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View Diary: Two million jobless Americans face their own fiscal cliff if unemployment benefits expire (112 comments)

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  •  The mortgage deduction... (4+ / 0-)
    Recommended by:
    Lujane, Sparhawk, gosoxataboy, qofdisks

    ...could be removed for primary residences also.

    I think it should be, but using a very long phase in period to avoid a sudden shock to the housing market -- perhaps over thirty years with 2% reduction each of the first ten years, a 3% reduction in each of the following ten years and a 5% reduction in each of the last ten years.

    The mortgage deduction is a throwback to the antiquated "everyone should own a home" notion when people tended to live in the same place for decades and jobs were not as fluid.

    The deduction increases housing prices making it that much more difficult for people to buy their first home unless they have enough income to benefit substantially from the mortgage deduction.

    A substantial portion of the benefit also ends up in the pockets of builders and speculators due to these increased housing prices.

    It's also a subsidy for tax payers in high income areas -- if we want to subsidize those in high income areas, just index the Federal Income Tax rates by cost of living in the area the tax payer lives.

    Of course, builders and real estate agents won't like this idea.

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