Should deductions for mortgage interest be kept? Would losing them affect your family?
As Congress and the White House negotiate the first major tax rewrite in decades, it would appear that deductions for mortgage interest may be on the chopping block.
“Members of both parties have largely steered clear of detailed proposals so far. But plans put forth in the past year by President Obama and Mitt Romney to place limits on annual total tax deductions would likely crimp the mortgage-interest deduction for certain taxpayers. Top congressional Republicans also have expressed openness to limiting total tax deductions as part of an overall budget deal. In addition, the presidentially appointed Simpson-Bowles fiscal commission suggested scaling back the mortgage-interest deduction as part of its own set of tax-related proposals. “
“Current law allows homeowners to deduct the interest paid on mortgage balances up to $1 million, including on second homes, as well as on $100,000 worth of home-equity loans. The deduction overwhelmingly benefits wealthier families, partly because they tend to have larger mortgages and pay more interest, and partly because most low- and middle-income Americans do not itemize deductions on their tax returns. It also tends to favor homeowners on the East and West Coasts, as well as those in large cities such as Chicago, where average home prices are higher.”
“Edward Kleinbard, a tax expert and law professor at the University of Southern California, said the mortgage-interest deduction represents the kind of government “extravagance” that the country no longer can justify, given its fiscal troubles.”
“ ‘We simply cannot afford wasteful government subsidy programs anymore, and this is one of the most important examples of that,’ Kleinbard said. “It’s very much a subsidy to those Americans who need it least.”
“True enough, said Moody’s chief economist Mark Zandi, but the deduction nevertheless has become ingrained in the psyche of home buyers over generations, and reducing it would have real effects. “
“ ‘It’s a very visceral thing for people,’ Zandi said. ‘People account for it when they think about how much house they could afford to buy. You take that away, and house prices are going to weaken. They are going to decline.’ ”
So I am wondering how families feel about this deduction. Is that deduction an important one to your family? Would you miss it if they took it away? Are there other deductions that would hurt worse than that one? Do you think it should be on the table? Do you think it would hurt an already struggling house market to change it now?
Tell us what you think about the site
Customer Care »
Vacation stops, manage subscriptions and more
AJC Services
Sections
Other Editions
Visitor Agreement | Privacy Statement
© 2013 The Atlanta Journal-Constitution
120 comments Add your comment
missnadine
November 28th, 2012
11:25 pm
I would hate to lose that deduction! To me it is about $15 k for the year. I think they they should reduce, but maybe just take away from the option on a 2nd home, or home equity.
A reader
November 29th, 2012
1:45 am
The difference between taking that “standard” deduction and an itemized deduction is HUGE for most middle class American’s. If you rent, you generally cannot take itemize deductions. If you have a mortgage,then you generally can. For the average middle class taxpayer, losing this deduction would be devastating. Not only extra money owed, but also the feeling that owning the house is worthless, especially if it is underwater. Basically, if the government takes away THAT incentive then there is no reason to buy or own a home in this economy.
I have no issues with limiting the deduction. That is a WHOLE different story. I have NO ISSUE with limiting the deduction to say $50,000 of mortgage interest. That would mean that your house is worth at least $1 million dollars. That is WAY beyond middle class. If you can afford that kind of house then you mortgage tax “incentive” should be limited.
But everyone in DC talks at extremes. One group always tries to scare the taxpayer by saying the other evil group will cause havoc. Whatever
Anonymous for this one
November 29th, 2012
5:36 am
The deduction is the ONLY reason I’m a homeowner instead of a renter. There would be no incentive for homeownership (especially now) without the deduction.
FCM
November 29th, 2012
6:40 am
It will hurt middle class America for sure. I only bought my house a few years ago and that deduction is part of what allows me to pay for child care in the summer when I work. They need to cut SPENDING in needless programs first.
catlady
November 29th, 2012
6:42 am
I strongly support removal of the mortgage interest deduction. It is another form of welfare, and, remember, we are all about ending entitlements!
catlady
November 29th, 2012
6:47 am
I mean, it’s “socialism,” isn’t it, to use MY money to pay for something that YOU want? As it is now, non-homeowners are subsidizing the taxes of others. To quote some others, “Show some pride; do it on your own, and stop freeloading off others!”
Gail
November 29th, 2012
7:25 am
It really wouldn’t bother me at all if it were taken away. The only reason we itemize is because it helps us on our state taxes. The impact is lessened with interest rates so low. I guess if you were a single homeowner it might make a difference but for a married homeowner with the standard deduction at over $11,600 I don’t see the loss hurting that much. As the article said, most low and middle income people don’t itemize.
The deduction just reduces your taxable income. And,contrary to what some people will have you believe,most people’s effective tax rate is 15% or less. In 2009 the average tax rate for 80% of people was 15.1% or less.
But, maybe they should start with taking away the 2nd home and home equity deduction.
Van Jones
November 29th, 2012
7:26 am
Catlady, where do non-homewoners live? Do they rent? From landlords? Landlords whose total cost of ownership is lowered by deducting their mortgage interest? If the mortgage interest deduction goes away then rents go up.
Either way is fine with me as long as it applies to everyone. We all need a little skin in the game.
Parent
November 29th, 2012
7:30 am
I think they should do away with the mortgage interest deduction. Sure it would mean my taxes would go up some, but I think we all need to be part of the solution. What is the purpose of the deduction? To help people become homeowners? The benefits don’t start until you make at least $50,000 per year (due to the standard deduction). If you can’t afford the house without the mortgage deduction, then you probably are in too big of a house. The people who benefit the most are people who own $1 million dollar houses and second homes and luxury yachts and motorhomes (yes, they can be claimed) – these people don’t NEED the deduction.
By the way, I am also for a minimum 5% income tax on ALL people, regardless of how little they make and I am for the abolishment of the EITC. I am also for taxing capital gains at the same rate as any other income.
Georgia
November 29th, 2012
7:35 am
a home is such a huge expense with maintenance thrown in. Have you ever calculated the yearly cost just to mow your lawn? Removing the home interest deduction would be a market killer, and what’s left of our economy would flush down the average home’s puny 1.6 gallon toilet. (another issue for another day)
Jeff
November 29th, 2012
7:37 am
You can raise all the taxes you want, but history tells me they’ll spend it and even more.
We are broke. Plain and simple. It’s time for EVERY government department to take an across the board cut. Not a fake cut in the rate of growth. A cut. 2%, 5%, whatever. Everyone.
Then again, we deserve the government we elect. In the most basic sense, they are representative of us, narcissistic, greedy, living beyond our means, entitled, procrastinating, blaming everyone else, etc etc.
Marc Faber
November 29th, 2012
7:37 am
Well, Mother Jane Goose? You love to talk down about people who are on food stamps – getting a “hand out” yet I’m sure you love that mortgage deduction. I’m curious to read her justification….
Rodney
November 29th, 2012
7:47 am
I PREFER to rent, so I don’t really have a dog in this fight. This tax credit seems to be the only reason people keep pushing me to buy a house/condo – when I calculate what I don’t have to pay for by renting (lawn care, much higher insurance than renter’s insurance, maint costs, etc) I come out way ahead in the $$ game by renting. With way fewer headaches – toilet breaks? Call the landlord. Outdoor lighting blown? Landlord.
