Now the Idiot Prince wants to eliminate

[Puglover]

the deduction off our mortgage interest. But keep the top 1 percent tax cuts. I'm thinking it's almost time to go to the streets against these thieving bastards.

http://money.cnn.com/2005/10/11/pf/taxes/mortgage_interest/

Randi spoke alot about this today. On reading the article I'm wondering if she wasn't using abit of hyperbole.

[wtmusic]

1. He's throwing a lot of money away on the common people

...need that money for wars.

[madrchsod]

2. it will never happen

the 2006 elections are starting next month. there is no republican that will back this measure

[AndyTiedye]

10. They Must Be VERY Sure Of Those Voting Machinez

There are two things no politician would ever touch:
Social Security and the home mortgage deduction.
They're trying to screw around with both of them.

Why would they grab the third rail with both hands,
unless they knew that the power had been shut off?

Why would they commit electoral suicide,
unless they know that the elections are in the bag no matter what?

:scared:

[aint_no_life_nowhere]

89. This has "Read My Lips" deja vu all over it that sunk Poppy Bush

if only the Democrats know how to make the point.

During the 2000 campaign, Bush signed his name to a tax pledge that said:

“If elected president, I will oppose and veto any increase in individual or coporate marginal income tax rates or individual or corporate income tax hikes. I will also oppose any further reduction or elimination of income tax deductions and credits, unless offset dollar for dollar by reducing tax rates.”

As quoted from “Hardball with Chris Matthews” June 9, 1999

[Cronus Protagonist]

3. I, for one, think that's fairer

Why should you wealthy home owners get a break when renters like myself have to pay using after-tax money? Explain why homeowners should get a break on their taxes and I shouldn't.

As for the people in the top tax bracket, I say tax them more so they pay at least the same as a percentage as I do.

[Jawja]

4. Not all homeowners

are WEALTHY.

The tax break allowed on the mortgage interest helps people own a house or condo. Consider, too, that homeowners pay city and county property taxes.

Homeowners also use "after-tax" money to pay the mortgage and to pay property taxes. It would further hurt the middle class to take away the mortgage interest and State and Property taxes.

[Cronus Protagonist]

19. Simply owning a home makes them wealthy

Simple as that. I'm relatively poor. You didn't explain why I should pay more taxes than a homeowner.

As for what they spend it on, that hardly matters and doesn't explain why they should get a tax break when I don't.

[Terran]

37. Basically because

homeowners spend tons of money to insur and repair the infrastructure of their communities, and you, as a renter, do not. And you obviously know nothing about owning or you wouldn't make the ludicrous statement that merely owning a home "makes them wealthy". What a load of BS that is.

[Cronus Protagonist]

45. If homeowners weren't making bank they wouldn't buy real estate

Personally, I don't even have the choice available to me. And as for "spending money to insure and repair the..." - that's a canard because for one, I pay MORE in taxes than they do, and I DON'T have anywhere near as much money, equity, spending or purchasing power while their investments are racking up equity like never before.

Again, why should I pay MORE taxes than you relatively rich home owners? Wouldn't it be fair to make our tax burdens the SAME, and perhaps closer to Democratic ideals if the poor paid LESS not MORE taxes?

[PurityOfEssence]

51. You don't pay anywhere near as much local tax

This is the divide and conquer of the working and middle classes. That's why candidates don't talk about poverty: the right has suckered people into thinking that they'll be the ones taxed to help the unfortunate. It's the same way poor whites are appealed to to destroy affirmative action.

Who pays for garbage collection, sewer maintenance, police/fire services, roads, public transport, schools and a host of other things you get to use? Not you. People like me do. I'm subsidizing all the parasitic churches in the area, too, so if one belongs to a church and doesn't own property in the area, one is leeching off of homeowners.

