Home › Forums › Financial Markets/Economics › Elimination of Mortgage Deduction
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jficquette.
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November 10, 2010 at 7:55 PM #630269November 11, 2010 at 9:03 AM #629324
jficquette
ParticipantThey need to tax health benefits too.
November 11, 2010 at 9:03 AM #629403ParticipantThey need to tax health benefits too.
November 11, 2010 at 9:03 AM #629976ParticipantThey need to tax health benefits too.
November 11, 2010 at 9:03 AM #630103ParticipantThey need to tax health benefits too.
November 11, 2010 at 9:03 AM #630420ParticipantThey need to tax health benefits too.
November 11, 2010 at 12:30 PM #629514UCGal
ParticipantI was trying to figure out some stuff, historically, about the mortgage interest deduction and how it came to be sacrosanct…
I found a really good article from 2006 on the topic.
http://www.nytimes.com/2006/03/05/magazine/305deduction.1.htm
The author makes several valid points.
* Home ownership rates are pretty much the same in the US, England, Australia, and Canada. Only the US has a mortgage interest rate deduction.* The interest rate deductions were initially there for businesses. Over time, other types of interest have been eliminated from the tax code – but mortgage interest was preserved.
* Pre WW2 most homeowners did not have mortgages – so no interest deductions. Even after WW2 most mortgages were small and incomes low enough that the taxpayers didn’t itemize. (My in-laws fit this.. bought a home when they married right after WW2. Had a 10 year note. Paid it off in 7 because they hated debt. All on a blue collar factory job while popping out 6 kids.)
If you get a chance – it’s a really interesting article.
November 11, 2010 at 12:30 PM #629593ParticipantI was trying to figure out some stuff, historically, about the mortgage interest deduction and how it came to be sacrosanct…
I found a really good article from 2006 on the topic.
http://www.nytimes.com/2006/03/05/magazine/305deduction.1.htm
The author makes several valid points.
* Home ownership rates are pretty much the same in the US, England, Australia, and Canada. Only the US has a mortgage interest rate deduction.* The interest rate deductions were initially there for businesses. Over time, other types of interest have been eliminated from the tax code – but mortgage interest was preserved.
* Pre WW2 most homeowners did not have mortgages – so no interest deductions. Even after WW2 most mortgages were small and incomes low enough that the taxpayers didn’t itemize. (My in-laws fit this.. bought a home when they married right after WW2. Had a 10 year note. Paid it off in 7 because they hated debt. All on a blue collar factory job while popping out 6 kids.)
If you get a chance – it’s a really interesting article.
November 11, 2010 at 12:30 PM #630166ParticipantI was trying to figure out some stuff, historically, about the mortgage interest deduction and how it came to be sacrosanct…
I found a really good article from 2006 on the topic.
http://www.nytimes.com/2006/03/05/magazine/305deduction.1.htm
The author makes several valid points.
* Home ownership rates are pretty much the same in the US, England, Australia, and Canada. Only the US has a mortgage interest rate deduction.* The interest rate deductions were initially there for businesses. Over time, other types of interest have been eliminated from the tax code – but mortgage interest was preserved.
* Pre WW2 most homeowners did not have mortgages – so no interest deductions. Even after WW2 most mortgages were small and incomes low enough that the taxpayers didn’t itemize. (My in-laws fit this.. bought a home when they married right after WW2. Had a 10 year note. Paid it off in 7 because they hated debt. All on a blue collar factory job while popping out 6 kids.)
If you get a chance – it’s a really interesting article.
November 11, 2010 at 12:30 PM #630293ParticipantI was trying to figure out some stuff, historically, about the mortgage interest deduction and how it came to be sacrosanct…
I found a really good article from 2006 on the topic.
http://www.nytimes.com/2006/03/05/magazine/305deduction.1.htm
The author makes several valid points.
* Home ownership rates are pretty much the same in the US, England, Australia, and Canada. Only the US has a mortgage interest rate deduction.* The interest rate deductions were initially there for businesses. Over time, other types of interest have been eliminated from the tax code – but mortgage interest was preserved.
* Pre WW2 most homeowners did not have mortgages – so no interest deductions. Even after WW2 most mortgages were small and incomes low enough that the taxpayers didn’t itemize. (My in-laws fit this.. bought a home when they married right after WW2. Had a 10 year note. Paid it off in 7 because they hated debt. All on a blue collar factory job while popping out 6 kids.)