Things might be different were I married with a family, but as it is, renting is preferable.
Mayhem
November 29th, 2012
7:58 am
How is it a handout? I paid my mortgage every month, on time. Yes I take the interest deduction, as I write off a good bit. It won’t hurt me if it’s changed. I can manage my money. We have no debt other than the house. No credit cards, and our cars are older and paid for. I do write off the ad valorem on the cars that are in my name.
I agree with Jeff. EVERY government department needs to take a reduction. And our elected officials need to start taking care of us, as we elected them to do. But now, all politics is, is a power hungry group of idiots, who have no clue how to live within their means. It’s called a budget. When you run out of money, stop spending. Don’t go looking for more money to spend, just stop. That’s how the average American does it. Oh wait, no they don’t. They run out and put something on a credit card. There you go. Add up the debt, figure out how to pay it off later……
Laurie
November 29th, 2012
8:12 am
I am a middle class home owner, and taking away this deduction would hurt, but it wouldn’t kill me. I have no problem paying my fiar share to keep our country going. But I hope that congress looks at other areas of our tax code that favor one group over another. For example, why are capital gains only taxed at 15%? Investment income is just that, INCOME. Also, refundable earned income credits and child tax credits need to be looked at as well. The government should not be in the business of paying people to work low wage jobs, nor should they be rewarding people for having a bunch of kids.
Out by the Pond
November 29th, 2012
8:14 am
The interest deduction is one of the biggest cons that the banking industry has pulled on the American public. Where is the logic that I give a bank $1.00 so I can get back $0.25? When RR eliminated interest deductions for consumer debt the public were coned into adding debt to their homes. It became a habit and when the housing market made a correction, many found themselves upside down on their mortage. The MID has enabled some to become home owners who other wise could not aford to, but it also enabled those who had no business purchasing a home the opportunity to do so. So now we have a glut of vacant homes. Limit the MID to $15,000, and eliminate second and third homes.
Parent
November 29th, 2012
8:14 am
“Landlords whose total cost of ownership is lowered by deducting their mortgage interest? If the mortgage interest deduction goes away then rents go up”
I hate to tell you, Van Jones, but it doesn’t work that way. When you rent your house, it becomes a business and is subject to depreciation schedule, so you not only get to write off the interest, but the principal also. That would NOT go away, since it is part of how you calculate profit for a business.
motherjanegoose
November 29th, 2012
8:15 am
Well, we owe less than 7 years on our mortgage and so, for me, it would not be critical. Not good for my kids though.
Our country is in trouble and no one wants to kick in any more $$$. it is a finger pointing game.
I am not an economist so I cannot speak of the ripple effect of cutting out that deduction, with any credibility. I do think the housing industry has a strong effect on the economy and I personally think homeowners make better neighbors than renters, as you are invested in your property and you do not just fly the coop when you feel like it. They are also more committed to the schools in the neighborhood. This is why some areas fight apartments.
People that buy houses tend to be more stable and better at managing their money, so we are punishing them? Oh that’s right, we are punishing the people who make good choices to give their $$$ to those who make bad choices. Now, I remember.
What does this mean Georgia: Have you ever calculated the yearly cost just to mow your lawn?
We mow our own but we do have it sprayed for weeds and such. Truthfully, we put in $3000.00 worth of sod last summer as the trees matured and the shade was killing our back yard. We have been here 15 years.
We are looking into MAYBE buying a condo for vacation. This would impact that decision for sure. It is not something we have to have but thought it would be nice for our children. I think investors would be up in arms about this. Many people rent a condo for their vacation and that would be impacted too.
DB…we need your help here!
Mayhem
November 29th, 2012
8:22 am
We will never own another home again. After this one, we plan on renting a bungalow on an island in off the coast of South Georgia.
Out by the Pond
November 29th, 2012
8:22 am
People who earn their money through investment and pay Capital Gains rather than income tax, also skip paying Social Security and Medicare taxes. Eliminate the difference between passive money, investment, and active money, that which is created by labor and most of our financial problems will be solved. History has shown time and again that lower taxes does not create jobs or expand the economy.
Jeff
November 29th, 2012
8:27 am
Laurie, I understand that at face value, 15% on investment income doesn’t seem fair. But if I have saved my money (after paying income taxes, medicare tax, state tax, etc) instead of spending it (and paying a 7% or so sales tax on a purchase), why should the government get another cut of the money I invested, spent time researching, saved (delayed gratification) instead of spent (immediate gratification)?
For me, the real question comes down to, at what point has the governmetn taken enough of a dollar I have earned? They took it on my paycheck, they took some of what’s left over in sales taxes when I buy, the take some of what’s left over when I earn interest on a savings account, they take some of what I’ve saved when I die in an inheretence tax, on and on and on. Yet we’re STILL BROKE. Why should I believe for a second that if I give them more money, we won’t still be broke?
EG
November 29th, 2012
8:41 am
Keep the mortgage deduction, and get rid of the arbitrary $110K income cap on SS taxes.
Parent
November 29th, 2012
8:49 am
I agree with Jeff that there needs to be serious cuts, AS WELL as revenue increases. But be careful when you talk about where to cut. Social security and medicare each have dedicated revenue streams that should be balanced to get them on a stable long-term balanced budget (internally). Social security only needs small changes to make it self-sustaining (if Congress doesn’t default on what the US owes SS) – maybe a small increase in the retirement age or put autoimatic COL increases on hold for a few years (or both). Medicare is awash in red ink and I believe that they need an immediate large increase in the Medicare tax to make it self-sustaining, Over the past 20 years, medical costs have increased over 300% while wages have only gone up 70%. So we are not taking in enough in taxes to pay for increased Medicare expenses. Add in the Midicare Pard D which seniors are enjoying today that never paid ANY tax (and still we don’t) to cover it. It needs to be rescinded for current Medicare recipients and implemented in degrees AFTER tax increases to pay for it. Another program that has dedicated funds is the Highway transportation program – taxes from gas taxes should fund this and it should be balanced – if you want more road construction/maintenance – increase the gas tax. The rest of the budget is fair game for cuts (and should be cut). Of the remainder, Defense (all programs) accounts for 40%, interest for 17% (have to pay that or default on Savings Bonds), medicaid is about 11% and welfare is about 9%.
Dan
November 29th, 2012
8:53 am
“Why should the government get another cut of the money I invested…?”
The government doesn’t get “another cut” of your money. Capital gains tax is paid on…wait for it…capital gains, not principal investment.
Parent
November 29th, 2012
8:53 am
“But if I have saved my money (after paying income taxes, medicare tax, state tax, etc) instead of spending it (and paying a 7% or so sales tax on a purchase), why should the government get another cut of the money I invested,”
You DO NOT have to give the government another cut of that money. YOu only have to give the government a cut of the INCOME that the money generates for YOU, just like I give the government a cut of the income that my WORK generates for me. All income spends the same.
Alberta
November 29th, 2012
8:54 am
Conservatives hate subsidies. Why stop with mortgage interest deduction elimination? Let’s get rid of deductions for medical/dental expenses, real estate tax, personal property tax, and miscellaneous job expenses. And while we’re at it, let’s get rid of the Gifts to Charity income tax deduction, too.
