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(50 posts)

Mortgage interest deduction

  • Started 2 years ago by skeeter
  • Latest reply from hooper1961

  1. skeeter
    Member Profile

    I’d like to get some thoughts. Hopefully, this won’t devolve into a red vs blue match.

    How do folks feel about the mortgage interest deduction? It’s one of the largest deductions in the tax code. To the extent a taxpayer pays mortgage interest, she can deduct the interest portion in determining her taxable income. Presumably, this encourages home ownership. So the benefit of home ownership exceeds the “cost” of the foregone tax revenues.

    But nothing in life is free.

    Let’s say you have a country with 10 families. 5 own a home with a mortgage and 5 rent a home. The government needs to raise $10,000 per year to pay for services. Let’s also assume each family has the exact same pretax income and number of kiddos. Let’s also assume that each of the 10 houses are identical in value. Also assume that each of the 10 families receives the same government services with respect to roads, schools, parks, police, etc.

    Option A: Mortgage interest deduction. Each family with a mortgage pays tax of $900 and each family that rents pays tax of $1,100. Total tax revenue raised is $10,000.

    Option B: No mortgage interest deduction. Each family with a mortgage pays tax of $1,000 and each family that rents pays tax of $1,000. Total tax revenue raised is $10,000.

    Currently, our income tax system uses option A. Any politician who proposes to end the mortgage interest deduction? Just imagine the TV ads from the opponent. Yet presented with the simple scenario above, can anyone argue that Option A is more “fair” than option B? I’d like to get feedback.

    Posted 2 years ago #         
  2. here we go again with that fair stuff...

    in the interest of fairness, i would like to see a cap on mortgage interest deductions

    but for entry level homeowners, the interest rate deduction is the gateway that qualifies them for other deductions.. such as charitable giving.. and those add up to far more than your $100 example.

    ending that deduction would literally put home ownership out of reach for most entry level buyers.

    and raise their effective taxes since those entry level homes would become rentals whose rates generally include the cost of all taxes paid by the owner...

    owners who would, by the way, be able to deduct the cost of their mortgage interest as a business expense.

    now does that seem fair to you?

    Posted 2 years ago #         
  3. skeeter
    Member Profile

    JoB brings up a valid point about the interest deduction being the gateway to taking itemized deductions in the first place instead of the standard deduction. Lets also assume that none of the 10 families gave even $1 to charity for purposes of this discussion.

    Posted 2 years ago #         
  4. Ending the mortgage deduction would not be the end of the world, even though I've benefitted from it for most of the last 25 years. If it were done away with, though, I would appreciate offsetting "adjustments" (in other words reductions) to my overall tax rate. Also imagine how much homebuilders, mortgage lenders, and related businesses would howl. The only way you could do away with the mortgage deduction, in my opinion, would be as part of overall tax reform -- and you can imagine how easy it would be to reach consensus on that (probably harder even than health care reform).

    Also, the truth is a bit more complex than your scenario. This excerpt from The Economist magazine explains why:

    If you combine tax expenditures and entitlements, America’s efforts at redistribution look even more perverse. The government lavishes more dollars overall on the top fifth of the income distribution than the bottom fifth. As Irwin Garfinkel, Lee Rainwater and Timothy Smeeding point out in “Wealth and Welfare States”, a book comparing America’s safety net with those of other countries, the federal government “spends” four times as much on subsidising housing for the richest 20% of Americans (via the mortgage-interest deduction) than it spends on public housing for the poorest fifth.

    For the full article, see http://www.economist.com/node/21564407

    Posted 2 years ago #         
  5. skeeter..

    " Lets also assume that none of the 10 families gave even $1 to charity for purposes of this discussion. "

    nope. in real life people get to deduct their charitable expenses and medical expenses and who knows what else because their mortgage deduction exceeds the standard deduction..

    it makes a huge difference in real life.

    and skeeter.. that's where most of us live.

    Posted 2 years ago #         
  6. WorldCitizen
    Member Profile

    zgh2676

    Again, the mortgage interest deduction is not fair. Why should you get a tax benefit for buying a home? (For the record, as a homeowner I have taken advantage of this deduction for the last 9 years.)

    In my opinion the only deduction that could be potentially fair is one that applies evenly to everyone. No one should be forced to pay taxes on anything they make below the poverty line. No one. Every other bit of income should be taxed at the same rate. No other deductions what-so-ever. Yeah...pretty much a flat tax.