If you get a chance – it’s a really interesting article.
November 11, 2010 at 12:30 PM #630610ParticipantI was trying to figure out some stuff, historically, about the mortgage interest deduction and how it came to be sacrosanct…
I found a really good article from 2006 on the topic.
http://www.nytimes.com/2006/03/05/magazine/305deduction.1.htm
The author makes several valid points.
* Home ownership rates are pretty much the same in the US, England, Australia, and Canada. Only the US has a mortgage interest rate deduction.* The interest rate deductions were initially there for businesses. Over time, other types of interest have been eliminated from the tax code – but mortgage interest was preserved.
* Pre WW2 most homeowners did not have mortgages – so no interest deductions. Even after WW2 most mortgages were small and incomes low enough that the taxpayers didn’t itemize. (My in-laws fit this.. bought a home when they married right after WW2. Had a 10 year note. Paid it off in 7 because they hated debt. All on a blue collar factory job while popping out 6 kids.)
If you get a chance – it’s a really interesting article.
November 11, 2010 at 5:58 PM #629775edna_mode
ParticipantMore analysis and data on the mortgage deduction:
What I took away:
1) Lots of studies have been done on educational performance of children in homeowning families and there is a positive correlation and causation.
2) Homeownership rates have not changed in almost 40 years despite fluctuations in % people itemizing (and profound changes in the tax code).
As someone who doesn’t want riots, I think phasing out, or putting caps on deductability so that the housing market can slowly reflect those changes makes sense.
As an observer of the framing of the political discussion, I think it was brilliant to move the Overton window: offer something outrageous first (abolish deduction) so that your next offer seems sane by comparison (cap deduction)
Canada has similar homeownership rates with no interest deduction, and mortgages that are all basically 5 year ARMs — you have to reset the rate every 5 years over the 15-25yr loan. And none of their banks failed. Just an observation.
November 11, 2010 at 5:58 PM #629852ParticipantMore analysis and data on the mortgage deduction:
What I took away:
1) Lots of studies have been done on educational performance of children in homeowning families and there is a positive correlation and causation.
2) Homeownership rates have not changed in almost 40 years despite fluctuations in % people itemizing (and profound changes in the tax code).
As someone who doesn’t want riots, I think phasing out, or putting caps on deductability so that the housing market can slowly reflect those changes makes sense.
As an observer of the framing of the political discussion, I think it was brilliant to move the Overton window: offer something outrageous first (abolish deduction) so that your next offer seems sane by comparison (cap deduction)
Canada has similar homeownership rates with no interest deduction, and mortgages that are all basically 5 year ARMs — you have to reset the rate every 5 years over the 15-25yr loan. And none of their banks failed. Just an observation.
November 11, 2010 at 5:58 PM #630426ParticipantMore analysis and data on the mortgage deduction:
What I took away:
1) Lots of studies have been done on educational performance of children in homeowning families and there is a positive correlation and causation.
2) Homeownership rates have not changed in almost 40 years despite fluctuations in % people itemizing (and profound changes in the tax code).
As someone who doesn’t want riots, I think phasing out, or putting caps on deductability so that the housing market can slowly reflect those changes makes sense.
As an observer of the framing of the political discussion, I think it was brilliant to move the Overton window: offer something outrageous first (abolish deduction) so that your next offer seems sane by comparison (cap deduction)
Canada has similar homeownership rates with no interest deduction, and mortgages that are all basically 5 year ARMs — you have to reset the rate every 5 years over the 15-25yr loan. And none of their banks failed. Just an observation.
November 11, 2010 at 5:58 PM #630553ParticipantMore analysis and data on the mortgage deduction:
What I took away:
1) Lots of studies have been done on educational performance of children in homeowning families and there is a positive correlation and causation.
2) Homeownership rates have not changed in almost 40 years despite fluctuations in % people itemizing (and profound changes in the tax code).
As someone who doesn’t want riots, I think phasing out, or putting caps on deductability so that the housing market can slowly reflect those changes makes sense.
As an observer of the framing of the political discussion, I think it was brilliant to move the Overton window: offer something outrageous first (abolish deduction) so that your next offer seems sane by comparison (cap deduction)
Canada has similar homeownership rates with no interest deduction, and mortgages that are all basically 5 year ARMs — you have to reset the rate every 5 years over the 15-25yr loan. And none of their banks failed. Just an observation.
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