One can’t make an argument that one subsidy is bad and yet another one should stay. A subsidy is a subsidy, plain and simple.
Parent
November 29th, 2012
8:56 am
“Keep the mortgage deduction, and get rid of the arbitrary $110K income cap on SS taxes.”
The problem with this is: SS is based on how much you put in. Yes, the taxes are capped at $110,000 but also the BENEFITS are capped, also. If you taxed the higher earners, then, according to the way the program is set up, you should return more money to them, also. That doesn’t help anything.
Van Jones
November 29th, 2012
8:56 am
I hate to tell you, Parent, that it differs based on whether you own a rental house next door or an apartment complex. Apartment complex – probably a business. Rental house(s) next door – probably not. The business tax code is another animal entirely.
Mayhem
November 29th, 2012
8:57 am
CASH!!! They can’t tax the cash stuffed in the mattress. LOL.
They can tax your investments, as you have made money on them (dividends), and it’s considered “income”.
I also believe that once you hit 75 years of age, you should NOT pay another dime in taxes. Consumer tax yes, but no capital gains, investment taxes, etc. You should be able to keep everything you have worked hard for.
Also, quit taxing the inheritances. It’s NOT income. It’s what someone worked their entire life to save, and pass it down to their children. They have already paid the taxes on all that money. And when I inherit my parents money, I’ll get taxed on that.
Whatever happened to to Fair Tax?
Parent
November 29th, 2012
8:58 am
“And while we’re at it, let’s get rid of the Gifts to Charity income tax deduction, too. ”
I agree with that. If you are only giving to charity because of the tax deduction, you aren’t very charitable. The way it is now, you force the government to contribute to your charity also.
Parent
November 29th, 2012
8:59 am
“Rental house(s) next door – probably not”
I have rented out a house that I used to live in – it works the same as if you own an apartment complex. I know what I am talking about.
Van Jones
November 29th, 2012
9:15 am
“I know what I am talking about.”
Bless your heart. Of course you do.
Techmom
November 29th, 2012
9:19 am
I don’t have a problem with limiting it but I do think it’s going to hurt the middle class. Personally I think it’s going to be a huge hit to the housing market by taking away an incentive to actually buy.
@Parent – renting out a house you previously lived in may make you a landlord but it does not make that house a business write-off. It is considered a passive activity and is limited by AGI.
Techmom
November 29th, 2012
9:28 am
@Parent – do you have a real estate license or multiple rental properties? The rental loss deduction begins being phased out when your AGI is $100k and is totally gone at $150k. Unless you qualify as a real estate professional or the properties were bought under a business, the losses of a rental which are considered personal property are limited. This law typically does not impact the real estate investor b/c they likely bought houses specifically as investments under a business entitiy. It hurts homeowners who moved but could not sell their previous home (hello crappy housing market).
http://www.wemanageproperty.com/askthecpm/?page_id=21
An Accidential Professor
November 29th, 2012
9:34 am
Both my ex husband and I make about $50K per year. I live in a reasonable home and pay a fair amount of taxes. He has a mortgage that costs over $20K per year which means that he pays absolutely no income taxes and enjoys a massive refund check. He is the 47%. It hardly seems right to reward people for living above their means.
ATL Born and Raised
November 29th, 2012
9:39 am
@Van Jones
A house you rent out still goes on the schedule C on your personal income tax return as a business deduction. All expenses are fully deductible including mortgage interest.
Mayhem
November 29th, 2012
9:52 am
@Accidential – why does he not pay income tax? Is he working? How do you not pay income tax when your mortgage is over $20K per year??? can you please explain?
An Accidential Professor
November 29th, 2012
9:59 am
He pays taxes through payroll but because of his mortgage interest, the total deduction offsets his tax obligation. He gets back every dime he pays in his refund check. And brags to me about it!
Tom
November 29th, 2012
10:10 am
The discouragement of private home ownership is just another key to the emergence of the socialist/Marxist “utopia” the current administration and its enablers envison for our country.
Mayhem
November 29th, 2012
10:15 am
@Accidental – thank you. Couldn’t wrap my brain around that one….LOL
Tom – I agree!!!! You can thank the Entitlement Generation for that. They don’t want to work, they want everything handed to them, and that’s the people who voted for this current administration. Nancy Pelosi, Harry Reid, Obama….they all scare the crap out of me.
the red herring
November 29th, 2012
10:23 am
yes do away with mortgage deductions– in fact do away with all deductions and let’s have a low and fair tax rate on everyone above the poverty line. why should people with nice houses get tax breaks for borrowing money. if they can’t afford the house and interest on it then they shouldn’t buy until they can. if that lowers the price of real estate and slows down the real estate market then perhaps more people can buy at lower prices and not have to depend on an deduction for interest they pay on the home. let’s level this playing field across the board–not just on 200k and above. the takers need to have some skin in this game rather than just live off the taxpayer. politicians should stop buying votes with taxpayer money.
Denise
November 29th, 2012
10:29 am
It would impact me because I have few other deductions besides that, those from payroll (SS, etc.), and charitable gifts. Losing tax deductions on charitable gifts would impact me more because I give more to the church than I pay in interest. My house is old and small so my mortgage is inexpensive, just like I like it. I live far below my means. I do not believe anyone owes me anything and work very hard for my money and make quite a bit of it…and save quite a bit of it. I am not a part of the Entitlement Generation and I voted for Obama. What a surprise! So, no Mayhem, not all people who vote for President Obama are freeloaders. I really get sick of that assumption.
iRun
November 29th, 2012
10:41 am
I think it’s fine…the way they’re talking about doesn’t sound like it will hurt middle class folks. The current set up is a total tax shelter for the upper income folks and it needs to be shut down.
Teacher, Too
November 29th, 2012
10:49 am
I would be hurt. I finally, finally bought my first home at age 46, and I am looking forward to being able to itemize. If I lose the deduction, then why did I purchase a home if I could spend the same amount of money and rent? When the apartments get run down, just move to another one– no worries about having to sell a home. The incentive to own tends to go away.
Maybe, instead, put a cap on the amount of the deduction.
who knows what evil lurks in the hearts of men
November 29th, 2012
10:51 am
@Anonymous for this one…..If the interest deduction is the ONLY reason you have purchased a home instead of renting, you’re not very financially bright.
What you’re telling me is that if you were 25 and had an income tax rate of 15% and you could get into a $200K, 30 year fixed mortgage with a 3.5% interest rate, you would pass on buying a house and paying $900 a month for that house because you wouldn’t be getting an $87.50 tax break in the first month of the mortgage that decreases every month after that. Even though if you stayed in that house for the next 30 years and ended up NOT having a house payment AT ALL at the age of 55, because you didn’t get an $18K tax break OVER 30 YEARS…you think it’s better to just rent for the rest of your life. Even if you got a $100 break each month in renting vs owing and you put that $100 in the bank and earned a safe 4%, at the end of 30 years, you’d have 60K in cash vs a house that was worth $200K if it never appreciated a dime. That 60K will earn you $2400 a year in interest at the same 4% rate and you’ll still be paying your $800 a month in rent until the day you die.
Seriously…you’ll only buy if you get an interest rate deduction? Do you lease cars and get your appliances and TV’s from RTO because the government won’t subsidize those purchases too?
