U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
 
Old 07-24-2017, 07:55 PM
 
Location: City of the Angels
2,223 posts, read 1,526,118 times
Reputation: 5363

Advertisements

I think that they should eliminate it for the second or more houses bought and use it only for the primary residence.


Houses should be used for to be homes and not for speculation which just drives up the rents for the people who can't buy a home. If you have that much money to burn, you don't need financial help from the lower and middle class taxpayers who you are trying to take advantage of !
Really, how many homes does one need ?
Quick reply to this message

 
Old 07-24-2017, 08:33 PM
 
Location: Florida
4,396 posts, read 2,439,662 times
Reputation: 7792
It is a tool for real estate agents to BS their clients.
Quick reply to this message
 
Old 07-24-2017, 08:53 PM
 
18,311 posts, read 11,709,355 times
Reputation: 11953
Quote:
Originally Posted by engineman View Post
It is a tool for real estate agents to BS their clients.
Too many believe the myth that owning a home automatically equates to all sorts of tax deductions, including mortgage interest. That is until they sit or are sat down and numbers crunched to show just how ownership affects their personal situation.


If the GOP gets their way and raises the standard deduction to some huge number (say 10, or whatever), numbers of those who itemize will drop even further and thus you'll see even less taking the MID.
Quick reply to this message
 
Old 07-24-2017, 10:43 PM
 
3,594 posts, read 2,027,087 times
Reputation: 3319
I personally benefit from it, but would be fine with a phased phase-out, over 3-5 years maybe. If it's too quick some people would be caught with higher payments (effectively) than they can handle...bad for them and possibly a mini-crisis for the market as a chunk of inventory needed to be sold at just the moment where it's also worth less.
Quick reply to this message
 
Old 07-25-2017, 12:59 AM
 
6,308 posts, read 4,777,575 times
Reputation: 8437
(1) Jonathan Gruber does not have a lot of credibility (google him)

(2) Economic decisions are made on the margin. Being able to deduct mortgage interest from my income subject to tax was certainly one of the reasons I went from being a renter to an owner on February 28, 1985.
Quick reply to this message
 
Old 07-25-2017, 04:46 AM
 
4,229 posts, read 1,909,438 times
Reputation: 3787
Quote:
Originally Posted by Larry Siegel View Post
(1) Jonathan Gruber does not have a lot of credibility (google him)
The first point raised in Gruber's current wikipedia bio is that he is a Jew. This would suggest to me that it is his critics who have credibility issues.

Quote:
Originally Posted by Larry Siegel View Post
(2) Economic decisions are made on the margin. Being able to deduct mortgage interest from my income subject to tax was certainly one of the reasons I went from being a renter to an owner on February 28, 1985.
Tax preferences in general have effects on public behavior. They tend to be cheap and efficient ways of encouraging behavior viewed as socially beneficial. Meanwhile. such provisions as "sin taxes" serve to tamp down and discourage behavior not seen as being beneficial to society. There is nothing new in any of this.
Quick reply to this message
 
Old 07-25-2017, 08:29 AM
 
2,775 posts, read 1,508,997 times
Reputation: 2173
Quote:
Originally Posted by Pub-911 View Post
The first point raised in Gruber's current wikipedia bio is that he is a Jew. This would suggest to me that it is his critics who have credibility issues.
Perhaps, but was this remark regarding someone's particular ethnic persuasion really necessary(?)
Quick reply to this message
 
Old 07-25-2017, 10:22 AM
 
6,168 posts, read 3,262,714 times
Reputation: 12508
Quote:
Originally Posted by SportyandMisty View Post
Do People Respond to the Mortgage Interest Deduction?

According to findings of a new NBER working paper, the mortgage interest deduction does nothing to promote homeownership, a finding that undermines one of the core justifications for the tax break.

Letting taxpayers deduct mortgage interest encourages them to buy bigger homes and more expensive homes – but it doesn’t change that fundamental decision about whether to buy in the first place.

“Over multiple time periods, and considering multiple empirical strategies, we find no effect of the tax policy change on whether households own or rent,” wrote the authors, Jonathan Gruber of the Massachusetts Institute of Technology, Henrik Kleven of Princeton University and Amalie Jensen of the University of Copenhagen.

http://papers.nber.org/tmp/16428-w23600.pdf

Do People Respond to the Mortage Interest Deduction? Quasi-Experimental Evidence from Denmark

The quantitative data used are from Denmark.