I'm sorry you don't have the resources to buy, but that's no reason to take it out on the rest of us. Many of us are two-earner households who worked very hard for a long time to get a place and then move up a little; for many of us, our houses are the bulk of our net worth. To make a radical move like this is going to really destabilize many decent, circumspect and hard-working people; many of us have a delicate balance in how our personal finances go, and we're trying to build for our future and virtually inevitable declining years without being a burden to society.

In a larger sense, the homeowner deduction is a way of getting middle class people to sustain the society from which we all benefit; we shoulder the risk and pour our resources into the community.

Remember, too: the deduction is a DEDUCTION, not a credit. It lowers our taxable income; it doesn't subtract from our tax liability.

This country rides on the back of the middle class; if you're as poor as you say, you're not paying that much in tax anyway. To tamper too much with the mechanism by which a great number of people keep this mess rolling along sounds more like bitterness and spite than any righteous cry for fairness.

[nini]

65. EXACTLY - local property taxes basically negate the fed deduction

so we're lucky to even out.

In California we're really screwed if you bought a house post-Prop 13.

[PurityOfEssence]

70. That would be me...

We're in the Silver Lake area of Los Angeles. We bought our first place in '91, and sold that and bought this place in '03. The thought of how little some of our neighbors paid in property taxes was galling then, and to a certain degree, still is. Having seen values shoot upward to ridiculous levels in the past two years, some of the sting is taken out of it, but it's still an imperfect situation.

The greatest gift that society offers is stability. Without this, it's hard to quell crime and raise families. Much as this system is rigged against the poor and middle classes, some sensible moves have been made to keep things in check.

Here in L.A., we pay 1.25% of purchase price as our yearly property taxes. Considering what the housing costs are here, that can really add up.

For people to have a greater than $350K mortgage isn't uncommon or proof of that person's great wealth; houses here are exorbitant.

This has been a long-standing deduction; it's something we were led to believe would be there forever. Sure, nothing's sacred, but it's not a minor tweak that peripherally affects people, it's a major determinant.

As we've seen with Social Security, NOTHING is to be taken for granted. Still, the sniping from other working people against working people like us is frustrating and dangerous. Do we want more foreclosures? Maybe that'll drive down prices a bit and some others will be able to get into a house, but chances are greater that it'll just spawn a larger culture of landlords and more will become renters.

It's disgusting how the working poor, working somewhat-better-off and middle classes are pitted against each other, and it's just crazy for legislation to further imperil those who've elected to take the risk and responsibility of ownership. Personal failure on a large scale is a very real possibility, and if that happens, it'll plunge this country into ruin. These people are reckless and insane in their simplistic greed.

[nini]

86. I'm in Torrance in a townhome

I want to move but won't be able to afford the huge increase in property taxes from about $2200 to $7000 a year. It's nice to have the equity to use as a big down on another place but those property taxes on the new place put me out of being able to afford it. :cry:

I pay $2200 a year and my next door neighbor pays about $400. There's something wrong here.

[SoCalDem]

74. and property taxes finance public education in most states

Our whole system is based on "shared" resources.. Young families who rent and have small children send their kids to public schools paid for by lots of older people's property taxes.. I have not had a kid in school for YEARS, but my property taxes are still paying for educational opportunities for people who rent, but send their kids to school..

We used to rent, until we scraped together the $11k necessary to buy this house.. and we have had to pay out of pocket for every mishap this place suffered over the years.. roof replacement over 5K, A/C replacement $5200.00, assorted appliance failures etc..

The thing that people forget is that you can NEVER "get more back " in tax-refunds than you have actually paid in..

Let's say you have a 320K moretage (yikes!) at 6%.. Your interest would be 1600monthly (19,200 yearly).. If you only paid into withholding $7K, that's all your would get back...NOT the actual amount you paid in interest.. Just the amount of your own money that weas withheld..Not a penny more..

[PurityOfEssence]

77. It's a scheme to get the weak to help attack the slightly less weak

Galvanize the have-nots to help destroy the have-littles is the historic way the ruling classes crush all social and economic competition.