DB
November 29th, 2012
10:53 am
The whole thing is such a mess, it takes smarter people than me to figure it out. Personally, I’m a huge fan of the Fair Tax. No tax code should be this complicated that it takes someone going to school for 5 years (that’s what it takes for a CPA these days) to even begin to figure it out. The mortgage interest deduction only applies to the first $1 million of debt, and the first $100K in home equity. With interest rates these days, someone with a $1 million loan with a 2.75% interest rate, a $1 million loan has a little less than $25,000 in interest. So we’re not talking about collecting monies on multi-million dollar mortgages, here. Would the mortgage deduction be eliminated across the board for investment housing, too? What about for businesses — should businesses get the expense deduction for mortgage on property their business holds?
I do think it’s ironic that a President who basically lives in public housing should be lecturing us about mortgage deductions. :-)
With interest rates this low, it won’t have as much of an impact. However, when (not if) interest rates begin to rise, THAT plus the elimination of the deduction is going to do a number to the housing industry that would make the current short-sale bubble look like a hiccup. How many of us remember the housing interest rates of the Carter years, when interest rates were 15-18%? The only segment of the population that this is going to have a significant impact on is the middle class — the ones who buy the less-than-million-dollar mansions (or, in some cases, $1 million hole in the walls, like in NYC!) It’s not going to affect renters. lifestyle It’s not going to affect the wealthy’s lifestyle. But it WILL affect the quality of life for the middle class.
who knows what evil lurks in the hearts of men
November 29th, 2012
11:01 am
I think the government should just cap the amount of itemized deductions people get. If they want to pay off their houses and give a boatload to charity and write that off, that’s cool with me. If they want to use it all up on because they want to pay a bank $3K a month in interest so that they can get a $450 a month tax break, go nuts.
but if you think about it……let’s say some couple who fell on some bad times and got behind on some payments and finally gets back on their feet and each earn $75K a year for a household income of $150K a year job decides to buy a $400K house at a 7% interest rate, they’re paying the same in interest as someone who makes $500K a year and buys a $800K house. Is that really sending the right message? I would think that just tells those folks who are most vulnerable to overspending that the government encourages that.
So just cap the amount of itemized deductions eligible to EVERYONE and there will be no judgement as to who “deserves” to be eligible for them and who isn’t.
who knows what evil lurks in the hearts of men
November 29th, 2012
11:08 am
@DB..the tax code is not so complicated that the vast majority of tax payers need a CPA. Trust me…I know…i am one. The reason people pay a CPA is not because they can’t do it on their own, they pay me for the same reason I pay a plumber.
I’m smart enough to fix my toilet, but I’m not good at it…I have no aptitude for it….it would take 5 times the amount of time and aggravation as the plumber…and quite frankly, I can make more by doing tax returns in the amount of time it would take me to do the plumbing job than it would cost me to pay the plumber.
Fear is why most people go to a CPA…not lack of aptitude of complexity of the code. Oh and H&R block promising to give you a loan against your refund is anything carrot that is dangled and marketed quite well.
who knows what evil lurks in the hearts of men
November 29th, 2012
11:10 am
The mortgage interest rate was never intended as a deduction to last in perpetuity. By definition, as you pay down your loan, your deduction is supposed to reduce as well. The reason the deduction was passed into law was to incentivize people to buy a home AND PAY IT OFF so you didn’t have a bunch of old people with limited income resources out on the street because they couldn’t afford rent on a place they don’t own.
usually lurking
November 29th, 2012
11:16 am
If you need the mortgage interest deduction to afford the house, then you are buying a house that you cannot afford. Just my opinion.
MANGLER
November 29th, 2012
11:21 am
To the people who argue that removing the mortgage interest deduction is a game changer or will kill them or the market … you bought too much house! That’s your fault.
Apartment complexes won’t rent to you if the rent (and sometimes utilities and other fees) exceeds 33% of your income. That is a way to safeguard them as well as you. Banks used to be that way, but then loosened the minimum requirements over time, with help from the Government with things like the mortgage deduction. If your budget was so close on financing that house that a minor change like this would sink you, then you never should have placed yourself in that situation to begin with. Home ownership is rife with the unexpected.
I realize that the mantra changed to “what’s the most I can possibly afford?” Well, now ya know.
The houses being designed today are not the SUV’ish McMansions that cropped up all over in the early 2000’s. They are looking like normal houses again. We needed that.
Tom
November 29th, 2012
11:22 am
Anyone remember tax criminal Timmy Geithner telling George Staphoccocus that Bill Gates shouldn’t get the same deductions as everyone else because “he doesn’t need them”, or wtte?
That, ladies and gentlemen, is a cornerstone of Marxism…..
“From each, according to their means….to each, according to their needs.”
Teacher, Too
November 29th, 2012
11:29 am
I didn’t buy a house I could not afford. It’s would be nice to be able to take advantage of itemizing after 25 years of not being able to. The deduction is one reason that makes buying a house so attractive.
Theresa Walsh Giarrusso
November 29th, 2012
12:02 pm
I am so proud of how seriously everyone is taking this discussion — I think it’s a great discussion of issues!!
who knows what evil lurks in the hearts of men
November 29th, 2012
12:19 pm
@Mayhem…It is a handout. All things being equal…if you and Rodney have exactly the same tax situations, but he decides to rent and you decide to own and get a mortgage, the government says that you are acting in a way deserves special…FAVORABLE treatment over Rodney and are going to charge you less in taxes. How is that not a handout?
I hear it all the time here, people are disgusted with folks in society who make choices they disagree with and the government financially rewards them for it. In this case, you just happen to feel that your choice is better and more responsible than Rodney’s so therefore you deserve the money the government is giving you.
Package it however you want, but it’s still the government rewarding you for a choice…which generally seems to be frowned on by this forum…that is..unless the choice they are getting rewarded for is theirs.
missnadine
November 29th, 2012
12:27 pm
I agree to a point with the thinking that any deduction is an entitlement. It made me wonder about the right-wing faction on this blog. I would bet my paycheck that all of them have taken advantage of some credit, whether it was deducting the mortgage, taking the kid credit and so forth.
I don’t want to lose the mortgage interest, call it an entitlement if you will. I am not the person who comes on these blogs screaming about free phones and school lunches. Those who do should just NOT take any deductions, since they complain abou them on every blog.
HB
November 29th, 2012
12:30 pm
“People that buy houses tend to be more stable and better at managing their money, so we are punishing them?”
Oh yeah, they’re all much better at managing money — that’s why so many expensive homes are in foreclosure. A lot of us “less stable” renters made a choice 8 years ago not to borrow the max amount we could and buy a home with a small down payment amid predictions of a bubble burst because we know how to manage our money.
Of course, many homeowners are also responsible, but ending a tax deduction is not a punishment. Those paying off mortgages wouldn’t be taxed more than everyone else (punishment); they just wouldn’t get that perk anymore. Eliminating the deduction would likely slow sales, but that may not be a bad thing. Should the government be incentivizing home ownership to the degree it has? The deduction probably contributed to growing the bubble that eventually burst. Maybe real estate and banking/loans shouldn’t be as great of a driving force in our economy as they have been in the past 20 years.
who knows what evil lurks in the hearts of men
November 29th, 2012
12:31 pm
@Mayhem….I agree with you abou the inheritance tax though. I don’t believe that should be taxed either to the extent it has already been taxed.
