Obama Panel Eyes killing Mortgage Tax Breaks

[nonlnear]

Okay back on topic. I didn't see anyone here finding the elimination of the mortgage interest deduction being politically feasible. Attempting to eliminate it would be like health care reform all over again. The number of big money, well organized special interest groups that would work to stop the abolition of the deduction would be enormous and they wouldn't have to work very hard to prevail. There is nothing to be gained politically from ending the deduction. The only way I see this particular deduction going away is via a complete overhaul of the income tax system <insert favorite replacement scheme here>. Replacing the interest deduction with a "payment of principal" type tax break sounds good but the benefit would kick in toward the end of a mortgage whereas the interest deduction applies upfront. With Americans moving every six years on average a principal payment deduction replacement would be a hard sell.

Reread my response to Fern's objection that a principal deduction would be back-loaded. It only "kicks in toward the end of a mortgage" for people who strain their budget to the point that they can only afford to pay the required payment. However for people who leave themselves more room in their budget to pay extra, there is an incredibly flexible tax shelter available. You can reduce your taxable income by as much as you want by paying down your mortgage. Think about how that would change people's attitudes towards their mortgage debt once the public figured out how the new system worked. You would see people getting into homes with lower payments, and saving aggressively.

 

[werepossum]

A *LOT* of people aren't that disciplined. :thumbsup:

Congratulations. 🙂 Seriously. :thumbsup:

Thanks! Sometimes I look at our house and then at those so much nicer, and I want one! Then I remember having a house payment and I'm all better.

I had a coworker who took a 30 year mortgage at 65, then retired at 66. I can't even imagine facing a house payment, even a modest one, on Social Security. Yet I have neighbors who have owned their homes as long as have I who have repeatedly taken out home equity loans. Yes, their houses are a bit nicer than mine - but the banks own them.

 

[ShawnD1]

I had a coworker who took a 30 year mortgage at 65, then retired at 66. I can't even imagine facing a house payment, even a modest one, on Social Security.

(hopefully) that's not his plan at all. Here's how it works:

Your friend obviously doesn't expect to pay until he's 95; he expects to die. What you do is borrow way more money than you want, then use the extra money to pay back the loan. For example, say I borrow $200,000. $100,000 of that is used to buy things. The other $100,000 is used to make the monthly payments until you die.

That's actually how my emergency backup plan works. I have my emergency savings in case of job loss or acts of god, but I also have a line of credit. If the shit really hits the fan, I can borrow money then use the borrowed money to make the payments on that borrowed money. It's not free money, but it buys time. Instead of running out of money after 6 months of unemployment or whatever, floating on a low interest loan and using that loan to make payments on the loan might give me 1-2 years of space before bankruptcy hits. It's good to plan way ahead 🙂

 

[werepossum]

(hopefully) that's not his plan at all. Here's how it works:

Your friend obviously doesn't expect to pay until he's 95; he expects to die. What you do is borrow way more money than you want, then use the extra money to pay back the loan. For example, say I borrow $200,000. $100,000 of that is used to buy things. The other $100,000 is used to make the monthly payments until you die.

That's actually how my emergency backup plan works. I have my emergency savings in case of job loss or acts of god, but I also have a line of credit. If the shit really hits the fan, I can borrow money then use the borrowed money to make the payments on that borrowed money. It's not free money, but it buys time. Instead of running out of money after 6 months of unemployment or whatever, floating on a low interest loan and using that loan to make payments on the loan might give me 1-2 years of space before bankruptcy hits. It's good to plan way ahead 🙂

LOL Actually he bought a HUD repo for about $40K, with about $10K to make needed repairs (VA loan), so his payments are pretty modest. The house is probably worth about $80K to $100K after the repairs, which he did himself. He has the money in retirement to pay it off, but he chose to invest that money in the stock market. Personally I'd be a nervous wreck, I'd always choose a guaranteed tax free 4.5% return and a place to live over the dubious promise of a greater return, but that's just me.

I realize that to a lot of people a $40K or even $100K house sounds like a condemned doghouse that is actually burning during the bid, but in rural North Georgia this is actually a pretty good house - 3 BR, 2B, garage, brick front, hardwood floors, central heat and air. In a decent neighborhood in Los Angeles this house would run roughly a million easily.

 

[MooseNSquirrel]

We've been spending like drunken sailors the last few years and have had no appreciable tax increases...so yeah, I'm sure it's really fun for you when your "reality" is defined by such bullshit. 🙄

I know its a stretch for you, but try and appreciate the difference between deficit spending out of a recession and off the books wars and permanent unfunded liabilities with no provision for funding them.