Just as poor whites were galvanized through blatant racism to destroy affirmative action (them darkies is gonna take yer jobs!) non-owners will be used to suck more blood out of small landowners.

I have 2 kids in public school, but even if I didn't, I'd still be proud to pay into the system that attempts to open doors. As a homeowner in Los Angeles, I paid into the system for 11 years before I had kids who were in the system.

I'd say the cap should be indexed to state rates. Why should some people in Tennessee (with no state income tax) get to write off all their interest for a veritable chalet, when those of us in California subsidize Tennessee through our Federal Income Taxes and also have to get our asses kicked by losing deductions on property that's worth much less?

All tax plans should be based on an attempt at fairness, not just "what we can get away with". Sadly, as sin taxes show, taxes are a cynical way to get others to pay for everything. The assholes among the rich (and many rich people are truly honorable) think they're aristocracy and everyone else should support them. The assholes among the poor (and many of them are honorable too) want to stick it to everyone else.

The biggest problem is making a nationwide cutoff value; this country is diverse and to do so is to screw those who live in the more expensive areas.

One can also look at this as a Red State fuck job on the rest of us. People there (who often pay no state taxes and get disproportionate help from the federal government) benefit from low property values, so they'll still have their deductions. Those of us in blue states (who don't leech off of the rest of the world) will be hit over and over again with tax obligations to sustain the freeloaders.

This is wrong on so many levels that it's just nauseating.

Index the rate, based on home prices and tax obligations. By doing so, the cap would be higher in places like Massachusetts and California and lower in sponge states like...well, fill in your own demons.

[tnlefty]

107. I hear ya, and everytime that I contact a news station or write a

letter to the editor of the paper, it is ignored. People who just love to bitch and moan about welfare without realizing that southern states and most of the midwest states are welfare states.

[Terran]

64. Wrong

...I pay MORE in taxes than they do, and I DON'T have anywhere near as much money, equity, spending or purchasing power while their investments are racking up equity like never before.

You *don't* pay more in taxes. You're forgetting about a little thing called property taxes that costs me thousands of dollars per year; plus I have to carry mortage insurance and homeowner's insurance, neither of which is required of you. And as I said, I have to maintain my property to maintain any value as an "investment" in it; again, that's an expense you don't have. And I'm not sure what "investiments" (plural) you're referring to. I've got a measly 401k through work and that is my only other investment, and it ain't gonna make me rich.

Basically I have a household income of about $58,000 (between two people), and I work a part-time job on top of my full-time job to get it to that level. Anyone with a household income of $50,000 and decent credit and $500 saved up could do the same thing I did. All your talk about being "relatively" wealthy is pure bullshit. Owning a home is *more* expensive than renting, even if less of the expense comes from taxation. You have many freedoms and benefits from renting that I no longer have.

[Sapphire Blue]

69. Landlords pay property taxes & other costs; those taxes & costs are passed

... on to the renter. The renter receives no tax credit while the landlord does.

[nini]

72. Then buy your own place

Using your logic you should be able to take advantage of the loans these days and fully finance a place then charge tenants the cost of all the taxes and mortgages. You could then be the landlord and reap all the benefits.

It's not quite that cut and dry.

[Sapphire Blue]

73. I was stating a fact.

I was not advocating elimination of the homeowner's tax credit, though I do believe it is unfair to renters. I would favor a renter's tax credit, in addition to a homeowner's tax credit.

I could not, in good conscience, become a landlord with the goal of making a profit from exploiting renter(s).

You're a little defensive.

[nini]

75. I'm not really defensive as much as realistic

Most people I know know that own rentals are basically breaking even - not raking in huge profits. They make their money when they sell, but not off the rents themselves.

I don't see how that is exploiting renters. True, there are those that do charge wild rents but those folks also have to claim that as income too and pay taxes on that income.

I've rented and owned so I know the benefits of both. Believe me I hate having to fix a broken pipe instead of calling the landlord. I bought because I don't want to have to pay rent when I retire - that is my main reason. If I would have to pay rent I wouldn't be able to retire at all.