But on the flip side, under current law only estates over $5M are subject to estate tax…so you stating that you’re going to be taxed on your inheritance implies that your parents are worth over that amount…so by deduction, you’re going to get $5M free and clear and then you’ll only get $650K for every million after that. You seem fiscally pragmatic…so I imagine with the $5M + you’re in line to get you’re going to live a pretty comfy life. I’m not saying you should get taxed on the excess…in fact I wholeheartely disagree with it…but if it offends you that much…if you parents want to write me into their will for all the $$ over $5M, I’ll gladly take the money and the subsequent tax burden off your hands. ;-)
james
November 29th, 2012
12:41 pm
Get rid of the mortgage deduction. You want to balance the
budget start taxing churches, colleges, non profits, etc….
Why should churches not pay taxes? It is a business despite
what they may want to tell you! I do go to church by the way….
Warrior Woman
November 29th, 2012
12:46 pm
Kleinbard is wrong – allowing taxpayers to keep more of their money is not a subsidy. Zandi is closer to correct. The current home market cannot afford elimination of the mortgage interest deduction. Further, home ownership is a, if not the, primary wealth building tool for middle class Americans, and the mortgage interest deduction supports such wealth building.
The mortgage deduction should not be eliminated. It should continue, at least for primary, owner-occupied homes.
DB
November 29th, 2012
12:47 pm
@who knows: My husband has a Ph.D. in accounting and absolutely despises taxes — won’t do them for anyone but us. You’re right, the vast majority don’t really need one — but the fact that they THINK they need one, faced with all the myriad deductions and allowances in the tax code today, is telling. It always blows my mind how many people would rather take the standard deduction than go to the trouble of figuring their deductions.
missnadine
November 29th, 2012
1:01 pm
@james – 10% agree on taxing churches.They are HUGE businesses!
missnadine
November 29th, 2012
1:01 pm
meant 100%, not 10% :)
who knows what evil lurks in the hearts of men
November 29th, 2012
1:02 pm
@DB…it’s funny…i actually have done quite a few taxes for CPA’s. They’re auditors and the last thing they want to do is taxes. It’s funny…people think accounting and taxes are the same. In my state, the state board of accountancy specifically states “tax preparation is not considered practicing accounting.” Even within the CPA circles..most know virtually nothing of taxes. It’s kind of like taking your kid to his/her pediatrician and thinking that doctor would be a pretty good surgeon too…I mean, after all, he/she is a DOCTOR, right?
And you’re right, it is telling. But knowing what I know about the perceived complexities of tax preparation vs. the actual complexities of tax preparation, especially given how many software programs there are out there, I feel as if it’s more telling about the people than the taxes. Now granted, there are some pretty complex issues, but as most neo cons will attest, 47% of the population don’t owe taxes so they don’t count…and in my experience, doing the taxes for a wage earner with a family, a home, d some stocks and a rental or two is as about as difficult and time consuming as a year’s worth of changing the oil in my car. Which, by the way, I have my mechanic do. ;-)
DB
November 29th, 2012
1:02 pm
@Mangler: Underwriting guidelines for mortgage loans used to be fairly strict — 25% of income towards a mortgage (which included withholdings for taxes and insurance), and a total of 33% of TOTAL debt including the mortgage (squeak up to 36% sometimes, if you were in an area where the land-to-value ratio was unusually high.) But mortgage companies and banks kept getting hammered for “unfair” lending practices when they refused to loan to someone who had a debt ratio of over 40 to 45% or even higher, and had expansion plans held in abeyance up while communities demanded “proof” that a bank was “fair”. (You do NOT want to know how many Community Reinvestment Act reports I’ve had to do!) So, make the loans, take the risk — and here were are with banks with portfolios full of loans that they would never have made prior to the CRA act in 1977 as the guidelines became looser and looser.
Houses almost became like cars, where an unwary buyer walks into a car dealership financing office, and the question they ask is “how much do you want your payments to be?” and end up with 7 and 8 year loan on a depreciating asset. Sex education in the schools? Ha – wow about basic consumer finance?!
Bobo
November 29th, 2012
1:08 pm
This is yet another case of the government becoming a criminal empire. Why not just go ahead and steal every last penny from every working person and let the dregs of society have it? Wouldn’t it just be more honest to hold a gun to our head and try to take it? Anyone who doesn’t own a $5 million mansion is struggling to pay everything already. Why not just take another $3000 to $5000 a year off everyone’s paycheck and give it to more unwed mothers cranking out 7 kids one after another, some politicians who need another Escalade for their mistresses, and some artists who produce obscene crap that offend everyone with a moral compass?
I don’t even want to hear about ‘mortgage interest was never meant as a permanent deduction’ argument. Our tax load is far higher than at any point in our history. You can call this democracy if you want, but a 40% individual tax rate is socialism. Take away the mortgage deduction and that’s where we are.
DB
November 29th, 2012
1:08 pm
@who knows: My husband isn’t an auditor, his niche area of specialization includes economics, statistics, historical reconstruction and forecasting, and business valuations. But for years, my father would ask my husband, around March or April, “So — are you pretty busy now?” Couldn’t get it out of his mind that CPAs = tax season. :-) After about 20 years, he finally accepted that my husband was swamped year round, not just in March and April!
Teacher, Too
November 29th, 2012
1:10 pm
Maybe there should be an either…or. If you are single without children, you get to deduct the interest from your mortgage. If you have children, then you get to claim your dependents but you don’t get to deduct interest from your mortgage.
I am single with no children. Until I bought my house, I could not take anything except the standard deduction. I’ve not ever complained, but I agree with those posters who’ve said that removing the interest deduction would cripple the housing market. The deduction is an incentive to purchase a home. Home ownership stabilizes neighborhoods, among other things.
As I said before, maybe limit the amount of the deduction to a percentage. It’s a compromise…
It would only affect...
November 29th, 2012
1:10 pm
…those of you earning “big bucks”…”limits on annual total tax deductions would likely crimp the mortgage-interest deduction for certain taxpayers.”
Details, people, details…
Mayhem
November 29th, 2012
1:11 pm
@Who knows – thank you for explaining that all to me. I still don’t see it as a hand out, since I’ve paid the interest that I am writing off……to me, I’m getting some of MY money back.
And I’ll keep you in mind when I get that inheritance….LOL.
GardenDiva
November 29th, 2012
1:14 pm
The thing I think some people are missing is that the government taxes behaviors that it wants to discourage and gives credits or deductions for behaviors it wants to encourage.
We (the United States) have typically looked at home ownership as a desirable thing, hence the current deduction for mortgage interest.
Freedom lover
November 29th, 2012
1:14 pm
Fundamentally the income tax code should NEVER be used as a tool of social engineering. Ideally we would do away with the Income Tax completely as it fundamentally is just slavery in another form.
People should purchase a house, have a child, donate to a charity, purchase municipal bonds, etc. because it makes financial and moral sense to them, NOT because the government has provided a financial incentive to act one way or the other. It is little wonder the morality of our society is so poor and our value system (for all things) so dysfunctional.
