Comments on: Scrap the mortgage deduction? Americans weigh in Fri, 05 Dec 2014 11:27:18 +0000 hourly 1 By: limapie Sun, 14 Aug 2011 10:15:42 +0000 I think psychologically eliminating the mortgage deduction would totally depress a nation.

Owning is a dream that people have. They save for it.
They work at owning. They sacrifice.
This deduction is like a reward.
It is a way to feel progressive.
Taking it away, and you’ve attacked
the one last perk in life.
You think people are anti-gov now….touch
this deduction and the next little “needle”
(anything that’s the least bit aggravating in the news),
there’ll erupt widespread riots.

Trust me on this. The psychological connection
is too powerful here to mess with this deduction
at this time in history.

By: neeros Sun, 14 Aug 2011 09:26:18 +0000 How come when Washington has a budget problem any time, their first response is that the answer to the problem is to raise taxes? I have an idea, how about cutting spending and balancing the budget first? Then and only then would I concider raising taxes, and any new revenue should go towards retiring the debt (and the tax should sunset when it is retired). I am averse to giving Washington any more money to squander. And from now on, if they want to spend, they need to figure out where the money will come from first. Either cut something else, or raise taxes to cover it, but no more deficits.

By: gryphon Sun, 14 Aug 2011 07:47:06 +0000 Based on your figures it is clearly a net tax on the poor/middle – regressive. And clearly open to abuse via equity loans.
There’s no doubt that home ownership is one of the most stabilising influences in any society. The point would be to confer that social benefit on as many people as possible.
Extending the tax break past the first/family home surely benefits no-one.

By: Yowser Sun, 14 Aug 2011 04:39:23 +0000 The deduction is a government effort, a social policy, to promote home ownership over renting. It results in owners being tax-favored over renters. Which, as a class, are wealthier? The owners, of course. Thus the deduction is part of a regressive tax policy in which the more well-off get a break on their housing expense while the less well-off do not. It also inflates the market value of home ownership above the level it would be at without the deduction. This further distances the affordability of housing to those at lower levels of income, for whom the deduction is either reduced or not available. It also reduces the liquidity of housing through of the higher price it causes combined with the smaller pool of buyers who can take advantage of the deduction. Should we do anything to change this? I am only framing the question as I see it. This issue will be reviewed more and more and become the subject of serious debate.

By: robb1 Sun, 14 Aug 2011 04:30:20 +0000 wanna kill an already dead market? Let’s go the Bahamas then.. :)

By: AussieYank Sun, 14 Aug 2011 04:29:48 +0000 Why not follow the Aussies and remove the interest deduction, but have a complete exemption from the capital gains tax for (one) principal residence (at a time), without the messy partial system that presently exists.

By: ErikD Sun, 14 Aug 2011 04:10:38 +0000 Of COURSE this favoritism should be eliminated, being both economically counterproductive and deeply unfair to those who can’t or don’t happen to own homes. But it’s unfortunately so “baked into” the economy and society that ending it in one go would cause tremendous dislocations and pain among those who made homebuying decisions based on it. So just phase it out, say at 10% a year, and starting with a hard cap at maybe 250k.

By: beni_gabor Sun, 14 Aug 2011 04:03:13 +0000 max the mortgage deduction out for a 400k home.
limit it your first mortgage, on the primary residence.

By: majkmushrm Sun, 14 Aug 2011 03:42:59 +0000 There should have been a don’t care choice.

But really, why couldn’t the tax process be as simple as “how much did you make?” (all the pluses and minuses with no limits on loss deduction). Subtract your exemption (which should allow the family tax free income to live at the poverty level, at least, if not more). What’s left? Here’s your tax. No more different classes of income, no deductions for you choosing to do x, y, or z. Pretty much How much did you make? Send it in.

By: Greenspan2 Sun, 14 Aug 2011 03:36:46 +0000 As a transition, the deduction could be phased out. While intended to promote home ownership, it has distorted the market and contributed to inflationary mispricing promoted by the real estate industry and subsidized by renters. Like everything else in America, it just became a rigged game with little underlying value except for the get rich quick crowd.