[Sapphire Blue]

76. If they are breaking even, their renters are paying all the costs that

... they are liable for... and the landlord, rather than the renter, is receiving the tax credit... while the renter, in essence, is paying the tax.

True, there are benefits to both owning & renting. What we need to look at is making both options more affordable. There is far too much homelessness in this country.

[nini]

100. uhhhhhh should landlords lose money on their places?

I'm actually on both sides here. Renters need access to affordable safe housing. Landlords should provide clean/safe places if they choose to own rental property. However, I don't think a landlord should have to subsidize others just because he's able to own the property either.

Do renters think people that own property shouldn't be helped to own it if they otherwise could not do so? I fall into that category as do most Americans. I guess it would be better if property ownership also fell into the top 1% category too?

I do know the tax scales are not the same on one's primary residence vs secondary also. So, the real savings are for the primary residence.

We're closer to agreement than you realize. I just think tax breaks to help people own property is not a bad thing for those of us who would not otherwise be able to own. .

[Sapphire Blue]

103. That is a ridiculous question.

A landlord shouldn't have to, and doesn't subsidize renters.

Turning your second question around, do landlords think renters should help them (the landlords) to own their property by paying the landlord's ownership costs? A landlord is, in essence, being subsidized by the fed gov't w/a tax credit, and by the renter, who is paying the landlord's costs.

As I stated earlier, I do not advocate elimination of the mortgage interest tax credit. I favor continuing it, especially if the relevant home is the homeowner's owner's primary residence. I also favor a renter's tax credit... a housing tax credit for owners and renters.

This shouldn't be an 'us vs them' debate... we are all, whether a homeowner or a renter, finding either option less affordable every day, and are often just a paycheck away from homelessness... there are people working full-time jobs who are homeless due to the unaffordability of housing. The issue is the lack of affordable housing... for homeowners and renters... and both groups deserve equitable tax credits... not the elimination of tax credits.

[nini]

104. well then we agree

I'm for renters' credits as I needed them before myself when I was on a limited income. However I don't go for this for higher income people (which I'm sure isn't your point).

If I had my way all the freaking empty buildings around would be made into housing for the homeless, but I don't get my way much in this life.
There's a whole housing tract near me that used to be military housing just sitting there empty that can be used to help families who otherwise couldn't afford a house. GAWD DAMMIT it pisses me off every time I go by there to see it just sitting there deteriorating while people are living in crap holes somewhere. :nuke:

[Sapphire Blue]

105. Sadly, neither one of us will have our way as long as the robber baron...

... repubs remain in power. We will continue to see the increasing accumulation of wealth among the 'haves & have mores', at the expense of those who have little or have none... and they will continue in their attempts to pit those who have little against those who have none. Meanwhile more & more of the USA will become like a Third World country... what will it take for people to realize who the real enemy is, instead of taking the bait?

[Cronus Protagonist]

82. I'm sorry you're not making bank, but why should I pay more than you?

I'm sorry you don't appear to have equity, but I bet you can borrow against your property in an emergency, you get the tax breaks and you gain equity (eventually) as well. To conplain about the insurance appears specious to me. If I buy a racehorse can I complain about the grooming costs and insurance? Sure I can, but I would still be a rich racehorse owner.

Relatively speaking you are much richer than I, as is my landlady, and I pay my landlady MORE than her mortgage every month, which she keeps for profit, or home improvements (hahaha, none so far in years of renting), AND I pay her property taxes along with everything else to do with the house.

Again, why should I pay more taxes than you?

[bunny planet]

85. What are you smoking? The only people who are wealthy that own homes

are those who own their home's outright with no morgage. The rest of us middle class home owners are scraping together what we owe every month to the bank, who owns our homes until they are free and clear. Think of it as renting from the bank, with the bank being your landlord. The only thing that makes it worthwhile for people to own over renting is the deductions on taxes such as property tax deduction and home insurance deduction. The first few years of a morgage, hell the first 10 years on a 30 year morgage is practically all interest, if people lost that deduction they'd be screwed. I suppose you'd like only the truly wealthy, those who don't need to worry about morgages or interest to be the only homeowners.