    That's fair.

    Posted 2 years ago #         
  7. skeeter
    Member Profile

    JoB I'm talking about a hypothetical scenario. I'm not talking about real life. Okay, people give money to charity. Let's assume that charitable and medical expenses are not deductible. I'm trying to isolate how people feel about the mortgage interest deduction.

    Posted 2 years ago #         
  8. skeeter
    Member Profile

    rw you make a good point. The wealthy benefit a great deal more from the deduction (assuming they have a mortgage.) If you are in the top tax rate, the government (other taxpayers) pay 35% of your mortgage. If you are in a more moderate income level, the government (other taxpayers) pay 10% or 15% of your mortgage.

    Posted 2 years ago #         
  9. I think the deduction is a bad idea. First, you're overallocating government resources for "Ownership" as opposed to "Use" - the ownership of 1st and 2nd homes, as opposed to renting.

    Second, you're not really encouraging ownership so much as you're encouraging taking on DEBT. Debt is what's tax favorable, not cash payment. Look at govt's record, how it fared by encouraging indebtness over the last two decades as it directly involved itself in seeking to make debt too easy to get.

    Third, you're artificially propping up higher prices & loan interest than might be gotten without the tax incentive.

    There aren't many reputable economists who think the mortgage interest deduction is a very good idea, but politically it would be hard to remove as the real estate lobby is one of the biggest in Washington DC, representing the home improvement industry, loan-makers & financialization, real estate agents, & the construction industry.

    Why don't we have tax-deductible credit card interest? And, why not have auto loan debt deductions too? If the home mortgage interest deduction is so desirable, why not be more even-handed for the rest of debtors?

    Posted 2 years ago #         
  10. I remember when we used to be able to write off other kinds of interest. I had to look up the year but remember being really mad at Reagan about it because I was trying to save for a down payment on a house here in West Seattle and those revisions made it just a little harder.

    "On Oct. 22, 1986, President Ronald Reagan signed into law the Tax Reform Act of 1986. Reagan called the 829-page, 33-pound bill 'the most
    sweeping overhaul of the tax code in our nation's history.'

    "The new code gradually phased out all deductions for interest paid on car loans, charge-account purchases, vacations and anything else that
    fell under what the law termed 'consumer loans.'

    http://wiki.answers.com/Q/In_what_years_was_credit_card_interest_a_deduction_on_income_taxes

    Posted 2 years ago #         
  11. skeeter
    Member Profile

    Good points Meg. I’ll throw you a little extra piece of information. Canada does not allow a tax deduction for home mortgage interest. Yet Canada has a higher home ownership percentage than the U.S.

    Our country is overdue for a major/fundamental overhaul of the tax code, and I have to think that the elimination of the mortgage interest deduction is on the list of ways to broaden the tax base.

    Posted 2 years ago #         
  12. skeeter..

    why target the only deductions that favor the middle class?

    there's a whole raft of esoteric tax deductions taken by income earners .. as opposed to middle class wage earners... to go after that would generate a whole lot more federal revenue than ending mortgage interest deductions.

    it's odd that i never hear you asking about them.

    btw.. in the interests of disclosure... i have no horse in this race..
    we rent by choice and thus pay the full extent the law allows on hubby's wages.

    Posted 2 years ago #         
  13. kootchman
    Member Profile

    Ahhh... first, evaluate why the government needs the 10K!

    Home deduction hurts the middle class and low income. JoB.. having just come from the car buying experience... ever notice how sales reps focus on how much can you afford a month.. you worked in car sales,... it's the bread and butter.

    Mortgage deduction raise home prices. All the traffic will bear. A builder loves the 30 year mortgage. He can add an extra 125K per house... it adds maybe 150 bucks {probably less} keeping it in the "affordable" range. However... Your ownership is mostly interest expense. That feeds the food chain. Anything that is subsidized increase costs,. because you never encounter "real costs"... It is also anti-conservation. See home mortgages and the prevalence of 30 year mortgages.... it means 2500 square foot homes. I don't care how "green" you are.... or think you are.. if you are an architect designing a 3200 sf home... for a couple and two kids.. you are a resource consuming pig. LEEDS home at 3200 s/f is an oxymoron., Second debt means you never attain a paid asset and defer equity.