That being said, major elements of the housing market are critically dependent on the current process. A phased approach to elimination would be far less of a shock to the system. A complete removal of any price category (say over $500,000) would immediately result in a significant impact on that sector of the market. Ultimately all deductions must go, along with the income tax itself.
We do not however have a revenue problem. What we have is a spending problem. Eliminating all deductions and even imposing a 95% tax on every American would still not cover all the money government is spending/wasting every year.
who knows what evil lurks in the hearts of men
November 29th, 2012
1:26 pm
@Mayhem…who cares if you’ve paid all the interest that you’re writing off? It’s an expenditure that you elected to make as a function of incurring debt to acquire the utility of an asset, just like a car would be, but no one is complaining about not being able to write off their vehicle loan interest. Car loans arguably are just as vital to one’s livelihood and contributions to society as a home. Most people have to drive to work. But you (and most others) are actually making the argument by supporting a tax break on that particular interest that the government SHOULD actively take a role in what people spend their money on.
So, Denise...
November 29th, 2012
1:29 pm
…by saying “I am not a part of the Entitlement Generation and I voted for Obama. What a surprise! So, no Mayhem, not all people who vote for President Obama are freeloaders. I really get sick of that assumption.”
…are you saying that you voted for Obama because you are black, and he is black, too? Like 97% of the black population will tell you that that is WHY they voted for Obama? Inquiring minds want to know…
who knows what evil lurks in the hearts of men
November 29th, 2012
1:35 pm
@bobo…”Our tax load is far higher than at any point in our history”
Actually..you’re wrong….at least in the last 30, which I assume is considered “any point in history”….
based on this chart, we’re currently at some of the lowest average tax rate across the board in that time frame.
I mean..I get where you probably believe that because of your obvious disenchantment with this society, and you’re probably going to refute the CBO and anything government…but unless you have something better to show than actual studies by experts, you may want to lay off the “Our tax load is far higher than at any point in our history” posts….they just make you sound like a radical extremist.
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456
Whjat about Obamacare...
November 29th, 2012
1:36 pm
…for one Jimmy Johns (similar to Subway for those not familiar with this food franchise) franchisee “that means 150 more employees will be considered full time. And that’s a huge new expense for his business. He told the Huffington Post that those 150 employees would add some $500,000 in premiums, making 10 of his 18 stores unprofitable.
This is a very tight spot to be in. But kudos for Hodges for talking about it rationally and showing exactly what he’s dealing with under Obamacare. He’s trying to do the right thing by his employees, but he’s got a tough road ahead.”
HELP…….
Fair Tax
November 29th, 2012
1:46 pm
End all deductions and just go with the Fair Tax.
Mark
November 29th, 2012
1:53 pm
I think people that are saying we just need to limit the deduction need to pay closer attention.
The Mortgage Interest deduction is already limited. Duh. Publication 936 clearly states “The total amount you can treat as home acquisition debt at any time on your main home and second home cannot be more than $1 million”
You can also use $100,000 as a heloc, so it’s limited to $1.1 million. That’s about $38k at 3.5% interest.
Bid Ern
November 29th, 2012
1:56 pm
I’ll trade the lost deduction for the total elimination of the mistake called welfare.
Mark
November 29th, 2012
1:56 pm
So, in general, the people getting the biggest benefit of this deduction compared to their income are those making $50k to $300k. These people are also known as the middle class.
Mark
November 29th, 2012
2:04 pm
To the lady complaining about the rich using the deduction on multiple houses and boats and motor homes:
You can only claim it on two homes (although you are correct in that it can be a boat of motor home that has sleeping and cooking areas). So you can claim it on your primary house and a second non-rental home, but that’s it. And the TOTAL across both houses is still limited.
who knows what evil lurks in the hearts of men
November 29th, 2012
2:13 pm
@Mark…or just say everyone is entitled to “x” amount of itemized deductions and eliminate things like the 7.5% of AGI threshhold for medical expense, or 2% AGI thresholds of other itemized deductions, the 50% charitable contributions, etc. And eliminate the standard deduction but still allow for personal exemptions. Take the current list of eligible deductions and say take 100% of it all, but once you hit, let’s say $30K, you’re done. Everyone, regardless of rich or poor gets the same absolute benefit, albeit those with lower incomes would get a higher percentage of income benefit.
East Cobb RINO, Inc. (LLC)
November 29th, 2012
2:18 pm
If the mortgage interest deduction is taken away, I will stop paying on my upside down mortgage. There is no longer an incentive to hang on. I doubt I am alone.
Soccer MILF
November 29th, 2012
2:25 pm
As long as the “do nothings” get their cable TV and obama phone then I will gladly pay more. I mean its a worthy cause.
missnadine
November 29th, 2012
2:51 pm
Theresa – don’t feel too proud. The only thing you did is post someone else’s story, like you almost always do. You’ll find the readers here are quite educated and can easily discuss important matters. It is when you post stories on being worried about who taylor swift is dating you lose this group. We may not all agree, but if you read these posts, most are articulate.
Dennis
November 29th, 2012
2:56 pm
Is the real “socialist utopia” that everyone SHOULD own a house? Seems that in a true free market there will be people that it will always be out of reach for (and that the last 10 years prove it should probably be out of reach for more people and not less.)
The reality is that the Federal budget is an order of magnitude out of balance – and cutting PBS or mortgage interest deductions will have little effect on what happens. We have been expanding the money and devaluing everything in our economy for too long.
motherjanegoose
November 29th, 2012
3:09 pm
HB…I have been a renter, homeowner and landlord. It takes a little more skin to be the last two than the first. Some homeowners ARE irresponsible. I agree. We do not live in a Mc Mansion nor would this ever be something that would appeal to us; however, I am happy we live in a subdivision with an HOA. No one has an orange house, chickens in their back yard nor a schoolbus up on cinderblocks in their front yard. When we bought this house 15 years ago, we were worried if we could afford the mortgage. Now, we are on the tail end. We went without a lot of other things, such as big TVs, fancy phones, a new car, trips to the salon etc. It bugs me that people who work hard to earn the things they have, are typically punished to make it fair for everyone else. We lived in a trailer with roaches, almost 30 years ago. That was all we could afford. We did not complain. We did not ask for $$$ or a handout. We worked hard and saved our money plus kept our credit clean. Thus, we are about to pay off our mortgage.
Lately, it does not appear that hard work and perserverance is being rewarded.
Mike
November 29th, 2012
3:19 pm
Regardless of one’s opinion on the mortgage deduction in general, why is it allowed on a second home?
The mortgage deduction on my house give me about $3,700 a year. I haven’t taken advantage of any of the various programs to reduce the principal, although I should look into it. If they’re going to forgive the $70,000 that my house has lost in value, I won’t mind losing the interest deduction.
who knows what evil lurks in the hearts of men
November 29th, 2012
3:23 pm
@MJG….I appreciate your point about the virtues of working hard…i guess my question is this…what does a strong work ethic have to do with the mortgage interest deduction?
cmac
November 29th, 2012
3:26 pm
since the morons in washington are such excellent stewards with our money, let’s just send every penny to them. The longer I live, the more I hate ‘em all!!
who knows what evil lurks in the hearts of men
November 29th, 2012
3:52 pm
“If they’re going to forgive the $70,000 that my house has lost in value, I won’t mind losing the interest deduction”….
