White House wants to keep mortgage-interest deduction

Discussion in 'Politics, Religion, Social Issues' started by rdowns, Sep 28, 2012.

  1. rdowns macrumors Penryn

    rdowns

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    #1
    Seems we'll never get anything meaningful until we crash and burn. Come on here, if eliminating the mortgage interest deduction can shave $1 trillion from the deficit over 10 years, it should go. With an average deduction of $559, I think homeowners can deal with a paycheck $23 lighter every two weeks.

    Sure, there are plenty of other areas but this seems like one that should be a no brainer.


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  2. NT1440 macrumors G4

    NT1440

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    #2
    Sadly, thats the political reality right now. It doesnt matter at all that this administration has cut taxes, all that matters is the GOP will go ******* on him 2 months before the election if this stance is changed.

    It's a sad state of affairs.
     
  3. citizenzen macrumors 65816

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    #3
    I say let it go.

    I'm not getting any savings off it any way.

    And after all, it's all about me, isn't it?

    ;)
     
  4. mcrain macrumors 68000

    mcrain

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    #4
    You can still eliminate the mortgage deduction for those who make over $250,000.
     
  5. rdowns thread starter macrumors Penryn

    rdowns

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    #5
    Yeah, loads of savings there. :rolleyes:

    I'll quote the relevant portion again.

     
  6. Rodimus Prime macrumors G4

    Rodimus Prime

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    #6
    there are better ones to go after. Close all the loop holes the 1 mil plus people are busing first and those tax breaks before moving down to one most Americans get.
     
  7. rdowns thread starter macrumors Penryn

    rdowns

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    #7
    Of course there need to be others. Got any that will save us $1 trillion over 10 years?
     
  8. NT1440 macrumors G4

    NT1440

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    #8
    We could stop being so damn war hungry.
     
  9. rdowns thread starter macrumors Penryn

    rdowns

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    #9
    No argument here.
     
  10. Rodimus Prime macrumors G4

    Rodimus Prime

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    #10
    Cut back on wars, Close loop holes abused by people like Rodmey.
     
  11. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #11
    Im not sure why taxpayers would subsidize home owners. I don't think renters get any breaks like this.
     
  12. rdowns thread starter macrumors Penryn

    rdowns

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    #12

    Excellent, that's 3. What else we got?
     
  13. NT1440 macrumors G4

    NT1440

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    #13
    That's actually an excellent point Zombie.
     
  14. Mac'nCheese macrumors 68030

    Mac'nCheese

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    #14
    I think the idea behind giving tax deductions to home owners is to spur the economy by encouraging people to buy their own homes. Not sure if it works...
     
  15. NT1440 macrumors G4

    NT1440

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    #15
    When the market is already desperate for homeowners (look how low interest rates are), piling on does nothing but create the atmosphere for what?

    Yet. Another. Housing. Bubble.
     
  16. citizenzen macrumors 65816

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    #16
    In California, renters get a tax credit on their state taxes.

    Just an FYI.

    ----------

    From the 'pedia ...

     
  17. blackfox macrumors 65816

    blackfox

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    #17
    Well, in the lead up to the Election where many voters are primarily concerned about Taxes and the Economy in a self-centered way - this makes sense politically.

    If Obama wins re-election, he is free to change course, and since he's not running in 2016, he very well might.
     
  18. Ugg macrumors 68000

    Ugg

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    #18
    Hmmm, I'm torn on this one. I think homeownership is generally a good thing, but the MID is too big of a gift. I think something like a one time only deal on a first home purchase with a five or perhaps ten year limit would be ok. But, at the same time, the MID helps people overextend themselves which is a bad thing. It does help lower and moderate income be able to afford a home but it also encourages the conversion of low income housing to upper income housing.

    I think the second home deduction needs to be eliminated. There's simply no reason for it.
     
  19. Happybunny, Sep 29, 2012
    Last edited: Sep 29, 2012

    Happybunny macrumors 68000

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    #19
    If the system is anything like the Netherlands this is a bad thing long term.



    The Dutch system is currently one of the most generous in Europe, with interest fully deductible for 30 years. The central bank, financial services watchdog and other bodies have called for change, arguing the collective Dutch mortgage debt makes the economy vulnerable.
    The tax break on mortgages should be phased out gradually over 30 years, rather than scrapped for some new mortgages, according to recommendations drawn up by home owners lobby group VEH, housing corporations and tenants' groups.
    In addition, social housing rents should rise in line with inflation plus two percentage points on an annual basis, the organisations say in a report on how to kick-start the housing market.


    One of the side effects was that nobody paid off their mortgage, they only paid the interest which was tax deductible. Over the years this has become the norm, and many house owners now count on this money as part of their income.
     
  20. rdowns thread starter macrumors Penryn

    rdowns

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    #20
    I don't see it as helping home ownership. It's a lousy $23 per paycheck deduction. I know if I could get another $23 in take home pay, I'd buy a nicer house. :rolleyes:
     
  21. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #21
    That's 23 dollars more than a renter gets per paycheck, does this interest deduction apply to someone who has 2 or 3 houses? One could argue that someone who rents needs the leg up more than someone who can afford a mortgage on a house.
     
  22. NickZac macrumors 68000

    NickZac

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    #22
    Absolutely. Not only would staying out of other countries' business save trillions, but it would also make us more liked in the international community.
     
  23. Rodimus Prime macrumors G4

    Rodimus Prime

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    #23
    I believe it only applies to one house and it must be primary residents
     
  24. thewitt macrumors 68020

    thewitt

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    #24
    All tax deductions are there to drive behavior, not to benefit the tax payer.

    Eliminate them all.

    Go to a flat tax for everyone earning more than 15k a year.

    Stop taxing income twice.

    The government loses its control on behavior, however revenues go up.

    It will never happen.

    The reason there s a mortgage tax break is to allow people to afford to buy homes. Home construction drives a large segment of the economy. New housing starts has always been a key economic indicator, and rightly so.

    I'm all for taking away every tax incentive and "loophole" as the uneducated scream, for everyone. Just tax everyone as well.

    All businesses - including churches and non profits as well - should also pay a flat tax on income.

    Knock off all the games the government plays to drive behavior.

    It will never happen of course. Money is THE best way to make people do what you want, and politicians know this better than anyone.

    When you see a politician talk about raising taxes, its going to change behavior. Pay attention. There will be side effects that you won't likely appreciate.
     
  25. Happybunny macrumors 68000

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    #25
    $23 wouldn't make that much of a problem.
    The original idea to make interest payments tax de-duct able, was so people with a small income could buy a house.
    The problem here in the Netherlands was that because the full amount of interest was de-duct able, the rebate was quickly in the 250 to 400 per month.
    Nobody paid any of the loan back they paid only the interest due, this was by 2007 so common there were special mortgage contracts.
    This gravy train was so important to a large number of voters, from all political parties, that it became untouchable.

    It was only with this last crisis that there is now talk about changing the tax system.
     

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