    It would be a great boon to low income to eliminate mortgage deductions... housing prices would fall. Affordability. Builder would have to respond. You know in car buying... the longer the fiance terms,,, the less price haggling. Offer cash and you have bargaining power. Deductions for the middle class are for the most part, debt traps. All debt and no equity. You can extend that to student loans,... you all think you are getting favors... you aren't.

    Deduction of mortgage interest was done for the benefit of the real estate and construction industrry... you are the pigeon. Deduction are ways to shield consumers from true cost.. keep you in perpetual debt. It's no favor.

    meg you are dead on.... now extend that to student loans and evey other subsidy.... that which is subsisized willl be over used and over priced...

    Posted 2 years ago #         
  14. kootchman
    Member Profile

    Last thought.. and the greatest beneficiary? Government .. they get to tax on assessed values. The have an interest in overvalued homes. The 40 per cent drop in home prices? That was more reflective of true value... and how did government prop up the local tax base? Cheap ass 30 year loans the throw inflationary costs back into the equation. Suckers.

    Posted 2 years ago #         
  15. redblack
    Member Profile

    redblack

    skeeter: that's a lot of assumptions in your scenario. if life were as rosy in the united states of america as they are in the skeeter states of america, we probably wouldn't need that deduction.

    in the u.s it's more like this:

    one family owns 5 homes, some of which are rented to the renters.

    one family owns one home and has one kid.

    one family owns one home and has four kids.

    one family owns one home and has no kids. (or has a single parent.)

    five families rent homes. two or three of these are single parents.

    one family has no home.

    they all pay different tax rates.

    and that's the point of our tax code. not all money, income, or wealth is created equally. and we have a broad spectrum of incomes and a low GINI index - which might be the understatement of the century.

    cap the mortgage interest deduction at a level that benefits the middle class and encourages home ownership, but is not available to people with five homes.

    Posted 2 years ago #         
  16. kootch..

    let me see if i grasp your argument correctly..

    the mortgage interest deduction hurts middle class buyers because it makes it possible for them to afford a home...

    hmmmm. epic fail.

    it is true that the mortgage deduction was used by some unscrupulous loan brokers as one of many tactics to encourage homebuyers to purchase a mortgage product they couldn't ultimately afford...

    that was fraud...

    and that my friend was the real reason for that 40% reduction in prices you mention...

    which of course wasn't really 40% everywhere...
    but why quibble?

    Posted 2 years ago #         
  17. skeeter
    Member Profile

    Redblack, I am generally against the mortgage deduction. It’s a huge benefit to the wealthy. A small benefit to a portion of the middle class. And a raw deal for those who rent – typically the poor and middle class. It encourages people to buy more expensive homes than they can afford. But I’d be okay with your proposal to only allow it for those earning under a certain cap. That way the benefit could go to the lower earning folks who need help the most, instead of sending the benefit to the wealthiest.

    Now you mentioned the united states of skeeter. Well I need all the deductions I can get. The houses in Seattle, Hawaii, and Florida are underwater. I’m unable to refinance my yacht because credit markets are tight. And now, gosh darn it, the U.S. has discovered my account in Switzerland and wants to talk. It’s been a rough couple years :-)

    Posted 2 years ago #         
  18. redblack
    Member Profile

    redblack

    i didn't mean offense. it was kind of funny how marxist and egalitarian your scenario looked, though. didn't much resemble america, in my opinion.

    i have to take issue, though, with your assumption that people overextend themselves simply so they can get a bigger deduction on home ownership.

    sometimes people are sold more than they can afford because a realtor or a banker are going to make more profit.

    sometimes they just want more than they can afford out of envy, or out of a belief that they can climb the ladder faster than reality will allow.

    it's human nature.

    Posted 2 years ago #         
  19. skeeter
    Member Profile

    No worries Redblack. In my attempt to isolate one issue, the mortgage interest deduction, I put too many assumptions into the scenario.

    Agreed on the human nature part.

    Posted 2 years ago #         
  20. kootchman
    Member Profile

    No JoB... deductions raise prices of homes. You are deducting some of the expense of the debt. You don't understand affordability. In 7 years... who has more wealth... a 15 year mortgage or a 30 year mortgage holder? It's that simple.

    Second, government benefits greatly, they too are a winner. The more inflated house prices are... the more local property taxes you pay, which are not deductible.