[1932]

26. That's why not everyone should get the break.

When everyone, regardless of income, gets this tax break, it just means that people pay more for their homes than they would otherwise, and that influences housing prices for everyone.

When the government subsidizes the purchase of something by giving you a tax break when you buy it, and does not discriminate at all in terms of who gets that break, that influences the price of the thing being sold.

If the government gave EVERYONE a thousand dollar voucher to buy private education, do you think private schools would keep their prices down? No. Prices would probably go up. The government would be subsidizing their profits, and some people would find themselves in the exact same position as before -- even with the voucher, they'd discover that they couldn't really afford a private education.

[smoogatz]

5. Because it stimulates the housing market, for one thing.

Which means more construction jobs, more jobs for people who manufacture durable goods, and a big boost to the economy. And what makes you think all homeowners are wealthy?

[Cronus Protagonist]

20. They're wealthier than me

And again, why should I pay more in taxes to stimulate the economy than they do?

[smoogatz]

24. Well, partly because they're stimulating it more than you

because they spend more money on houses, refrigerators and such. But they also pay more federal income tax than you, both in dollars and in percentage of income--and any tax relief we can give the middle class is good for the economy, and good for the middle class.

[1932]

27. A tax subisidy that increases the amount of money people go into debt

to buy a home isn't a productive stimulus for the economy.

The thing it stiumulates the most is profits for mortgage lenders, and its all taxpayers who end up financing that gift.

There are better ways to encourage home ownership than a tax break that is so indiscriminate that even very wealthy people benefit from it.

[Skidmore]

42. Exactly what taxes are you paying beyond income tax?

Home owners also support the school systems in their communities since revenues from property taxes are the source for school revenues. I'd wager you were educated in a school supported by homeowner's taxes.

[Cronus Protagonist]

48. No, I wasn't educated in a school paid for by property taxes

And again, you and no one here answered my question. Why should I pay more in taxes than a homeowner? Why can't I deduct my rent off my income like homeowners do with their mortgage interest?

And if you think I'm not paying the homeowners property taxes (PLUS) with my rent, I have a wonderful bridge to sell you in Brooklyn. It's old, but you could make it into a roller coaster.

[Skidmore]

54. Is this PLUS a program or something.

My experience with renting is that you pay the landlord what you have contracted for as rent, and from whatever the collect from you, they use to maintain the property you reside on and to pay the property taxes. This also includes repairing any damages above and beyond normal maintenance made by a tenant who destroys the property. I don't get how you are paying more than a home owner in taxes when you are most likely not paying for maintenance of the property on which you reside nor are you directly responsible for the taxes.

[Cronus Protagonist]

83. I wish. I'm paying it all and MORE

And I can assure you that, even if the landlady is breaking even on the rent, I'm paying the property taxes AND all the repair costs AND all the maintenance costs. She gets the tax break, though.

All I want someone to address is why should I pay MORE in taxes than a landlord or other homeowner? Why?

Note that I'm not asking why you should get a tax break, I'm not against that. I want to know why I should pay MORE than a property owner when I'm the poor one in the picture here.

Why?

[converted_democrat]

116. Well IMHO, the homeowner is assuming risk that you don't have to. n/t

[qanda]

55. I'm also a renter

And I most certainly do pay property taxes. My landlord's property tax went up $500 and he increased my rent by $100 a month. What a deal!!!!!

[converted_democrat]

66. How are you paying more taxes?

Do you know how much property taxes run?

[Cronus Protagonist]

84. Sure, I'm PAYING my landlady's taxes, mortgage AND repairs

Maybe she's even putting some aside, and she's gaining equity every day. But you didn't need me to tell you that, it's as plain as the nose on your face.

