The case for ending housing finance subsidies

[briansd1]

[quote=FormerSanDiegan] I, for example would rent out my primary and move into a rental. The mortgage interest I currently pay would turn into a business expense. [/quote]

You wouldn’t move to a rental.

Your wife won’t be able to decorate; you won’t be able to add sweat equity and you would not have pride of ownership. Remember some of the things that are worth paying an ownership premium for?

If the MID is ever eliminated, it will be phased out over a decade or more.

But if the Tea Party is going to made advances, I want them to eliminate the MID cold-turkey just to spite the people who kept pushing the MID (and pride of ownership, etc..) as a reason to buy. That entertainment would be better than reality TV.

[scaredyclassic]

I fully expected the MID to be immediately eliminated shortly after I purchased a house.

[scaredyclassic]

I fully expected the MID to be immediately eliminated shortly after I purchased a house.

[scaredyclassic]

I fully expected the MID to be immediately eliminated shortly after I purchased a house.

[scaredyclassic]

I fully expected the MID to be immediately eliminated shortly after I purchased a house.

[scaredyclassic]

I fully expected the MID to be immediately eliminated shortly after I purchased a house.

[CA renter]

[quote=captcha][quote=CA renter][quote=outtamojo]Renters don’t get breaks? Renters get free fire and police protection and those with kids get free
schools and anything else property tax pays for.[/quote]

Unless the landlords are in the red every month for the same amount as their property taxes (after deductions are taken into account), then it’s the renters who are paying the property tax — through the landlord.

If the landlords are making a profit, then they are the ones getting something for free.[/quote]

It depends where you sit – if the property tax was not deductible the landlord would have to charge higher rent, so the deduction flows through the landlord to the renter. Having the landlord pay the tax just makes it easier for the government to collect.[/quote]

Rents are determined by the market. Landlords do not get to choose to raise rent beyond what renters are willing to pay, which is why so many “landlords” are running in the red each month. Also, many landlords (like mine) who bought many, many years ago, do not pass those savings on to the renters — they keep it as profit.

But yes, taxing the LLs instead of the renters makes it easier for the govt to collect the taxes.

[CA renter]

[quote=captcha][quote=CA renter][quote=outtamojo]Renters don’t get breaks? Renters get free fire and police protection and those with kids get free
schools and anything else property tax pays for.[/quote]

Unless the landlords are in the red every month for the same amount as their property taxes (after deductions are taken into account), then it’s the renters who are paying the property tax — through the landlord.

If the landlords are making a profit, then they are the ones getting something for free.[/quote]

It depends where you sit – if the property tax was not deductible the landlord would have to charge higher rent, so the deduction flows through the landlord to the renter. Having the landlord pay the tax just makes it easier for the government to collect.[/quote]

Rents are determined by the market. Landlords do not get to choose to raise rent beyond what renters are willing to pay, which is why so many “landlords” are running in the red each month. Also, many landlords (like mine) who bought many, many years ago, do not pass those savings on to the renters — they keep it as profit.

But yes, taxing the LLs instead of the renters makes it easier for the govt to collect the taxes.

[CA renter]

[quote=captcha][quote=CA renter][quote=outtamojo]Renters don’t get breaks? Renters get free fire and police protection and those with kids get free
schools and anything else property tax pays for.[/quote]

Unless the landlords are in the red every month for the same amount as their property taxes (after deductions are taken into account), then it’s the renters who are paying the property tax — through the landlord.

If the landlords are making a profit, then they are the ones getting something for free.[/quote]

It depends where you sit – if the property tax was not deductible the landlord would have to charge higher rent, so the deduction flows through the landlord to the renter. Having the landlord pay the tax just makes it easier for the government to collect.[/quote]

Rents are determined by the market. Landlords do not get to choose to raise rent beyond what renters are willing to pay, which is why so many “landlords” are running in the red each month. Also, many landlords (like mine) who bought many, many years ago, do not pass those savings on to the renters — they keep it as profit.