    Redblack... uh.. you don't get mortgage deductions on five homes... just two. The other three are non deductible. I took a mortgage deduction on my boat... as a secondary residence. That was made available when Jimmy Carter levied a luxury tax on boats... remember that? Half the boat manufacturing businesses collapsed putting hundreds of thousands of folks out of work. So to get us to buy boats, if you had a kitchen, bath, and sleeping berths... you got a second home mortgage. The list of venerable boat manufacturers that went out of business in WA alone was large indeed. Good union jobs...too! Cabinet makers, shipfitters, pipefitters, material suppliers. Boy he sure stuck it to the top 1 per cent!

    JoB... inventing 30 year debt is not a favor. It just gives you debt. I know Democrats can't fathom the concept that debt is not a good thing... it's how they run the world.. borrow, borrow, borrow... jeesh.. maybe they could have put that extra 15 years of debt service to.... college educations? Catastrophic health insurance? That's why this recession hurt so deeply.. there was no equity ... just debt.

    what's this "they were sold more home than they could afford".. no they bought more home than they could afford. If you are too flippin stupid to understand what you are buying.. you shouldn't be buying. Why is too much debt load someone elses fault? If you can't carry it.. don't pick it up. You can' shield people from bad decisions that they want to make.. eh?

    Posted 2 years ago #         
  21. kootch

    "No JoB... deductions raise prices of homes."

    no kootch.
    demand raises the price of houses.

    but you are right, you do get to deduct some of the expense... of carrying a mortgage

    as for not deducting the mortgage expense on four or five homes...

    that does depend on whether you carry any of those homes as a business expense, doesn't it?
    because if you do.. you do deduct the cost of that mortgage as an expense.

    "Second, government benefits greatly, they too are a winner. The more inflated house prices are... the more local property taxes you pay, which are not deductible."

    No kootch..
    last time we filed long form because we had a mortgage I am thinking we deducted our property taxes .. on the house and on the car.

    We were in Minnesota where we paid property tax on our cars as part of our registration.

    "JoB... inventing 30 year debt is not a favor. It just gives you debt."

    No kootch..

    In the first place no-one thinks that 30 years of debt is any kind of favor..
    especially not those who pay their mortgages whether their homes are "under water" or not.

    but paying a mortgage does buy you more than just debt.

    it buys you security. As long as you pay your mortgage you can't be easily evicted from your home.

    it buys you the ability to customize the property you live in without asking permission from your landlord.

    it buys you stability ... a stable school system for your children and a stable community for your family.

    it buys you respect when dealing with anyone in the financial community.

    it buys you better rates when you need to borrow.

    it buys you an asset that is possible to borrow against if you need to do so.

    it buys you a plot of earth to call your own.. and to garden as your own..

    that's the short list...

    it also buys you maintenance costs and taxes and obligations and ....

    "what's this "they were sold more home than they could afford".."

    did i say this? I don't remember it and i am not going to go look.

    I know i did say that a mortgage deduction was used by some salespeople to sell more mortgage than could be afforded.

    Those same sales people used escalating "variable interest" loans to do the same thing... often when a flat rate interest loan could have been afforded.

    This notion that if you can cheat someone they deserve to be cheated has been carried way too far and used by far too many as an excuse to commit fraudulent acts.

    I would remind you that individual mortgage holders didn't bundle their "bad" paper and sell it to our pension funds... the fellas that created the "bad" paper did that.

    Posted 2 years ago #         
  22. skeeter
    Member Profile

    Just to clarify, property taxes on your home are tax deductible, just like the mortgage interest.

    Posted 2 years ago #         
  23. kootchman
    Member Profile

    My Gott!

    "no kootch.
    demand raises the price of houses.

    And what happens when you lower credit rates? Demand improves. Your man just gave us 5 trillion in deficits and printed 8 trillion in Obamabucks.. to do what? Stimulate demand.

    So his whole economic "theory" was a bust then? Want some proof.... every economist said it... we had no national savings rate, we had no personal capital .. we were in DEBT... and as we are getting put on a forced debt shedding load.. prices have NOT come down in basic commodities because the dollar value is sinking .. inflation does that.

    Subsidy increases prices... subsidy increases prices... it's a rock solid bet. That's why you even have 30 year mortgages. Remember the 25 year Japanese real estate crash? The ringing bell was.... 50 year mortgages. Skeeter... AMT.

    Your pension fund managers didn't do due diligence. Admittedly... but the "bad paper" mixed with good paper is the rock upon which the CRA was built.