[converted_democrat]

108. If you think people make money off of all rentals, your sorely mistaken...

Many properties take years to make a profit on. People often lose money in the first few years after buying a property because of the cost of maintenance and other expenditures. Every cost you mentioned is above pretty much necessary. If you want to live under a roof, they have to be paid.

[jwirr]

6. Not all home owners are wealthy - many have loans

through low-income programs and habitat houses. Many are just barely making it.

[Mr_Spock]

15. Low income people don't buy $1,000,000 homes!

This would only affect people with mortgages bigger than $300-350,000 dollars (or wherever they MIGHT decide to set it). This is just a recommendation from a panel he appointed and they are actually trying to get wealthy people to pay more - is this bad?

[smoogatz]

18. $300-$350K is near the median home price in a lot of markets

And way below the median in Manhattan, LA, Las Vegas, Miami, Boston and DC. If they want wealthy people to pay more, they should increase income and investment taxes on the rich. Lots of solidly middle-class people have mortgages of $1 million or more. I think it's bad economics and bad politics to punish people who are already struggling to pay outsized mortgages. If this goes through, you'll see a spike in foreclosures. That what you want?

[Cronus Protagonist]

21. I'm barely making it too - so why should they pay less taxes than me?

It seems to me there's a lot of people on this thread making all kinds of comments about small sections of "poor" homeowners, when they refuse to address the core issue which is why should I pay more in taxes than they? Why? They own a home, barely making it or not. I don't and I'm barely making it. Why should I pay more in taxes than they do, and why should they get any tax breaks at all?

[smoogatz]

25. If you're that broke, you probably pay much less

in federal income tax than middle-class homeowners. They just get a modest deduction that you don't.

[1932]

29. It's not a modest deduction. It's a significant deduction.

And I believe it's a deduction that doesn't get recovered by the Alternative Minimum Income Tax.

It's a deduction that could significantly lower your effective tax rate below someone with a lower income.

Now, it's good to encourage home ownership, because that's a great way to build wealth in the middle class.

But you have to wonder if that's what is happening when you're tax breaks help drive up house prices and shift taxpayer wealth from renters (and people with high effective tax burdens) to mortgage lenders thanks to the higher tolerance for debt that you're creating among homeowners.

There has got to be a better way to encourage homeownership than this tax break as it exists today.

[smoogatz]

32. Well, it's modest in our case

but then we own a pretty modest home. And my guess is that for most people who own relatively modest homes, the same thing holds true. I just don't think getting rid of tax breaks that actually benefit the middle class is sound economics or sound politics at this juncture. There are better ways to rewrite the tax code that don't end up hurting middle-class homeowners. Like maybe getting rid of Bush's outrageous tax cuts on investemnt income, and the wealthiest 2% of Americans, for starters--which will cost the nation trillions in revenues going forward.

[1932]

33. The people benefitting from those tax cuts on the wealthy

are the owners of the banks making millions from this subsidy that helps people overpay for homes and take on more debt than they would otherwise.

My only point is that the mortgage interest deduction should be tailored so that it helps people who need it. By helping all comers, it ends up wiping out all its benefits by driving up prices of homes.

[smoogatz]

35. Its effect on home prices is minimal.

The main driver for the housing boom has been record low interest rates, and, in areas like LA, Phoemix, San Diego and Las Vegas, a population boom. I really don't believe the mortgage decuction is a major factor. And it's not just banks that get the benefit, contrary to your opinion--the people who get the deduction get the benefit, which is money they don't have to pay in taxes, which ends up going back into the economy--which benefits everyone.

One edit: I should add that I really don't trust the Republicans to "reform" the tax code. We all know what the end result will be--less taxes for the rich, more for everyone else.

[1932]

58. I think the deduction does influence the price. Isn't that one of the

lessons from the new prescription drug plan?