But yes, taxing the LLs instead of the renters makes it easier for the govt to collect the taxes.

[CA renter]

[quote=captcha][quote=CA renter][quote=outtamojo]Renters don’t get breaks? Renters get free fire and police protection and those with kids get free
schools and anything else property tax pays for.[/quote]

Unless the landlords are in the red every month for the same amount as their property taxes (after deductions are taken into account), then it’s the renters who are paying the property tax — through the landlord.

If the landlords are making a profit, then they are the ones getting something for free.[/quote]

It depends where you sit – if the property tax was not deductible the landlord would have to charge higher rent, so the deduction flows through the landlord to the renter. Having the landlord pay the tax just makes it easier for the government to collect.[/quote]

Rents are determined by the market. Landlords do not get to choose to raise rent beyond what renters are willing to pay, which is why so many “landlords” are running in the red each month. Also, many landlords (like mine) who bought many, many years ago, do not pass those savings on to the renters — they keep it as profit.

But yes, taxing the LLs instead of the renters makes it easier for the govt to collect the taxes.

[CA renter]

[quote=captcha][quote=CA renter][quote=outtamojo]Renters don’t get breaks? Renters get free fire and police protection and those with kids get free
schools and anything else property tax pays for.[/quote]

Unless the landlords are in the red every month for the same amount as their property taxes (after deductions are taken into account), then it’s the renters who are paying the property tax — through the landlord.

If the landlords are making a profit, then they are the ones getting something for free.[/quote]

It depends where you sit – if the property tax was not deductible the landlord would have to charge higher rent, so the deduction flows through the landlord to the renter. Having the landlord pay the tax just makes it easier for the government to collect.[/quote]

Rents are determined by the market. Landlords do not get to choose to raise rent beyond what renters are willing to pay, which is why so many “landlords” are running in the red each month. Also, many landlords (like mine) who bought many, many years ago, do not pass those savings on to the renters — they keep it as profit.

But yes, taxing the LLs instead of the renters makes it easier for the govt to collect the taxes.

[SK in CV]

[quote=captcha][quote=SK in CV]
1st, it was a subsidy for all debt when all interest was deductible. The remaining deductions for mortgage and other interest is still a subsidy. (The argument used in the mid-80’s when the elimination of the personal interest deduction was proposed is that it was a subsidy for borrowers who went into debt.)
[/quote]

It is a subsidy if we agree that any money not confiscated by the government is a subsidy to those who got to keep it.

Interest was never taxed until 1986. I was not here in 1986 when some of the interest was made taxable, but I believe you when you say that politicians framed the tax increase as an issue of fairness. That’s my only point – taxing something that has been going on since the invention of natural exchange and was never ever taxed might be ‘good’ policy and required, but it should not be presented as stopping a giveaway.
[/quote]

Interest income has been taxable for almost 100 years. (income tax started in 1913.) Interest paid was also deductible since the beginning of income tax in the US. But 100 years ago, almost no one other than farmers had mortgages on homes. There were no credit cards or HELOCS or car loans. It wasn’t until the mid-30’s that the number home mortgages exceeded farm mortgages.

But that doesn’t negate the fact that the mortgage interest deduction is a subsidy (or in the current lingo, a tax expenditure.) As is the deduction for church contributions, retirement plan contributions, and medical insurance. The tax code continues to evolve, In the last 100 years it’s undergone 2 major overhauls (in 1954 and again in 1986), with top tax rates ranging from the 7% at the beginning, to a high of 94% during WWII. The argument that once a deduction is codified, then any elimination of that deduction becomes a “confiscation” is absurd, unless you consider the first dollar of income tax paid as confiscation. If that’s the case, the largest confiscation of all time ocurred during the mid-80’s. It’s not a term I ever remember hearing either before or after tax reform passed under Ronald Reagan.

[quote=captcha]
[quote=SK in CV]
2nd, your argument would seem to support never reducing government entitlements or expenditures. So social security can never be reduced, medicaid cutbacks are out of the question, the Earned Income Credit must be permanent, reduction of college education funding should have been opposed, and eliminations of government employee retirement plans is yet again, the government taking something away. Is that really the argument you want to make?[/quote]

No. My argument is that the interest deduction is not an expenditure, that’s all.