    How many people COULD borrow against their home? 60 per cent of homes were overvalued and they were all debt no equity. You know who is buying all that "bad" paper now? Your US Treasury is... taking it off the hands of FHA and putting it in your SS fund... very comforting. That was part of QE3... if it was bad then it is bad now.

    Posted 2 years ago #         
  24. Kootch

    "And what happens when you lower credit rates? Demand improves."

    the ability to purchase improves, that's for sure.
    but without the ability to finance and repay those mortgages,
    lowering the interest rate alone does not stimulate demand...

    what stimulates demand is income.

    "Your pension fund managers didn't do due diligence. Admittedly... but the "bad paper" mixed with good paper is the rock upon which the CRA was built."

    again.. if the sucker will buy it.. it's their fault.

    what about the fellas who packaged and rated those mortgages as secure investments?

    where exactly do you see their role in all of this kootch? You seem to have a total inability to hold those who actually committed fraudulent acts accountable.

    Why is that?

    Posted 2 years ago #         
  25. kootchman
    Member Profile

    Because I don't expect the world to be my babysitter? We did hold Franklin Raines accountable.. I don't know why Obama hasn't pursued a fraud case. I suspect the Wall Street watchman in the DoJ.. lowering interest rates JoB .. like selling cars... all they are looking for is your ability to make payments. Same car, same price, a 7 year loan may get you in the car, a 3 year loan might not. So, you pay more for the car in the long run. That stimulates demand because if 7 year loans were not available... no loan, no sale, no demand.

    Now, get in a car wreck. Say, after a year of ownership... your now "used car" is paid off at book value. Ooops.. you still owe money. That's what happened. A speculative housing bubble burst... and millions were underwater. Luckily, though your credit is trashed.. your loan was secured by real property... if you default. On a consumer loan, you still owe.

    Proof? 300K home at 15 years vs 30 years at 7% ..... the difference in monthly payments, abillity to service the debt is what counts. There are more buyers eligible to buy with 30 year mortgages than 15 year mortgages, That's why they have them... to stimulate home ownership.

    Good heavens the worlds largest holder of home mortgages didn't bother to audit the value of the portfolios and bundles they were purchasing? Of course not.. they didn't have to. They had the full faith and credit of a taxling and borrowing government to backstop them. If Wall Street had no place to sell their bundled products... they wouldn't have created them. But they sure found willing customers didn't they.

    If you don't understand what you are buying and you hold trillions of those products... shame on you. It's not like they were selling MBS to individual retail consumers. They were selling to very very very big boys and national banks. No audits of bundles? Two parties to the collusion. Congress didn't want to know what they were buying.

    Mortgages deductions simply put, are subsidies to make debt "affordable" and switch some of the debt burden to the taxpayers.

    Posted 2 years ago #         
  26. kootch..

    thsoe who were selling that product understood full well exactly what they were selling...
    and the large financial institutions knew exactly what they were buying...

    but
    " They had the full faith and credit of a taxling and borrowing government to backstop them."

    Those they sold the fraudulent product to not only didn't know what they were buying but they didn't have the full faith and credit of their government to back them up, did they?

    Yet you think the guys who did what they knew was wrong because it would make them money and they knew their backsides were covered aren't the real problem.. the suckers are?

    something is very wrong with your priorities kootch..
    not to mention your sense of right and wrong

    that argument sort of reminds me of the one that men who battered women used to use..
    if she wasn't so willing to be beaten i couldn't beat her :(

    Posted 2 years ago #         
  27. redblack
    Member Profile

    redblack

    ko0o0tch:

    Redblack... uh.. you don't get mortgage deductions on five homes... just two. The other three are non deductible.

    my bad.

    Posted 2 years ago #         
  28. redblack..

    but not if you rent them even as a vacation rental one time a year..then your mortgage interest is an expense..

    yes.. i do know people who do that

    Posted 2 years ago #         
  29. redblack
    Member Profile

    redblack

    jo:

    check the calibrations on your sarcasm detector.

    :)

    Posted 2 years ago #         
  30. redblack..
    what sarcasm detector?
    I am not up to my usual rambunctious self lately:(

    Posted 2 years ago #         
  31. kgdlg..

    pretty basic stuff really..

    " people who have more money are more likely to have expensive homes and bigger mortgages. They may also have second homes, and under the current rules, mortgage interest may be deducted on those as well, up to a cap of $1 million in debt.