Giving people a subsidy to buy drugs but not controlling prices (or doing anything to offset the impact of this newly available money on prices) doesn't do a thing to lower prices, and, in fact, can boost prices, and it will increase the profits of drug companies. (In fact, it's designed to boost the profits of the drug companies.)

With homes, people are bidding prices up to the limits of their budgets, and their budgets are influenced by the tax break.

As for the Republicans looking after the wealthy, I agree. That's why this proposal will not be taken forward in any form. Republicans are going to protect the banks and all the wealthy people who also benefit from mortgage interest deductions.

As I keep saying, I do like a tax code which encoruages home ownership, but this break should be tailored so that it phases out as you get wealthier, whether that phase-out is triggered by home value or income or (ideally) some combination of both. I think that would mitigate the effect of the break on increasing people's debt loads to the maximum.

I also think that if the government gives a tax break for the consumption of any good, then it should be right for the government to step into the marketplace for that good to offset some of the "subsidization of profit" effect the break has on the marketplace. For example, if the government gives tax breaks for people who buy health insurance, the government should also be in the business of providing health insurance. With prescirption drugs, if the government is going to subsidy the profits of drug companies, the government should also be allowed to use its buying power to get those drugs at low prices and to distribute them to the poor so that the drug companies don't reap windfall profits from the subsidy for consumption. If the government is going to subsidize indebtedness for the purchase of a home, then the government should use Fannie Mae (or whatever) as a direct-to-purchaser loan company that lends to poor people.

I think it's a misuse of government power to shift the cost to taxpayers of private consumption that the government encourages through a tax break without providing any offsetting mechanism to counterbalance the windfall profits that your legislation ensures the sellers of those private goods.

And I also think that any time the government hands out tax breaks and shifts around tax burdens, it should be very conscious of how those burdens are being allocated. You can't make poor people take on a bigger tax burden while creating huge profits for powerful private interests. So, when you have something like mortgage interest deductibility, you have to make sure that the benefits and burdens are allocated efficiently and fairly among poor and wealthy people.

[smoogatz]

62. Well, the deduction's been around for decades

and home prices have been all over the place during that time. The current boom didn't really get going until interest rates dipped below 6% or so.

[1932]

63. And the tax code has been shifting tax burdens off wealthy for 3 decades

So it's a good time to take this issue seriously.

An aside: I think the real estate market has been going haywire because there aren't that many other investment opportunities. Incomes are flatlining and going down, so there's not that much New Deal-style aggregate demand stoking consumer spending. The stock market has flat-lined since 2001.

People looking for 30% returns on investment have been feeding into a real estate bubble that will make a lot of people rich and leave many holding the bag when it bursts.

I think that's the primary motivating force for rising prices. But I also think mortgage interest deductibility has raised the pain threshold for debt burdens in increments that might not, by themselves, have caused a real estate bubble, but are a contributing factor in an environment mostly driven by the desire of wealthy people on Wall St -- CEOS of homebuilders, REITs, mortgage lenders, etc -- to make a buck.

[Cronus Protagonist]

87. Thanks for that analysis - very good info here

I take it that means you don't agree that I should pay more in taxes than homeowners? At least, you call for phasing it out, which is better for the disparity, but I'm not against homeowners getting tax breaks, what I'm against is the disparity.

Can we agree on a renters credit so that the homeowners who benefit from the tax breaks don't get more breaks than I do?

[1932]

28. Part of the reason you can't afford a house is because of this break

which encourages people to bid up the prices more knowing that they will get the tax break on their indebtedeness.

Of course, if you have enough income to benefit from the break, you should be willing to match the prices others are willing to pay. However, people with a lower tollerance for debt (because of uncertain job security, or a stream of income that might not be steady) then you will not be able to keep up with the bidding of people who, for whatever reason, have a high tolerance for debt.

In any event, in my opinion, the people who are helped the most by this tax break aren't the homeowners so much as it is the lenders.