Incidentally, you picked items that I have no problems with – I don’t think any of the listed should be reduced. But that can’t be inferred from my premises.[/quote]

We’re on the same page as far as elimination to those programs. But any way you look at it, they are all expenditures, as sure as elimniation of deductions is, as is funding the military.

[SK in CV]

[quote=captcha][quote=SK in CV]
1st, it was a subsidy for all debt when all interest was deductible. The remaining deductions for mortgage and other interest is still a subsidy. (The argument used in the mid-80’s when the elimination of the personal interest deduction was proposed is that it was a subsidy for borrowers who went into debt.)
[/quote]

It is a subsidy if we agree that any money not confiscated by the government is a subsidy to those who got to keep it.

Interest was never taxed until 1986. I was not here in 1986 when some of the interest was made taxable, but I believe you when you say that politicians framed the tax increase as an issue of fairness. That’s my only point – taxing something that has been going on since the invention of natural exchange and was never ever taxed might be ‘good’ policy and required, but it should not be presented as stopping a giveaway.
[/quote]

Interest income has been taxable for almost 100 years. (income tax started in 1913.) Interest paid was also deductible since the beginning of income tax in the US. But 100 years ago, almost no one other than farmers had mortgages on homes. There were no credit cards or HELOCS or car loans. It wasn’t until the mid-30’s that the number home mortgages exceeded farm mortgages.

But that doesn’t negate the fact that the mortgage interest deduction is a subsidy (or in the current lingo, a tax expenditure.) As is the deduction for church contributions, retirement plan contributions, and medical insurance. The tax code continues to evolve, In the last 100 years it’s undergone 2 major overhauls (in 1954 and again in 1986), with top tax rates ranging from the 7% at the beginning, to a high of 94% during WWII. The argument that once a deduction is codified, then any elimination of that deduction becomes a “confiscation” is absurd, unless you consider the first dollar of income tax paid as confiscation. If that’s the case, the largest confiscation of all time ocurred during the mid-80’s. It’s not a term I ever remember hearing either before or after tax reform passed under Ronald Reagan.

[quote=captcha]
[quote=SK in CV]
2nd, your argument would seem to support never reducing government entitlements or expenditures. So social security can never be reduced, medicaid cutbacks are out of the question, the Earned Income Credit must be permanent, reduction of college education funding should have been opposed, and eliminations of government employee retirement plans is yet again, the government taking something away. Is that really the argument you want to make?[/quote]

No. My argument is that the interest deduction is not an expenditure, that’s all.

Incidentally, you picked items that I have no problems with – I don’t think any of the listed should be reduced. But that can’t be inferred from my premises.[/quote]

We’re on the same page as far as elimination to those programs. But any way you look at it, they are all expenditures, as sure as elimniation of deductions is, as is funding the military.

[SK in CV]

[quote=captcha][quote=SK in CV]
1st, it was a subsidy for all debt when all interest was deductible. The remaining deductions for mortgage and other interest is still a subsidy. (The argument used in the mid-80’s when the elimination of the personal interest deduction was proposed is that it was a subsidy for borrowers who went into debt.)
[/quote]

It is a subsidy if we agree that any money not confiscated by the government is a subsidy to those who got to keep it.

Interest was never taxed until 1986. I was not here in 1986 when some of the interest was made taxable, but I believe you when you say that politicians framed the tax increase as an issue of fairness. That’s my only point – taxing something that has been going on since the invention of natural exchange and was never ever taxed might be ‘good’ policy and required, but it should not be presented as stopping a giveaway.
[/quote]

Interest income has been taxable for almost 100 years. (income tax started in 1913.) Interest paid was also deductible since the beginning of income tax in the US. But 100 years ago, almost no one other than farmers had mortgages on homes. There were no credit cards or HELOCS or car loans. It wasn’t until the mid-30’s that the number home mortgages exceeded farm mortgages.