 

[Fingolfin269]

When you leave your parents basement, you'll find out there is this thing called money.

I haven't been under my parent's roof in over a decade and actually pay taxes... which is why I don't want my taxes to increase. I find it strange that any middle class tax payer would voluntarily sign up for more taxation. It just doesn't compute for me.

 

[Pulsar]

It's humorous how the ones who like to equate Obama/Democrats with Socialism are criticizing this. It's both the Fiscally responsible thing to do and is eliminating a Subsidy Program that's far closer to Socialism than the Free Market.

The middle class, usually the ones with children, are the people who make enough to itemize and deduct their mortgage interest.

The rich usually don't, and the poor generally don't have a mortgage or a house.

This is a direct attack on the middle class. Those people whom the democrats have complained about getting screwed with the bush tax breaks that are sunsetting.

Between the Bush tax breaks (specifically the children deduction) and this change, I could see approximately $4,000 increase in taxes on my single-income under-$80k household of 5. Well under the $250k that was promised.

Change? Hope? Shove it up your ass Mr. Democrat. If you can't see why you're getting thrown out of office, I have to wonder how you even manage to write your name without screwing it up.

 

[Pulsar]

I'm not sure what point you are trying to make, but it doesn't seem to be related to what I said.

I'll sum it up: house buyers have an unfair advantage over renters.

Also, in large markets renting is generally more expensive than buying.

*choke*

What?

So making it easier to purchase a house by having deductions is unfair to renters?

Promoting social change through monetary policy is unfair? That has long been a tenet of the democrat party.

Holy SHIT. You're right! Let's get rid of every social plan under that guise! Welfare is clearly unfair to people who work.

 

[sandorski]

The middle class, usually the ones with children, are the people who make enough to itemize and deduct their mortgage interest.

The rich usually don't, and the poor generally don't have a mortgage or a house.

This is a direct attack on the middle class. Those people whom the democrats have complained about getting screwed with the bush tax breaks that are sunsetting.

Between the Bush tax breaks (specifically the children deduction) and this change, I could see approximately $4,000 increase in taxes on my single-income under-$80k household of 5. Well under the $250k that was promised.

Change? Hope? Shove it up your ass Mr. Democrat. If you can't see why you're getting thrown out of office, I have to wonder how you even manage to write your name without screwing it up.

wut? Come on already.

 

[techs]

Seriously, THIS is the kind of stuff that kept me from supporting Obama.

I never thought he had the love for this country, or the political balls to actually tackle tough problems.

But he is doing it. Instead of bullshit tea bagger and Republican let's make the tax cuts permanent, but we're still going to reduce the deficit LIES and BULLSHIT, Obama has put everything on the table in an effort to save this country.

It's not going to work. Promising tax cuts and borrowing money from China wins elections for Republicans and they will continue to win elections until the US economy crashes and burns.

BUT Obama is acting in the best interests of the country.

Hurrah.

 

[her209]

I haven't been under my parent's roof in over a decade and actually pay taxes... which is why I don't want my taxes to increase. I find it strange that any middle class tax payer would voluntarily sign up for more taxation. It just doesn't compute for me.

I find it strange that any middle class tax payer would voluntarily sign up to pay money to one party so that they can get a smaller portion back from another party. It just doesn't compute for me.

 

[Fingolfin269]

I find it strange that any middle class tax payer would voluntarily sign up to pay money to one party so that they can get a smaller portion back from another party. It just doesn't compute for me.

Do you think this is a party stance? Is it really that hard for you to believe that there are people in the world who are neither Democrat nor Republican? I couldn't care less about either one of your parties.

This is about my refusal to be okay with increased taxation, as said in the original post. How anyone who is actually middle class and paying taxes can actually be okay with being taxed more just doesn't make sense to me. Perhaps you can explain why I should be okay with it instead of hiding behind some random ass party line drive-by post.

 

[ShawnD1]

This is about my refusal to be okay with increased taxation, as said in the original post. How anyone who is actually middle class and paying taxes can actually be okay with being taxed more just doesn't make sense to me. Perhaps you can explain why I should be okay with it instead of hiding behind some random ass party line drive-by post.

We've repeatedly tried to explain to you and others how important it is to pay back debts and have a balanced budget, but your response above was basically "la la la la la I'm not listening I live in my parents basement they pay my rent la la la"

 

[Doc Savage Fan]

I know its a stretch for you, but try and appreciate the difference between deficit spending out of a recession and off the books wars and permanent unfunded liabilities with no provision for funding them.

