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"Obama wants to reduce the rate by which wealthier people can cut their taxes through deductions for mortgage interest, charitable contributions, local taxes and other expenses to 28 cents on the dollar, rather than the 35 cents they can claim now. Even more money would be raised if the top rate reverts to 39.6 percent, as Obama wants."
I don't think President Obama is really trying to fix the housing crisis at all. What's the purpose of buying a home when he's cherry picking who gets to take the full mortgage interest deduction who's going to lose a significant portion of their mortgage interest deduction.
So I have 30K in mortgage interest. He's want to raise the top end of my income to almost 40% and will only let me deduct 28 cents on the dollar. That's like a "double tax" hit.
But someone in the 28% tax bracket will get to deduct the full 28 cents on the dollar of their mortgage interest.
How's this going to solve the housing crisis? The wealthier people lose incentive to buy more homes.
Why doesn't Obama just get rid of the mortgage interest deduction all together than? That would be the best way to raise the most revenue and make people "pay their fair share".
You want to guess how many foreclosures you will see if people cant deduct their mortgage interest?
We just need to bulldoze all those foreclosures. That's how you clear inventory. It's all about supply and demand. If you get rid of the excess supply by bulldozing it, than you increase demand.
People who cannot afford their mortgages can got back to renting.
Why is Obama trying to squeeze tax dollars at the worst possible time?
Even if Obama were to tax 100% of all incomes above 200K, this would not even cover the budget spending he's proposing. In order to cover his trillion dollar spending, he would need to tax 100% of of all incomes over 75K.
I'm not necessarily opposed to the tax hike. But I am opposed to reducing the mortgage interest deduction. There is all kinds of relief for people who took on mortgages they couldn't afford or they weren't paying -- the folks who actually pay their mortgages should not be penalized. Also, when they made their calculation about what they could afford, they took the mortgage interest deduction into account. This should only apply to new mortgages.
I agree ... those who took a mortgage took that mortgage interest deduction into account. In fact it was a big incentive from the govt to buy a house. I think its very unfair to take it away from people with existing mortgages.
About 20 years ago, a luxury tax was instituted. Supporters said rich people don't worry about taxes when buying luxuries and it was a " win,win" situation.
I sure didn't "win" when 300 of us got laid off at a local boat building plant cuz orders for cabin cruisers dried up.
Obama's entire agenda is wealth redistribution. He ran on this platform, and he's going to find every way he can to do it-- selectively raise taxes, close loopholes, disallow deductions. He made this promise and he's determined to keep it, seemingly more than any other. But he's not just taxing the rich; he's gut-punching the middle and upper middle classes. This will crush people in high cost states, where a $200K household income barely buys a starter house with a $5000 mortgage and a $10000 property tax bill. These people already pay a lot of taxes, and they need every penny to keep making those payments.
Are you really saying that the people in trouble with paying their mortgages are the ones who would be affected by this tax change? And by letting the Bush tax cuts expire? That's absurd. And you really think that the housing crisis will be exacerbated by reducing the mortgage interest deduction? Those who are having problems paying aren't paying mortgage interest because they're not paying their mortgages!
All I ever hear from conservatives is "mine! mine! mine!" and no real ideas about how to fix the problem. Tax cuts *don't work* to stimulate the economy. Trickle down economics was an abysmal failure for all but the extremely wealthy. I can't believe that after the complete and utter failure of conservative economic policy you're still saying that you know the way. Nuts.
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