But that doesn’t negate the fact that the mortgage interest deduction is a subsidy (or in the current lingo, a tax expenditure.) As is the deduction for church contributions, retirement plan contributions, and medical insurance. The tax code continues to evolve, In the last 100 years it’s undergone 2 major overhauls (in 1954 and again in 1986), with top tax rates ranging from the 7% at the beginning, to a high of 94% during WWII. The argument that once a deduction is codified, then any elimination of that deduction becomes a “confiscation” is absurd, unless you consider the first dollar of income tax paid as confiscation. If that’s the case, the largest confiscation of all time ocurred during the mid-80’s. It’s not a term I ever remember hearing either before or after tax reform passed under Ronald Reagan.

[quote=captcha]
[quote=SK in CV]
2nd, your argument would seem to support never reducing government entitlements or expenditures. So social security can never be reduced, medicaid cutbacks are out of the question, the Earned Income Credit must be permanent, reduction of college education funding should have been opposed, and eliminations of government employee retirement plans is yet again, the government taking something away. Is that really the argument you want to make?[/quote]

No. My argument is that the interest deduction is not an expenditure, that’s all.

Incidentally, you picked items that I have no problems with – I don’t think any of the listed should be reduced. But that can’t be inferred from my premises.[/quote]

We’re on the same page as far as elimination to those programs. But any way you look at it, they are all expenditures, as sure as elimniation of deductions is, as is funding the military.

[SK in CV]

[quote=captcha][quote=SK in CV]
1st, it was a subsidy for all debt when all interest was deductible. The remaining deductions for mortgage and other interest is still a subsidy. (The argument used in the mid-80’s when the elimination of the personal interest deduction was proposed is that it was a subsidy for borrowers who went into debt.)
[/quote]

It is a subsidy if we agree that any money not confiscated by the government is a subsidy to those who got to keep it.

Interest was never taxed until 1986. I was not here in 1986 when some of the interest was made taxable, but I believe you when you say that politicians framed the tax increase as an issue of fairness. That’s my only point – taxing something that has been going on since the invention of natural exchange and was never ever taxed might be ‘good’ policy and required, but it should not be presented as stopping a giveaway.
[/quote]

Interest income has been taxable for almost 100 years. (income tax started in 1913.) Interest paid was also deductible since the beginning of income tax in the US. But 100 years ago, almost no one other than farmers had mortgages on homes. There were no credit cards or HELOCS or car loans. It wasn’t until the mid-30’s that the number home mortgages exceeded farm mortgages.

But that doesn’t negate the fact that the mortgage interest deduction is a subsidy (or in the current lingo, a tax expenditure.) As is the deduction for church contributions, retirement plan contributions, and medical insurance. The tax code continues to evolve, In the last 100 years it’s undergone 2 major overhauls (in 1954 and again in 1986), with top tax rates ranging from the 7% at the beginning, to a high of 94% during WWII. The argument that once a deduction is codified, then any elimination of that deduction becomes a “confiscation” is absurd, unless you consider the first dollar of income tax paid as confiscation. If that’s the case, the largest confiscation of all time ocurred during the mid-80’s. It’s not a term I ever remember hearing either before or after tax reform passed under Ronald Reagan.

[quote=captcha]
[quote=SK in CV]
2nd, your argument would seem to support never reducing government entitlements or expenditures. So social security can never be reduced, medicaid cutbacks are out of the question, the Earned Income Credit must be permanent, reduction of college education funding should have been opposed, and eliminations of government employee retirement plans is yet again, the government taking something away. Is that really the argument you want to make?[/quote]

No. My argument is that the interest deduction is not an expenditure, that’s all.

Incidentally, you picked items that I have no problems with – I don’t think any of the listed should be reduced. But that can’t be inferred from my premises.[/quote]

We’re on the same page as far as elimination to those programs. But any way you look at it, they are all expenditures, as sure as elimniation of deductions is, as is funding the military.

[Author]

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