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

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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

          [ Parent ]

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