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It is ideologically correct to label subsidies as tax deductions. Just change "tax deductions" to "home purchase subsidy", which it is, and conservative crowd will go through some major toxic crap explosion of "socialism is coming, we all gonna die" kind.
On the contrary, I believe most conservatives would support tax deductions as "homeowners get to keep more of what they earn".
MID enables home buyers to bid up home prices because MID enables them to pay more to buy than they would be able to pay in the absence of MID.
Higher home prices contribute to higher rents, which cost renters more every month. Higher rents are definitely a negative bonus.
Ok explain to me HOW the MID allows you to bid up home prices.
The MID has no bearing on what I borrow. Sure agents like to throw in the "and you get a mortgage interest deduction bla bla bla." But even getting rid of the MID won't stop anyone from buying. Takingbitvawaybwould simokybbe another reason to pay my mortgage faster.
Ok explain to me HOW the MID allows you to bid up home prices.
The MID has no bearing on what I borrow. Sure agents like to throw in the "and you get a mortgage interest deduction bla bla bla." But even getting rid of the MID won't stop anyone from buying. Takingbitvawaybwould simokybbe another reason to pay my mortgage faster.
Since none of you understand fat finger Swahili that translates to "taking it away would simply be"
Ok explain to me HOW the MID allows you to bid up home prices.
The MID has no bearing on what I borrow. Sure agents like to throw in the "and you get a mortgage interest deduction bla bla bla." But even getting rid of the MID won't stop anyone from buying. Takingbitvawaybwould simokybbe another reason to pay my mortgage faster.
A lot of home sales these days are CASH sales - the numbers I've seen suggest that between one-third and one-half of home sales these days are CASH sales.
Obviously, having a boatload of cash allows bidders to bid up prices, like when two or more cash bidders are competing for a property. It's not just about bidders with financing.
It is ideologically correct to label subsidies as tax deductions. Just change "tax deductions" to "home purchase subsidy", which it is, and conservative crowd will go through some major toxic crap explosion of "socialism is coming, we all gonna die" kind.
This is not correct. Conservatives and liberals have a completely different thought process when it comes to money and taxes. You are trying to apply the liberal thought process to conservatives.
Liberals think that the money you earn belongs to everybody, except for the portion the government let's you keep. This is clear just by your statement alone. The very fact that you think that the words "deduction" and "subsidy" are interchangeable.
Conservatives think that the money you earn belongs to you, but the government takes your hard earned money away, to give to other people that didn't work for it.
So, no. Changing the label from "deduction" to "subsidy" would not disguise reality. A conservative would still see it as someone being forced to give away less of what is rightfully theirs.
This is not correct. Conservatives and liberals have a completely different thought process when it comes to money and taxes. You are trying to apply the liberal thought process to conservatives.
Liberals think that the money you earn belongs to everybody, except for the portion the government let's you keep. This is clear just by your statement alone. The very fact that you think that the words "deduction" and "subsidy" are interchangeable.
Incorrect. You are trying to apply conservative thought process to liberals.
This is not correct. Conservatives and liberals have a completely different thought process when it comes to money and taxes. You are trying to apply the liberal thought process to conservatives.
Liberals think that the money you earn belongs to everybody, except for the portion the government let's you keep. This is clear just by your statement alone. The very fact that you think that the words "deduction" and "subsidy" are interchangeable.
Conservatives think that the money you earn belongs to you, but the government takes your hard earned money away, to give to other people that didn't work for it.
So, no. Changing the label from "deduction" to "subsidy" would not disguise reality. A conservative would still see it as someone being forced to give away less of what is rightfully theirs.
You are framing the liberal position strangely - but in a way that - I think - FINALLY enables me to understand the conservative position.
I interpret your description of the liberal position as justifying whatever tax breaks people can get, whether of not any given tax break is fair to taxpayers who don't get the tax break.