    The other factor is that the value of the subsidy increases along with your tax bracket.

    For households in the 15 percent bracket, the tax benefit for every $1,000 of mortgage interest deducted is $150. That benefit rises to $350 for households in the 35 percent tax bracket. "

    of course the mortgage deduction is worth more to those who are making more...
    but the assumption is that the mortgage deduction stands alone.. the truth is that it is the gateway deduction to those homeowners with lower incomes.

    Posted 2 years ago #         
  32. kootchman
    Member Profile

    Good consumer..JoB... you get $150 back to assume a 1000 debt... bankers love ya... home builders love ya... property tax levies love ya...

    I'll make is simple for ya... shit happens. two familes buy a 400K house.. one takes out a 15 year 20 per cent down loan. Second one, takes out a zero down, 30 year mortgage... in year 7 catastrophe hits.. better job comes along, yo need some equity to finance a business....

    Who has access to a tangible asset that can be converted to cash? How much? End of lesson. Your debt to asset ratio makes sure you never get to the starting line .. let alone win the race. Curious.. how much interest expense will the two incur? And how much tax offset do they get.. effectively? Whoa ... you got nothing. You haven't made a dent in the principal... all you did was pay interest expense.

    Posted 2 years ago #         
  33. kootch..

    you scenario kind of overlooks the folks who bought their homes when prices weren't inflated but interest rates were, invested in them, paid off their investments and when they are ready to downsize suddenly find the home they have spent a lifetime paying for and upgrading isn't worth much more than it was when they bought it...

    i wonder why you don't talk about people like that kootch?

    don't those folks fit your irresponsible consumer responsible for overloading our economy model?

    Posted 2 years ago #         
  34. kootchman
    Member Profile

    Better reason yet to get debt paid off as fast as possible. I held on to one property as a rental for 7 years, with a positive cash flow, and sold when the bubble started to rise... a bubble created by lowered credit standards. Like I have said over, and over, and over again... ANYTHING you buy and hold with the expectation that it will rise in value is NOT an investment, it is speculation. See, holding things that are in demand, that have limited supply, are good speculative chances. See comercial zoning? Demand, limited supply by zoning.... in the long term, a better investment than single family homes.. which are not so limited in supply. 401K's are built on speculation.. rising stock prices. See how much they fluctuate? Your 401K purchases stock not for dividends.. but market prices.. volatility.

    Posted 2 years ago #         
  35. kootch..

    God knows.. someone has to stand up for the shysters...
    the freedom to fleece others must be there in the constitution...
    i can't wait for you to point it out to me.

    Posted 2 years ago #         
  36. kootchman
    Member Profile

    Look. this is as simple as it gets. When the CRA was full blown... Fannie Mae pioneered mortgage backed securities. Banks were encourage to make sub prime loans with the assurance that Fannie was going to buy them and "bundle" them with good loans. That pointed the way. It was the guiding light. Banks sold those crap assets to Fannie, and went one better. If there was a market for them.. well,hell.. sell em' around the world... and buy insurance so that if they did go to hell... enter credit default swaps. Your government was the shyster... we are trying to stand up against it.

    Posted 2 years ago #         
  37. I would gladly give up my home deduction so that there could be a reduced section 8 waiting list. Give the housing assistance to those that really need it.

    Posted 2 years ago #         
  38. kootchman
    Member Profile

    I wouldn't. This "war on poverty" if 50 years old. We have more poverty. We aren't winning. We have a 40 year old Department of Education, with 40 successive years of decline in international standings... we have a government directing national housing policy, and we had a collapse of monumental proportions. Yet.. to my utter amazement, Section 8 is the solution? ANOTHER beef up of another government program. I am leery. I prefer to give my money directly to non government charity and let them develop housing for those that need it. They do a better job.

    Posted 2 years ago #         
  39. "Gubmint baaaaaaadddddd!"

    Posted 2 years ago #         
  40. Well the real war on poverty pretty much ended with reagan, so not sure it is fair to say it has failed when it was so radically dismantled over time.

    I am one of those nonprofit builders of affordable housing, and it would not be possible without the low income housing tax credit and other subsidy. And yet, the need is so great still, especially for seniors and disabled.