Who should forgive you for the loss in value? The government or the bank that you entered into the agreement with of your own volition when you thought it was a safe bet?
this is insanity….everyone talks about government gone amuck, and how the government shouldn’t be giving handouts to anyone, but then when it comes to the suggestion that the government is no longer going a break for interest that you signed up to pay so that you could borrow money to live in a house, the suggestion is that the government suddenly owes us money for the loss of value in an investment. You see the message there don’t you…”don’t tax me when I make a lot of money…and forgive my debts when my investments tank”. It’s so hypocritical!
How do people keep a straight face when they say the government should stop giving people money but then when the government says…”you’re right…we’re going to stop giving people money…but you fall under that umbrella of folks who are getting money from us” those same people turn right around and say…”yeah well, I didn’t mean stop giving me the money you’re giving ME…I meant the money you’re giving THEM!”
motherjanegoose
November 29th, 2012
3:53 pm
@ who…Those who are able to get and keep a mortgage may perhaps have a stronger work ethic? I have been told that it is getting harder and harder to qualify for a loan, so the applicants may very well have to be solid people who have stuck with their jobs. payed their bills and kept their nose clean. The deduction helps new home owners who have minded their p’s and q’s, get into a home. Not so much for me, as mine is mostly principal.
Denise
November 29th, 2012
3:53 pm
@So Denise….no I didn’t vote for President Obama because we are both Black.
Denise
November 29th, 2012
3:54 pm
@So Denise….In case you forgot, I’ve voted for White men since I was 18. Not a race thing for me.
motherjanegoose
November 29th, 2012
3:54 pm
@ who…is this not the same as, NOT IN MY BACK YARD.
who knows what evil lurks in the hearts of men
November 29th, 2012
4:27 pm
@MJG…so your point is that if one has “payed their bills and kept their nose clean”…THEN the government should give them money?
who knows what evil lurks in the hearts of men
November 29th, 2012
4:31 pm
@MJG…ok so you said..”The deduction helps new home owners who have minded their p’s and q’s, get into a home. Not so much for me” But you also said …”When we bought this house 15 years ago, we were worried if we could afford the mortgage. Now, we are on the tail end.” So apparently you were close enough to the edge of not being able to affort the house that you worried about it and presumably benefited from the tax break you received.
I’m just confused now…are you FOR the government giving money to people who buy homes or against it?
Bobo
November 29th, 2012
4:38 pm
Who knows what evil……you’re right about me wanting the government to piss up a rope, and you can do the same if you want to continue with your patronizing tone towards everyone who disagrees with you. While you CAN say that our tax rates are lower than 1980 and you’re right that I won’t find a resource to back up anything in the last 30 years, you CANNOT say that about post-WWII America for anyone EXCEPT for the rich. The average middle class person is getting hammered far worse than at any point before the Carter administration.
Philosophically speaking, I have a big problem with government intrusion into social ‘morality’ and complelling people to forcibly do more for the people who refuse to do more or waste the fruits of the efforts of others. Politicians want a blank check to spend endlessly and most of them have no business making decisions at all, let alone speaking for anyone else. We are at a period where REPRESENTATION of common men is virtually non-existent and TAXATION is completely out of proportion.
It’s time for an Atlas Shrugged moment in the U.S. where all of the working people get sick of it all and refuse to do anything until they are treated with dignity and respect. What could the IRS really do about it if 30 million of us refused to pay our taxes. If they garnish our wages, then we just all quit and apply for government benefits. It’s a zero sum game for the government. Of course people don’t have the courage or the willingness to be uncomfortable, such that they would actually do that to wage a peaceful revolution. Eventually this will come to bloodshed, be it 20 years or 50 years.
clem
November 29th, 2012
4:48 pm
take away deduction on second homes thru phase out by lowering the amount of deduction over 10 years. most folks in that situation should be able to figure it out. no to taking deduction away on first home unless there is a commensurate reduction in tax rates which is unlikely in current atmosphere. otherwise the rich will pay off their mortgages with cash and middle americans will be stuck with a huge tax increase on a necessity of life.
who knows what evil lurks in the hearts of men
November 29th, 2012
5:04 pm
@Bobo…i don’t disagree with much of what you say…I just disagreed with the parts where you presented your opinions as facts. oh..and I wholeheartedly disagree with your premise that a sensible solution to our countries woes is fixing it via revolution.
We’ve got problems, no doubt about it…but there are sensible, moderate solutions that could put this country right back on track to being one of the greatest in human history if a sense of national sacrifice BY ALL and common sense prevailed. And I agree with you…I do come off as sarcastic and patronizing when arguing points…..but we all have our styles…and I welcome you calling me out on it, because it’s only fair when I’m going to call you out on your vitriol and rage towards everyone who in your view is a dreg of society.
Soccer MILF
November 29th, 2012
5:06 pm
The government is about as good with finance as MC Hammer. I mean fix the spedning before taxing for pete’s sake. Anyone ever been the Fulton COunty govt building? Govt at its finest.
who knows what evil lurks in the hearts of men
November 29th, 2012
5:11 pm
of course i mean “country’s” not “countries”…..freaking public education.
Soccer MILF
November 29th, 2012
5:12 pm
If the govt took away HBO to those who got govt assistance it would cure the welfare state real quick. Also if you file bankruptcy you cannot have cable TV for 5 years. People would find a way to contribute real quick or make sure they paid what they owe.
who knows what evil lurks in the hearts of men
November 29th, 2012
5:22 pm
oh..and bobo…I’m not saying that I disagree with this statement of yours…
“you CANNOT say that about post-WWII America for anyone EXCEPT for the rich. The average middle class person is getting hammered far worse than at any point before the Carter administration”
But apparently this guy who did a bunch of research on the subject does disagree with you…
http://www.mymoneyblog.com/historical-federal-tax-rates-by-income-group.html
He actually did the research and found “The Center on Budget and Policy estimates that the median-income family of four will pay only 5.6 percent of its income in federal income taxes in 2006, the lowest since 1955.”
Seeing how there haven’t been significant tax rate increases between 2006 and 2012, and how 1955 was well before the Carter Administration, and the median income family of four is not the rich, he seems to take the position that your statement is just dead wrong. Like I said though…I’m not disagreeing with you..he is..so please don’t get mad at me for bringing this to your attention. i just want you to be prepared when people dispute your position.
You might want to look him up and tell him how full of crap he is and how right you are and he should just trust you in spite of his research. You might want to bring some facts to back up your position though…he seems like the kind of guy who would present you with his.
who knows what evil lurks in the hearts of men
November 29th, 2012
5:33 pm
Oh and to everyone…i have to offer an apology..I earlier expressed my opinion that
“The reason the deduction was passed into law was to incentivize people to buy a home AND PAY IT OFF so you didn’t have a bunch of old people with limited income resources out on the street because they couldn’t afford rent on a place they don’t own.”
I was dead wrong. Upon googling things like “the history of the MID” I found that I was wrong. It was never passed for that intent. It was later sold by presidential administrations as a way to assist folks in the dream of home ownership and pretty much treated as a sacred cow…but the origins were far less altruistic. It was pretty interesting reading.