4 years control of Congress with the last 2 years controlling both the Legislative and Executive branches...tell me this, exactly what have has the "Party of Fiscal Responsibility" done to address deficit spending, spending on two wars, and permanent unfunded liabilities with no provision for funding them? I'm all ears.

 

[ShawnD1]

4 years control of Congress with the last 2 years controlling both the Legislative and Executive branches...tell me this, exactly what have has the "Party of Fiscal Responsibility" done to address deficit spending, spending on two wars, and permanent unfunded liabilities with no provision for funding them? I'm all ears.

Getting yalls to understand that Bush started it is clearly more important than fixing it and taking credit for fixing it 😉

 

[werepossum]

I find it strange that any middle class tax payer would voluntarily sign up to pay money to one party so that they can get a smaller portion back from another party. It just doesn't compute for me.

It certainly doesn't make sense. I strongly suspect that most people who buy houses don't do it for the tax breaks, but for some other, ulterior motive.

/sarcasm

 

[Scotteq]

I find it strange that any middle class tax payer would voluntarily sign up to pay money to one party so that they can get a smaller portion back from another party. It just doesn't compute for me.

...because Neither Party is looking out for me; and yet they *both* have their hands in my wallet. ALL of them are taking ever more, and returning ever less.

 

[Scotteq]

It certainly doesn't make sense. I strongly suspect that most people who buy houses don't do it for the tax breaks, but for some other, ulterior motive.

/sarcasm

God Forbid you pay {$2,000 a month} for 15, or 20, or 30 years, and expect to actually have somethng to show for it.

 

[MooseNSquirrel]

4 years control of Congress with the last 2 years controlling both the Legislative and Executive branches...tell me this, exactly what have has the "Party of Fiscal Responsibility" done to address deficit spending, spending on two wars, and permanent unfunded liabilities with no provision for funding them? I'm all ears.

You can't just pull a switch on 2 wars and a public largesse which affects retired folks. You are not that dense...I hope.

Getting yalls to understand that Bush started it is clearly more important than fixing it and taking credit for fixing it 😉

But you don't understand the root causes of many issues, which puts one in a poor position to critique.


A hack is a hack.

 

[Doc Savage Fan]

You can't just pull a switch on 2 wars and a public largesse which affects retired folks. You are not that dense...I hope.

Please stop the bullshit and answer my question....or is that a stretch for you?

 

[ShawnD1]

You can't just pull a switch on 2 wars and a public largesse which affects retired folks. You are not that dense...I hope.

USA-Vietnam war. USSR-Afghanistan war.

Obviously the issue with Iraq is that it has oil and that's why the troops can't just leave that shit hole. No problem. Put US troops around the oil fields to secure those. Much of the other troops can be removed. Obama increasing the troop surge isn't helping the budget situation.

 

[her209]

It certainly doesn't make sense. I strongly suspect that most people who buy houses don't do it for the tax breaks, but for some other, ulterior motive.

/sarcasm

I suspect you're right.

😀

 

[Acanthus]

The middle class, usually the ones with children, are the people who make enough to itemize and deduct their mortgage interest.

The rich usually don't, and the poor generally don't have a mortgage or a house.

This is a direct attack on the middle class. Those people whom the democrats have complained about getting screwed with the bush tax breaks that are sunsetting.

Between the Bush tax breaks (specifically the children deduction) and this change, I could see approximately $4,000 increase in taxes on my single-income under-$80k household of 5. Well under the $250k that was promised.

Change? Hope? Shove it up your ass Mr. Democrat. If you can't see why you're getting thrown out of office, I have to wonder how you even manage to write your name without screwing it up.

The wealthy do it too, unless they pay cash for a $15m house.

 

[SagaLore]

I think we need to incorporate the United States Government and open up IPO to the world. :\

 

[Scotteq]

The wealthy do it too, unless they pay cash for a $15m house.

Helps to actually read the IRS documents, or you'd know that one no longer qualifys for the tax break once the value of the house exceeds $1M. You know - Rather than $15M. Might be a matter of semantics in some parts of the country, but where I live in NJ it's difficult to touch a house for less than $400K. And therefore the middle class *does* get hurt, since by definition they represent the average.

Average Home Prices (by County) in NJ: http://www.trulia.com/home_prices/New_Jersey/



But these are little facts that fly in the face of those who would opine this doesn't somehow hurt the middle class, but rather is a way to penalize the Rich.