Here's the abstract:



“I really view this as putting a nail in the coffin of the idea that this tax break affects homeownership,” MIT's Gruber said in an interview Monday. "If policy makers wanted a tax break to promote homeownership, a tax credit for first-time homebuyers or a deduction capped in line with median regional home prices would be more effective than the current rules," he said.

The mortgage interest deduction – only available to the roughly 30% of households that itemize their deductions – will reduce government tax collections by $72.4 billion in fiscal 2018, according to the congressional Joint Committee on Taxation.

Perhaps it really is time to get rid of the mortgage interest deduction as a loophole that has outlived its purpose.
It made a difference to me the last two times I bought. It affected how much I could ultimately afford, which is the SAME thing as whether to buy or not, since if I couldn't afford something decent, I wouldn't have bought at all.

But I don't know that that's the key reason for having the mortgage interest deduction. It's ONE reason. The other reason is that it is a very helpful deduction for the middle class, who are disproportionately affected by consumer taxes otherwise, and for whom this is often the ONLY deduction that is large enough to justify itemizing, allowing them to itemize their other deductions.

The deduction isn't important to non-homeowners, of course (the very poor) or to the wealthy (whose main deductions are related to investments, whether stocks, bonds, or real estate). This is why the wealthy often push the killing of the deduction....it doesn't matter much to them and would not affect their ability to itemize.

That 30% of people who itemize? If the mortgage interest deduction were killed, that 30% would drop appreciably, since many would not be able to itemize any more. They would be middle class.

If we're looking to cut taxes, taking away the main deduction for the middle class RAISES their taxes, and helps offset the huge tax cuts the wealthy want to pass for them. That's what that's about.

If we want to RAISE taxes, we should raise taxes on those who would be least affected by it: the wealthy.

Middle class wages have been stagnant for decades. I am totally against RAISING taxes on them, while being okay with stagnant wages. This is wrong wrong wrong. And a greedy move being pushed by the wealthy, so that the numbers for their tax cuts don't hit the country's revenues so hard (the estate tax...which affects a tiny percentage of people, all very wealthy; investment tax decreases; etc.).
Quick reply to this message
 
Old 07-25-2017, 11:30 AM
bg7
 
7,698 posts, read 7,645,830 times
Reputation: 14991
Quote:
Originally Posted by SportyandMisty View Post
Do People Respond to the Mortgage Interest Deduction?

According to findings of a new NBER working paper, the mortgage interest deduction does nothing to promote homeownership, a finding that undermines one of the core justifications for the tax break.

Letting taxpayers deduct mortgage interest encourages them to buy bigger homes and more expensive homes – but it doesn’t change that fundamental decision about whether to buy in the first place.

“Over multiple time periods, and considering multiple empirical strategies, we find no effect of the tax policy change on whether households own or rent,” wrote the authors, Jonathan Gruber of the Massachusetts Institute of Technology, Henrik Kleven of Princeton University and Amalie Jensen of the University of Copenhagen.

http://papers.nber.org/tmp/16428-w23600.pdf

Do People Respond to the Mortage Interest Deduction? Quasi-Experimental Evidence from Denmark

The quantitative data used are from Denmark.

Here's the abstract:



“I really view this as putting a nail in the coffin of the idea that this tax break affects homeownership,” MIT's Gruber said in an interview Monday. "If policy makers wanted a tax break to promote homeownership, a tax credit for first-time homebuyers or a deduction capped in line with median regional home prices would be more effective than the current rules," he said.

The mortgage interest deduction – only available to the roughly 30% of households that itemize their deductions – will reduce government tax collections by $72.4 billion in fiscal 2018, according to the congressional Joint Committee on Taxation.

Perhaps it really is time to get rid of the mortgage interest deduction as a loophole that has outlived its purpose.
"Only" a third? - that's still a lot.


Its all very well getting rid of it but what about the tens of millions people who when they were buying, and figuring out how much house they could buy, took this into account. Now you are going to turn around and suddenly remove a deduction that's been part of their calculations for decades. Bit of an ahole move.
Quick reply to this message
 
Old 07-25-2017, 11:33 AM
bg7
 
7,698 posts, read 7,645,830 times
Reputation: 14991
Quote:
Originally Posted by mhays25 View Post
I personally benefit from it, but would be fine with a phased phase-out, over 3-5 years maybe. If it's too quick some people would be caught with higher payments (effectively) than they can handle...bad for them and possibly a mini-crisis for the market as a chunk of inventory needed to be sold at just the moment where it's also worth less.


People with 30 year mortgages will still be hit at 3 years with a suddenly decreased affordability in their monthly mortgage payment.
Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


 
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:
Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top