    So yeah, I would argue that vouchers are one of the most successful entitlement programs because they directly impact a market failure (the mismatch between rental costs and income). It makes no sense to me to have. 6 year long section 8 wait lists with 25k people on it when I get a deduction for owning a home. Priorities.

    Posted 2 years ago #         
  41. kgdlg..

    it is all about priorities, isn't it.

    Posted 2 years ago #         
  42. kootch..

    our government didn't promote lending money at the highest return possible to the brokers and lending institutions and then turn around and package loans they knew they wouldn't be holding the paper on when they failed as secure investments...

    our financial institutions did that.

    did the government change the laws that once kept that from happening. Yup, they did.

    You can thank a republican congress for that even though you blame the democratic president who signed the law they crafted...

    but our government did not require those financial institutions to abuse the latitude they were given.. they did that all by themselves because it was profitable.

    they are still doing it because it is profitable.. and will continue to do so until laws are passed that prevent them or until they are all thrown in jail.

    personally, i would like to see those who have profited the most prosecuted for the fraud they perpetrated.

    I think a few of the largest profiteers losing the fruits of their criminal enterprises just might be the example it would take to make those who are still intentionally defrauding others question whether or not the personal risk is worth their ill-gotten gains.

    Posted 2 years ago #         
  43. redblack
    Member Profile

    redblack

    kootch: just 'cause i'm out of town doesn't mean you can start peddling that fannie mae story again. this ain't CNBC, you ain't kudlow, and i'm keeping an eye on you from afar. all of your b.s. will be answered when i get home. :)

    for anyone who wants to do his or her own research on how full of shite koo00tch is regarding mortgage backed securities and who was really peddling that bad paper and why, search for the following terms:

    - tax reform act of 1986

    - REMIC

    - graham-leach-bliley

    - countrywide

    MBS were, indeed, pioneered by fannie, but they were changed and used by wall street to get their hands on americans' interest payments.

    the only way in which government was involved in the financial collapse was through republican deregulation.

    by the way, the ignorant among us can continue to blame the socialist u.s. government. but i'd like to remind them who was there with a check in hand when wall street had to admit they blew a trillion dollar hole in the economy. and that was just the damage above the water line. it got much worse, but the liberal media decided to bury that story for the people who actually own the liberal media.

    and kootchman knows it. he just enjoys "stirring the pot."

    Posted 2 years ago #         
  44. hooper1961
    Member Profile

    simplify the tax code and get rid of it. this should make JoB happy since the biggest beneficiaries of this deduction are people who own expensive homes.

    Posted 1 year ago #         
  45. redblack
    Member Profile

    redblack

    yeah, but for those of us who don't own five houses, it's the only deduction we get that matters.

    personally, i could survive if it went away. but i know that millions of other homeowners couldn't.

    like i said, eliminate it for more than one home, and over a certain threshold.

    and, sorry, hooper. we're not going to flatten the tax code. people in this country make money a myriad of ways and our tax code needs to reflect that. and it needs to ensure that everyone pays his fair share.

    all of that flat tax talk benefits people at the top, and it will make it easier for them to hide money from the IRS.

    why are you helping them?

    Posted 1 year ago #         
  46. hoo[..

    you have just proven beyond a shadow of a doubt that you don't really read my posts...

    if you did, you would know that eliminating the mortgage deduction will not make me happy...

    nor will a unilateral flat tax....

    eliminating the distinction between earned income and investment income would make me happy...

    tightening up the ability to abuse business deductions would make me happy...

    capping the mortgage deduction would make me happy.. that would affect only the fat cats....

    but eliminating the mortgage deduction would not make me happy

    Posted 1 year ago #         
  47. hooper1961
    Member Profile

    redblack i never said anything regarding flattening the tax code.

    JoB - eliminating the mortgage deduction would raise revenue primarily from more affluent people!

    Simplifying the tax code by getting rid of deductions/exemptions makes sense, however adversely affect accountants who would have less work.

    Posted 1 year ago #         
  48. hoop

    eliminating the mortgage deduction would ensure that those who work for a living wouldn't get any deductions since the mortgage deduction is the gateway deduction....

    while those who don't would.

    why on earth would you want to take more money out of the pockets of actual consumers?

    Posted 1 year ago #         
  49. hooper1961
    Member Profile

    JoB

    for once I will go to your left - what about the millions of renter's that get no deductions!

    the mortgage interest deduction by far favors owners of expensive homes.

    Posted 1 year ago #         

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