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AFAIK there has always been one. Used to be that you could deduct credit card interest too. The standard deduction wasn't always available however and at least for us this keeps us from having to itemize deductions which is always a plus!
It probably should be eliminated but is so ingrained it would take far more political courage than currently exists. If it happened, it would probably have to come along with a reduction in overall rates. Repealing it though would throw the housing market into a whirlwind.
Flat tax on gross income, no exemptions, deductions or credits, one-half page tax return, no other forms, all IRS efforts focused on full and accurate reporting of gross income.
... unicorns and candy canes ...
The income tax code has much less to do with government revenue than it has to do with influencing people's behavioir and putting everyone at legal risk. And there's a reason for it.
At any rate, highly unlikely that mortgage interest deduction will be scrapped.
Five million six-hundred thousand words and counting, just like the national debt ...
the origonal deal was they taxed you on interest you received and you got to deduct interest you paid.
after they slashed income taxes by almost half they only kept certain big ticket item interest you pay , homes being one of them..
many renters already benefit from the tax system as is because as an example a couple gets 11.800 in a standard deduction. a renter may shell out a few grand and walk away with the rest of the deduction as a bonus.
they can get money back from that deduction they never spent .
the home owner more than likely spent that 11,800 over and above the cost of the house and gets back maybe a buck for every 4 spent.
the renter potentially may have more in his piggy bank after tax then the homeowner.
Last edited by mathjak107; 08-11-2012 at 07:36 AM..
It probably should be eliminated but is so ingrained it would take far more political courage than currently exists. If it happened, it would probably have to come along with a reduction in overall rates. Repealing it though would throw the housing market into a whirlwind.
I would imagine the prices of homes would come down because so many people depend on the tax break. When we were looking at a house recently that was at the top of the price range we qualified for, the agent reminded us how "affordable" it actually was because of it.
Flat tax on gross income, no exemptions, deductions or credits, one-half page tax return, no other forms, all IRS efforts focused on full and accurate reporting of gross income.
The income tax code has much less to do with government revenue than it has to do with influencing people's behavioir and putting everyone at legal risk. And there's a reason for it.
actually i remember seeing that homes reached a point that they offer the greatest affordability in 50 years because of rates. historically mortgage rates are 2x what they are.
that doesnt mean we have jobs so we can buy them. it only means that mortgages have driven the montly cost down to levels not seen the last 50 years inflation adjusted..
All it did was drive up mortgage principles since people just bid higher for housing. Its a big subsidy for finance. Now perhaps some bean counter can come up with a formula as compensation in tax credits and phase this crap out. People did price in the tax benefit when they bought so some compensation seems reasonable.
So you think da guberment needs its own valueless, fiat currency back from us? You think it collects "revenue" when it gets its own wads back? No, it collects real taxes went it spends. If the Fed raised reserve ratios da guberment may not need to collect them at all.
Why most of this country acts like we are on a gold standard just blows. How can you have the same exact perspective after the end of the domestic metallic standard and after Brenton woods? That's like saying Noah didn't need a boat cause things will remain basically as they were. Da guberment does not go around scraping for commodity credit instruments used in the open market. They don't need our money. They create the money, which was originally a fungible IOU for gold and silver much like a bank note.
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