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Just curious how those on the board feel if many current tax deductions such as mortgage interest & charitable giving were eliminated and a higher standard deduction was applied?
Since I have not read any further into what is actually being proposed just on the surface I think it could be a good thing. If the real estate interest deduction is eliminated that could put pressure on housing prices and bring housing back to being affordable to more middle class families while the increased standard deduction would make up for the mortgage deduction. In fact a higher standard deduction may be more beneficial to most.
As for charitable donations- I know there is a fear that donations will lower but I would certainly hope those that do give are giving because they truly want to help as opposed to just jockeying their taxes. Most truly wealthy people I know give because they believe in the cause. My issue with most charities is how little actually goes to the cause and how much lines the admin's pockets.
It would hurt me but eliminate them anyway. People who want to buy a house, or have one, shouldn't be subsidized by people who don't. Society benefits from home ownership but if the price is people who can't afford houses getting them anyway it's too high.
Charitable giving was popular long before there was an income tax. Carnegie, Rockefeller, Vanderbilt endowed universities, built libraries and hospitals, etc. all over the country before the income tax. I believe that people who donate appreciated securities can deduct the market value of them even though the cost basis might be far less (not positive here).
Every deduction sounds like it supports a noble purpose but is actually riddled with venality. Get rid of them, and the various state tax deductions with them.
I'd be fine with eliminating them all. No deductions for mortgage interest, real estate taxes, childcare, and all the rest. Just have a standard deduction for basically breathing at some point during the tax year.
It would hurt me but eliminate them anyway. People who want to buy a house, or have one, shouldn't be subsidized by people who don't. Society benefits from home ownership but if the price is people who can't afford houses getting them anyway it's too high.
Charitable giving was popular long before there was an income tax. Carnegie, Rockefeller, Vanderbilt endowed universities, built libraries and hospitals, etc. all over the country before the income tax. I believe that people who donate appreciated securities can deduct the market value of them even though the cost basis might be far less (not positive here).
Every deduction sounds like it supports a noble purpose but is actually riddled with venality. Get rid of them, and the various state tax deductions with them.
Your first paragraph is garbage and leaves out plenty of required nuance.
The whole reason why there is public charity is that private charity was entirely inadequate to the scope of the task. No serious person today would suggest that things on that score have changed any. Indeed, many modern charities that people think of as being private are in fact heavily subsidized by government. And yes, that includes your local church or other place of worship.
Meanwhile, building incentives and/or disincentives into the tax code is one of the cheapest and most efficient ways of influencing personal behavior and of offering either support of behaviors deemed socially constructive or discouragement of those deemed to be socially destructive. In economic terms, the bang-for-the-buck here is quite high in each direction.
Just curious how those on the board feel if many current tax deductions such as mortgage interest & charitable giving were eliminated and a higher standard deduction was applied?
Since I have not read any further into what is actually being proposed just on the surface I think it could be a good thing. If the real estate interest deduction is eliminated that could put pressure on housing prices and bring housing back to being affordable to more middle class families while the increased standard deduction would make up for the mortgage deduction. In fact a higher standard deduction may be more beneficial to most.
As for charitable donations- I know there is a fear that donations will lower but I would certainly hope those that do give are giving because they truly want to help as opposed to just jockeying their taxes. Most truly wealthy people I know give because they believe in the cause. My issue with most charities is how little actually goes to the cause and how much lines the admin's pockets.
The proposal in the Republican tax plan was to eliminate the personal exemptions and raise the standard deduction to offset the loss of the single exemption. You're essentially eliminating the tax break for households with dependent children and reducing the accessibility to deductions for state tax, real estate tax, mortgage interest, medical expense, and charitable giving by roughly the amount of the personal exemption.
It is basically a political topic. You can see that most of the arguments made in the previous mortgage interest and FICA topics stem from what setup is personally beneficial at the present time.
I don't have a mortgage (though I might in the future). Every year, I calculate standard deduction vs. listing everything, and I save more with standard. So in my current situation, raising the standard deduction would be good for me, as well as renters and folks who have paid-off homes.
Why should home mortgage interest be deductible, anyway? Sure, it encourages people to buy homes, but is it fair to penalize people who aren't financing a house? Like, poor people?
It does seem like a lot of tax credits aren't thought through very well. Like the credit for solar systems (solar power systems, that is, not the planets grouped around our sun); if you don't owe enough taxes, you pay more for solar than people who are earning enough to owe a lot. That's right, poor people have to pay more.
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