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View Diary: Romney's Plan Would End Mortgage Interest Deduction (131 comments)

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  •  It is the biggest example of middle class (15+ / 0-)

    welfare.  Many who hate government would scream if government stopped subsidizing their home ownership.

    Outside of the merits of the interest rate deduction policy, I want to hit Romney over the head with his plan and what it would mean.

    I'm from the Elizabeth Warren and Darcy Burner Wing of the Democratic Party!

    by TomP on Wed Jun 20, 2012 at 08:15:34 AM PDT

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    •  Or... it is the biggest return on lowered taxes (11+ / 0-)

      that you get.

      It's a direct investment into community building and maintenance.

      Home ownership vests "giving a damn" into communities. Good fences make good neighbors which creates good neighborhoods and communities where people get involved.

      Money can't begin to buy the returns that you get from people who have a vested interest in their neighborhood. And self-interest helps drive it when your property values are maintained and your property tax base keeps firehouses, libraries and police stations open.

      And remember when those firehouses get gutted from lack of funding, it hits the homeowner insurance rates.

      Democrats need to be the champions in the eyes of the American people for this.


      In my honor he pulled out old forgotten dignity and walked straight in a crooked world. ~~poetry of young Barack Obama

      by bronte17 on Wed Jun 20, 2012 at 09:05:08 AM PDT

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      •  It's a direct subsidy to banks and an excuse (0+ / 0-)

        to charge far higher taxes on working people in urban areas.

        All other things being equal, if you make 20-35k and live in a high cost (read, BLUE) area, you're going to pay thousands more in Federal income tax every year because you cannot take that deduction.  

        What's more, the "benefit" (it's really just an interest rate inflation device, helping out banks) goes overwhelmingly to the top income quintile - a group of people who need no help.

        “The administration should be worried about the level of despair here.” ~Markos Moulitsas at NN12

        by JesseCW on Wed Jun 20, 2012 at 11:09:06 AM PDT

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        •  It isn't thousands more in income taxes (0+ / 0-)

          If you use a $200k mortgage value (median home price in 2008), you have an interest deduction value of $10k or so for the first few years. The mortgage interest deduction decreases over time.

          That $10k interest deduction translates into reducing the tax bill by $1,000 for that year. BUT, the homeowner also has expenses for upkeep that a renter isn't responsible for, so it's basically a trade off.

          Of course, $200k cannot buy a home in Boston or NYC or many parts of CA, so those mortgage interest deductions would be higher. But, overall it is a benefit to the middle class homeowners who need the break.

          This shouldn't be a zero sum game pitting one group of the 99% against another.


          In my honor he pulled out old forgotten dignity and walked straight in a crooked world. ~~poetry of young Barack Obama

          by bronte17 on Wed Jun 20, 2012 at 12:11:12 PM PDT

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          •  That 10k deduction only reduces the tax bill (0+ / 0-)

            by 1k if you're in the 10% bracket.

            If you're in the ten percent bracket, there's little chance you can afford a 200k home.

            This is yet another case of white collar pricks throwing working people under the bus and then chattering about "solidarity" to drown up the thumping sound.

            Overall, this is a scam which gives tax breaks to people in (oh, let's all be surprised, mostly Red) rural areas while sticking people in high cost urban areas with the bill.

            “The administration should be worried about the level of despair here.” ~Markos Moulitsas at NN12

            by JesseCW on Wed Jun 20, 2012 at 12:20:40 PM PDT

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            •  Jesse... home ownership has intrinsic values (1+ / 0-)
              Recommended by:
              JamieG from Md

              that your tax return scenario doesn't capture. Regardless of income bracket.

              Now, not everyone wants or needs to be in home ownership at certain periods of their life.

              But, there are tremendous societal benefits from home ownership that you ignore.


              In my honor he pulled out old forgotten dignity and walked straight in a crooked world. ~~poetry of young Barack Obama

              by bronte17 on Wed Jun 20, 2012 at 02:58:39 PM PDT

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    •  A huge portion of the benefits, though, (9+ / 0-)

      flow to the wealthy.

    •  It's not "welfare". It's a tax benefit... (0+ / 0-)

      ...designed to encourage home ownership (and, incidentally, to help the home building industry).  It's an economically-sound subsidy for the middle class.  Calling it "welfare" makes it sound like something undeserved, or even wrong.  And yes, as a homeowner, I would definitely scream if this subsidy were eliminated.

      The road to Hell is paved with pragmatism.

      by TheOrchid on Wed Jun 20, 2012 at 10:06:12 AM PDT

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      •  I Would Give It Up... (2+ / 0-)
        Recommended by:
        slouchsock, JesseCW

        But certainly not without meaningful progressive taxation reform on the 1%.  Wouldn't budge an inch otherwise.  We've got the Reagan, Bush I, and Bush II debt to pay off, which will either happen, or be rendered worthless by rampant inflation, those are the only 2 options.