Soccer MILF
November 29th, 2012
5:35 pm
We need to pay more taxes s a society so people can pay for HBO. Its that simple. We need to pay for obamacare so people can have smart phones.
Soccer MILF
November 29th, 2012
5:39 pm
If goverment was controlled by conservatives poverty would run rampant….oh wait. It already is.
Bobo
November 29th, 2012
5:44 pm
Who knows what evil…….
I don’t want revolution any more than the next person. War is a terrible thing. I just happen to think, human nature being what it is, along with past history, that this country is too far gone. We have too many factors going full tilt that have brought down almost every other empire that experienced them.
Urban-dwellers in the Northeast have almost nothing in common with rural Southerners and Midwesterners. Conservatives and liberals have never been further apart. The melting pot of different cultures has gone from an asset to an out-of-control pissing contest to see whose culture can be put first and who has disenfranchised them. We have no regard for immigration laws. The government has no regard for personal freedoms, especially when it comes to fiscal matters.
No matter what side of the aisle you’re on, name a politician you truly trust to help your cause. You can’t, because EVERY SINGLE ONE OF THEM is dirty. You don’t get elected to any level of office past smalltown mayor (and some of them are filthy pigs too) without selling something out. Most of the time, it’s because you’re a well-connected blue blood that wields power.
I think we’re starting to emerge from the illusion that this country has somehow been a democracy since FDR put in all of his social reforms. They were once well-intentioned (though FDR wasn’t the saint everyone thinks) but they have been pandered and abused to the point of bankrupting the entire country.
Sorry, I just think it’s naiive to think that this is going to end well. I don’t want a war either, but there is merit to ‘burning out’ rather than fading away. The people who are labeled extremists now are the same type of people who told King George what he could do with his taxation and the same reason we call ourselves the USA now.
who knows what evil lurks in the hearts of men
November 29th, 2012
5:51 pm
@ Bobo…wow….you impressed me with that response. Honestly…I found myself thinking we probably have more in common than less. Well written.
motherjanegoose
November 29th, 2012
5:58 pm
@ who…NO… I think the government should give our money to the people who have never worked nor ever plan to. NOT. Why not let them live in our nicer houses and make us live in theirs? While we are at it, maybe we can give them our cars and see how that works. I am certain they would like the insurance for free too. Then we can see who has pride in themselves. Do you think they will take care of our houses/cars like we do? When you work for something, you appreciate it more. I see this in my own two kids.
Oh…I am absolutely willing to trade my flip phone for their Iphone!
I ABSOLUTELY UNDERSTAND THAT SOMETHING HAS TO BE DONE. The problem is NO ONE WANTS TO BE THE ONE TO DO IT. I am able to pay more on my end but want to see who is willing to give something up, on their end. I am not willing to pay, pay, pay. If so, I can just cut back on my work and not make as much money. Others are getting ready to do this now.
Lee
November 29th, 2012
6:21 pm
“The power to tax is the power to destroy” said Justice John Marshall almost 200 years ago. It’s just as true now as it was then.
I’ve read accounts where the total tax burden on the average American is in the neighborhood of 70-80%. When you consider all the various taxes that are levied against us, that number is probably accurate. Consider federal income tax, state income tax, payroll taxes, property taxes, sales taxes, taxes on gasoline, taxes on cigarettes, taxes on whiskey, etc, etc, etc. Then, you factor in all the hidden taxes that get passed along to the consumer such as inventory taxes, usage taxes, machinery taxes, tariffs, etc, etc, etc.
It’s mindboggling. As the old saw goes, “Our forefathers would be shooting by now….”
But no, like the proverbial frog in the pot of water who slowly cooks to death as the heat is turned up, we pay and pay and pay and then act grateful when we are graciously allowed to keep a few cents of our hard earned money.
who knows what evil lurks in the hearts of men
November 29th, 2012
6:25 pm
@MJG….I appreciate the sarcasm. It’s becoming a lost art.
Maybe I’m insulated from all this…but when I drive through the section of my town that is really impoverished, that I would presume have the highest rates of welfare recipients and those who have not “kept their noses clean and minded their p’s and q’s”, I see NOTHING that make me envious of all they’re getting or have. I don’t see iphones and I don’t see Escalades. I see an environment that makes me think I’ll do whatever I have to in order to not be there.
Now i don’t think that is a reason to increase benefits or give people enough to do nothing, but you seem to be implying with your “I am absolutely willing to trade my flip phone for their Iphone” comment that the poor are getting a better deal than you because they don’t pay taxes and get assistance. The poor must be living a little better in your neck of the woods than mine. They should become consultants to the poor in my state offering seminars on how to get iphones and Caddies on their $900 a month welfare checks. Your poor wouldn’t be poor for long.
who knows what evil lurks in the hearts of men
November 29th, 2012
6:35 pm
@Lee…good points…I think we’re getting to a point where people equate “the power to tax” with “taxation” itself. there is responsible taxation (national defense, police forces, firefighters, etc) which unfortunately we are not experiencing right now. Our forefathers didn’t revolt over taxation in and of itself…they revolted over taxation without representation. There’s a difference.
Herpes Butter
November 29th, 2012
6:44 pm
Enter your comments here
Herpes Butter
November 29th, 2012
6:45 pm
Theresa, you need to get over yourself or get off this blog.
Quira
November 29th, 2012
9:14 pm
O did Obama campaign on ending mortgage deductions and eliminating charitable deductions or is this only coming up AFTER he was elected?
catlady
November 30th, 2012
12:58 pm
Actually, I am against all deductions except for number of family members. Deductions are just ways to move paying to other people. They allow the more sophisticated people, usually middle class or wealthy, to avoid taxes that they should be paying.
At one time, perhaps, home ownership was so unusual that it had to be encouraged. At that time, unless you lived on the family farm, you were unlikely to own where you lived. With the advent of suburbia, people were moving into towns and perhaps needed to be encouraged. Or perhaps the advent of the deduction traces to the return of WW2 vets–I don’t really know its history. I do know that for a time it was important. However, now people EXPECT to live in single family housing. We don’t have to create the mindset anymore that it is to be encouraged in order to happen.
Warrior Woman
November 30th, 2012
2:51 pm
I continue to be amazed at the number of socialists on this blog. That is what all of you that think deductions should be eliminated because they are subsidies or payment shifting are embracing. Letting earners keep more of their money is not a subsidy. It is not payment shifting. Renters benefit from the depreciation and interest deductions that their landlords receive.
There should be no compromise on eliminating the mortgage interest deduction on owner-occupied first homes, or elimination of any other deductions, or increase in any taxes, until AFTER spending cuts have been made. And if our elected officials show, once again, that they have no spine and reduce or eliminate this deduction, the depreciation and interest expenses should also be eliminated for rental properties, in order to maintain a level playing field.
who knows what evil lurks in the hearts of men
November 30th, 2012
3:07 pm
@WW….I don’t think that embracing BOTH spending cuts AND reduction of tax deductions automatically makes everyone a socialist.
who knows what evil lurks in the hearts of men
November 30th, 2012
3:11 pm
Personally I vote for an immediate raise in the age of Social Security Benefits by about 5 years or so. Only those 60+ are grandfathered in under the old rules. Same for Medicare.