IOW, it's tax war, and ANY tax break you get in tax war is fair, and if some taxpayers don't get any tax breaks that's just tough luck.
e.g. If a hypothetical tax system has a flat 20% nominal tax rate and a single 10% tax break for half of the taxpayers (call them Class A taxpayers), then Class A taxpayers get to keep more of what they earned and that's just too bad for Class B taxpayers who don't get the tax break. My position is that if the same revenue (i.e. revenue-neutral alternative) can be generated with a flat 15% rate and NO tax break, Class A taxpayers are getting a redistribution of 5%, paid for by Class B taxpayers.
You seem to be saying that it's a good thing for A to pay a 10% tax rate and if B has to pay 20% that's just too bad, Thank you for p(l)aying.
I'm saying that government has no right to redistribute 5% from B to A. If it's not B's money, why did B pay more tax than A?
You are framing the liberal position strangely - but in a way that - I think - FINALLY enables me to understand the conservative position.
I interpret your description of the liberal position as justifying whatever tax breaks people can get, whether of not any given tax break is fair to taxpayers who don't get the tax break.
IOW, it's tax war, and ANY tax break you get in tax war is fair, and if some taxpayers don't get any tax breaks that's just tough luck.
e.g. If a hypothetical tax system has a flat 20% nominal tax rate and a single 10% tax break for half of the taxpayers (call them Class A taxpayers), then Class A taxpayers get to keep more of what they earned and that's just too bad for Class B taxpayers who don't get the tax break. My position is that if the same revenue (i.e. revenue-neutral alternative) can be generated with a flat 15% rate and NO tax break, Class A taxpayers are getting a redistribution of 5%, paid for by Class B taxpayers.
You seem to be saying that it's a good thing for A to pay a 10% tax rate and if B has to pay 20% that's just too bad, Thank you for p(l)aying.
I'm saying that government has no right to redistribute 5% from B to A. If it's not B's money, why did B pay more tax than A?
You are missing something very important in the conservative mindset and that is that there is absolutely nothing fair about the income tax system. Fair, would be that everybody pays the exact same nominal amount. An ice cream cone costs $3.50. The owner of the ice cream store doesn't care whether you make $50K or $500K, the ice cream cone is still $3.50. If person "A" pays "X" income tax, then person "B" should pay "X", and family of 5 should pay 5X.
That would be complete fairness, but I think most conservatives understand you cannot run the government that way. Revenue would be too low to do just about anything, and you can't get blood from a stone.
The next level of fairness would be to charge everyone the same percentage of their income. Everybody pays 18%. No deductions or loopholes. That is feasible, and I think it is supported by most conservatives. They think that this, while not perfect, is fair enough. Many also think that usage taxes are the fairest form of taxation, while many liberals consider that to be regressive.
So with that said, let's go back to our current system. If person "A" is paying $200k in income tax, but he gets $15k back from his mortgage deduction, more power to him, because he is still paying $185K, which is a lot more than person "B" who is only paying $5K. Or even worse, person "C" who pays nothing, and even gets some of the money that person "A" and person "B" put in.
So yes, the word "fairness" is not something most conservatives apply to the tax code, so when someone takes advantage of a deduction or a loophole, most conservatives do not get upset about it. After all, they are just making a system of extreme imbalance, just a little bit more balanced.
Last edited by AnesthesiaMD; 06-11-2017 at 06:34 AM..
Incorrect. You are trying to apply conservative thought process to liberals.
Ha!
But clearly, it applies to that particular liberal. As I said, he thinks that the words "deduction" and "subsidy" are interchangeable. There seems to be many other liberals who say similar types of things, so either this is part of the liberal mindset, or a lot of liberals are trying to trick me into thinking it is.
Last edited by AnesthesiaMD; 06-11-2017 at 06:35 AM..
At 4% interest, you have to have a mortgage balance over $250,000 to break even with the $10k standard deduction for joint filers.
The standard deduction for those who are married and filing jointly in 2017 is $12,700. Interest payments over the first year of a 30-year fixed note for $250K at 4% would be $9,919.87. Real estate taxes of 1% of assessed value would turn all but a few hundred dollars worth of other state and local tax payments and charitable donations into tax deductions. A significant part of the value to be derived from the HMI deduction comes from conversion of other previously non-deductible expenditures that you will make in any case into rebate-earning entries on Schedule A.
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