Should the Mortgage Interest Tax Deduction be Repealed? (buy homes, real estate, income tax)
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Should the mortgage interest tax deduction be repealed? Some economists argue that the deduction is nothing more than a subsidy to homeowners at the expense of renters. Renters who can't claim the deduction will end up paying higher income taxes since the government will have to offset the loss of the subsidy by raising taxes elsewhere.
Should the mortgage interest tax deduction be repealed? Some economists argue that the deduction is nothing more than a subsidy to homeowners at the expense of renters. Renters who can't claim the deduction will end up paying higher income taxes since the government will have to offset the loss of the subsidy by raising taxes elsewhere.
Of course it should be repealed. The business of government, especially the tax authority, is not encouraging or discouraging one lifestyle choice over another (owning versus renting in this case).
Sounds like a good reason for renters to become homeowners. Everyone can buy a home if they want one. they might have to learn to live within a budget, or make some other sacrifices.
Some chose not to do so, let em weep
There are reasons for renters to be renters, but they shouldn't have to subsidize homeowners. The government shouldn't favor one group over another using tax policy.
There are reasons for renters to be renters, but they shouldn't have to subsidize homeowners. The government shouldn't favor one group over another using tax policy.
Or, renters should also be given a tax deduction for renting. After all, mortgage interest and rent are functionally the same. Getting a mortgage is simply renting money from a bank to live in a house.
As to repealing the deduction - shall we speculate as to the impact this might have on the housing market?
I, for one, couldn't care less about what would happen to the housing market. The government's role is not to artificially impact the market for anything.
As to repealing the deduction - shall we speculate as to the impact this might have on the housing market?
The deduction is a subsidy from the government given to homeowners. It is a form of government intervention into the real estate market. As such, it distorts the market by inflating the value of homes. The subsidy incentivizes people to buy homes, hence the demand for homes will increase, hence the price of homes will increase. Remove the subsidy, and the incentive to buy homes based on the subsidy disappears, and prices will go down. People will still be buying homes, but their decision will not be influenced by the fact that they will get a government subsidy. Their decision will be based on their actual need for the home and whether they have the income to afford it. In other words, it will make the real estate market and housing prices rational again.
Honestly, when I saw this I said "No way!". Then I read the arguments and I somewhat agree that homeowners get a break that renters don't. On the other hand, if I didn't get the taxes and interest deduction on my house, there would not be much incentive for me to own it. I'd just as soon rent and let someone else take care of all the maintenance headaches. It would have a huge impact on the housing market. And I do care about it because it affects my options.
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