        Incentives to increase home ownership ultimately result in one thing:  raising the price of home ownership.  A prime example is the Greenspan decade of free money and the financial industry unregulated collateralization and leveraging which contributed to the same pile of sticks costing double it did a decade earlier.  I'll take my $70,000 1980 home at 14% any day over the same $400,000 home at 4% today.

      •  It's a horrificaly unjust bank subsidy that (0+ / 0-)

        has served as an excuse to overtax working class people who make the mistake of living in cities.

        Come at us with a renters tax credit, something that actually will benefit the disadvantaged, and we'll talk.

        “The administration should be worried about the level of despair here.” ~Markos Moulitsas at NN12

        by JesseCW on Wed Jun 20, 2012 at 11:11:31 AM PDT

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        •  Don's screw over homeowners... (0+ / 0-)

          ...and we'll talk.

          But of course, this setting us against ourselves is just what serves Republicans best.  Angry at the benefits of a tax break for homeowners?  Great - Republicans love that.

          The road to Hell is paved with pragmatism.

          by TheOrchid on Wed Jun 20, 2012 at 11:51:28 AM PDT

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          •  There is no "ourselves" here. (0+ / 0-)

            I'm not of a group with people who believe they should get to have their purchase of a home subsidized at the direct expense of people who cannot afford to buy one.

            More and more, privileged white collar assholes keep telling me that somehow it's me and them against the 1% - but more and more, they keep fucking me and mine over in order to try to hang on to what they consider their historic privileges.

            The lower rungs of the affluent now see that they may be cast down to where my family has been since we got to this country, and come trying to make some sort of common cause in their terror?  All the while talking about how proud the rest of us should be to be permitted to help them keep profiting at our expense?

            Pay your fucking taxes.  Stop trying to find loopholes and dodges to get out of paying back to a society that has given you so much that you own a house.  Show some gratitude, and understand that you're massively under taxed if we look at any other industrialized nation.

            Rejecting lemon socialism isn't falling for some Republican ploy - it's just a result of being capable of seeing my own self interest.

            “The administration should be worried about the level of despair here.” ~Markos Moulitsas at NN12

            by JesseCW on Wed Jun 20, 2012 at 12:12:53 PM PDT

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            •  So I'm a white collar asshole? (0+ / 0-)

              Why don't you and your problems go fuck yourselves.

              The road to Hell is paved with pragmatism.

              by TheOrchid on Wed Jun 20, 2012 at 01:15:07 PM PDT

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            •  Many people would end up in foreclosure (1+ / 0-)
              Recommended by:
              JamieG from Md

              if you pulled the plug on this. Being a renter shouldn't make you callous to the plight of ordinary people who bought houses that they would not be able to afford if the deduction were taken away. They aren't all affluent. They didn't do anything evil and they don't deserve to be punished. They made rational financial decisions based on existing circumstances.

              Driving a lot more people into foreclosure would be a disaster for the whole economy. It's the last thing we need right now.

              Consider that the existence of the deduction drives up house prices. People who have mortgages get to take advantage of the deduction, but they have also paid for it with higher prices. It's not at all clear who actually benefits from it, but it is clear who would get hurt if it were abruptly taken away - many people across the whole income spectrum.

              Eliminating the deduction may be a good thing in the long run, but it requires a lot of thought to do it in a way that doesn't have disastrous consequences.

              We decided to move the center farther to the right by starting the whole debate from a far-right position to begin with. - Former House Majority Leader Tom DeLay

              by denise b on Wed Jun 20, 2012 at 08:18:54 PM PDT

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    •  Obama's 2009 proposal to limit the deduction (5+ / 0-)
      Recommended by:
      chimpy, ozsea1, mmacdDE, JesseCW, redlum jak

      would only affect high income earners, those paying 33% and 35% tax rates.

      Presently, the mortgage interest deduction is capped to $1 million in mortgage debt. Obama proposed to cap all deductions to 28%, a cap that would affect those making $250k/year and more -- especially those in the "more" category.

      From the Wall Street Journal:

      The changes would be phased in gradually over the next few years. For the 2009 tax year, the 33% tax bracket starts with couples with taxable earnings of $208,850, when adjusted for personal exemptions and various deductible expenses. A taxpayer in the top bracket paying $1,000 of mortgage interest, for example, would see a tax break worth $350 reduced to $280.
      That's a piddly amount of increase for the couple with earnings over 200k, and the proposal would mean $318 billion tax revenue per year.

      Mortgage interest deduction was bad policy from the beginning. We should get behind a sensible rewrite or the policy instead of treating it like another sacred cow.

      The sh*t those people [republicans] say just makes me weep for humanity! - Woody Harrelson

      by SoCalSal on Wed Jun 20, 2012 at 10:11:25 AM PDT

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    •  White Color Welfare is *not* a good thing (0+ / 0-)

      we need to cling to.

      “The administration should be worried about the level of despair here.” ~Markos Moulitsas at NN12

      by JesseCW on Wed Jun 20, 2012 at 11:06:38 AM PDT

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