half to a tenant.
We're in the market for a house right now. The politicians are going to do what they do regardless, but hopefully the uncertainty at this point will cause mortgage rates to drop even more.
Posted on 4/13/11 at 11:04 am to Cold Cous Cous
quote:
The impression I get is that homeowners "feel" that the mortgage interest deduction saves them a lot more money than it actually does. This is based on anecedotal evidence, but for instance I've talked to two different people who both, when telling me they paid off their mortgage, expressed concern that they were losing their deduction. One even asked if I thought he should trade in for a bigger house for the tax benefits. I was boggled.
Man, is this ever true. I think a lot of people think that somehow the mortgage deduction is a positive cashflow event for them, and not merely the marginal reduction of an outflow.
It seems very clear that less than 5% of real estate agents understand the deduction at all.
Posted on 4/13/11 at 11:18 am to Tiger JJ
Probably the same people that say they dont want to get paid more because they will owe more in taxes.
Posted on 4/13/11 at 11:28 am to Tiger JJ
quote:
but from my recent trip to The Hill, it seems like both sides are actually considering it in some form
My first thought was that sure, I am relatively positive that Obama will propose this in his little "speech" tomorrow...the Dems have wanted this for some time
My second thought was always "no way the GoP members of Congress will let this happen"
After reading your quote above, I am slightly less confident in that conclusion. Personally, I think the idea is DISASTROUS for the housing market.
Posted on 4/13/11 at 11:29 am to Tiger JJ
quote:
It seems very clear that less than 5% of real estate agents understand the deduction at all.
you can count me in that number, as always JT
Posted on 4/13/11 at 12:01 pm to Shankopotomus
quote:
After reading your quote above, I am slightly less confident in that conclusion. Personally, I think the idea is DISASTROUS for the housing market.
The person that mentioned it the most explicitly was Kevin McCarthy (majority whip).
quote:
Personally, I think the idea is DISASTROUS for the housing market.
meh
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