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I have never figured out why we have that tax break although I will be the first to admit to taking it. But what is the reason for having it? I think it should be phased out just as credit card and loan interest deductions were. People who have a mortgage now on their primary residence can keep it but when the home is sold again, no deduction for a new mortgage. And it should be ended for all second homes now. In fact I think all the deductions should be eliminated and rates lowered for everybody under a certain income.
Tax deductions like this one distort the true cost of goods and services. The government seeks to change our behavior. People should buy homes because they want one and can afford them. Without ANY incentives from the government.
I want the mortgage deduction, the dependent deduction, etc. removed from the tax code. Not suddenly, but phase them out, some more quickly than others.
I find it offensive that a government official, elected or not, tries to use a carrot to get good citizens to do something they might not otherwise do.
The mortgage interest came about to stimulate people into buying homes rather than renting apartments... there was a strong lobbying group from real estate agents, title brokers, attorneys, etc etc to get this put in and it did stimulate people to buy more homes... the government thought people should buy homes and provided an incentive for them to buy homes without the government actually using their own money directly to do it... who wins? Everybody, including the government who wanted more people to own homes since they didn't have to pay anything for people to do it (ie tax credit)...
So you want to phase out mortgage interest deduction.... good luck....
I don't get this part... you want all deductions to be eliminated but you aren't saying anything about the tax code... the tax rates are as it is because of the deductions but you "inadvertently" left that out... and then you mention "rates lowered" what rates? Mortgage interest rates? Right now mortgage interest rates are around 4%... the government doesn't control the rate because the rate is dependent numerous factors including this important one, the government doesn't make the loan to you... opps... and then you add "under a certain income", I am sorry but is making more make you less of an American citizen? Why should one American benefit and another one doesn't? Does that make sense to you? I take it you don't believe equal treatment for all Americans...
The reason it has been is to encouage homeownership.Not any different than FED keepig interest rates low now really. Like healthcare benefits its day is likely coing. because of tax code growth.A income based on total compensation is more and more likely in the future:IMO.
Any conversation around amending MID now would be crazy. I don't know the numbers behind how much money in the financial sector is based off of mortgages but I am willing to bet a s**tload and the basically take away a pretty good incentive for buying in this economy would be insane. That and the person who did it would NEVER be re-elected and that's the whole reasoning behind their decisions now right?
Tax deductions like this one distort the true cost of goods and services. The government seeks to change our behavior. People should buy homes because they want one and can afford them. Without ANY incentives from the government.
I want the mortgage deduction, the dependent deduction, etc. removed from the tax code. Not suddenly, but phase them out, some more quickly than others.
I find it offensive that a government official, elected or not, tries to use a carrot to get good citizens to do something they might not otherwise do.
As much as I would hate to loose it, I agree. This is another approach for using the tax code for social enginnering and to drive specific behavior. I would suggest we eliminate ALL deductions (standard deduction, personal exemptions, dependant (child) deductions, charity) and go to a flat income tax (ore preferrably a sales tax) across all incomes, at a lower rate than our current rates. Get the da*n tax instructions to 1/2 a page, rather than ~100 for the 1040.
Same reason we don't tax drugs or food. It adds costs to something that is every human is involved with which is housing. It would raise the cost of where you live whether it's an apartment or a home.
Stockholm syndrome at work;"why isn't xyz taxed?" rather than "why are we being taxed on xyz?"
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