[Cronus Protagonist]

46. I agree with you, but you didn't address the point on the head

If I read between the lines I might be able to come to the conclusion that you would therefore support levelling the playing field since most of the benefit for the reduced taxes seem to go to the financiers?

Would you support removing the tax credit for homeowners?

[1932]

60. See post 58.

[Speed8098]

67. Because you don't!!!

It seems to me there's a lot of people on this thread making all kinds of comments about small sections of "poor" homeowners, when they refuse to address the core issue which is why should I pay more in taxes than they

You do not pay more taxes than a homeowner!

Do you get it now?
If you are as poor as you claim to be ,chances are, you get a full refund every year. So stop with your repetitive nonsense

[Cronus Protagonist]

90. I pay my landlady's mortgage, taxes and maintenance

She gets the tax break. I can't be more clear than that. Again, why should I pay more in taxes than she does? I pay rent to her with after tax income and she deducts her mortgage payment. She's making BANK!

Why should I pay more?

[Speed8098]

97. You've got comprehension problems

What don't you understand?

I pay over $3000.00 per year in property taxes.
My neighbor pays almost $7000.00
If my refrigerator breaks, I buy a new one, you call your landlord.
If my stove quits working, I buy a new one, you call your landlord.
If my cesspool overflows I pay to have it pumped out, you call your landlord.
If my roof leaks, I have to pay to get it fixed, you call your landlord.


I don't know what your profession is but I'm a non-college educated sales rep. I don't get paid much.
At any given tiime I'm only 2 or 3 paychecks away from being homeless.
If you call THAT wealthy, you're crazy.

You DO NOT pay more in taxes than ANY homeowner, REGARDLESS OF THE INTEREST DEDUCTION.
Now do you get it???????

[Cronus Protagonist]

109. Sorry, but it is you who has comprehension problems

I have a lot of things that break and I have to pay to get fixed too, including my fridge and microwave, but I don't get a tax break and I'm not the one building equity either.

That's ok. One can't expect everyone to see the forest. You sure can count trees though.

:evilgrin:

[Speed8098]

114. "You sure can count trees though."

I'm sorry, but you're just off the wall. I see many replies to your nonsensical repetitiveness that are polite and explain to you why we are able to deduct the INTEREST we pay on the risk we take called home ownership.

You are one of those people that think if you repeat a lie enough times people will begin to believe it.
Does that remind you of anything?

:sarcasm:

Here's a thought Cronus, spend less time on the computer and more time earning money and maybe you can join us elite.

Hell, we'll even throw you a party when you become one of us. But you have to keep the secret that we're all extremely wealthy. It's a condition of getting a mortgage. You have to be rich. :sarcasm:

Do you see how ridiculous it sounds when put into perspective?

[Mr_Spock]

12. You are correct - it will only affect extremely large mortgage holders

Most of whom would be extremely wealthy people.

And the idea was from a panel Bush put together - he was probably pissed at this recommendation - it was NOT what he expected to hear as it effectively eliminates his tax cut for the rich - his buddies.

[SammyWinstonJack]

13. I am not a wealthy home owner and my property taxes have greatly

increased over the past seven years I have owned this property without the market value actually increasing and with no improvements to actually warrant the increase that the tax office has imposed on me. When I bought this house in '97, it was assessed at $118,000 and just last year, the tax office assessed it at $150,000, increasing property taxes from approx. $2,900 to approx. $4,500, raising the mortgage payment almost $200 dollars/mo. over the past seven years. Fat chance I could actually get $150,000 out of my house. :rofl: This ain't Calif or DC or Vegas or Phoenix. This is just another way to stick it to the little guy, typical repuke greed! And if you want to blame someone for slamming renters, blame Reagan who eliminated renters' tax exemptions. As far as I remember, being a renter previously, one use to be able to get a renter's deduction on one's taxes. He did away with that the same time he eliminated most all deductions that benefited the middle class, ie, finance charges and the like. My property taxes almost equal my mortgage interest, it's close. How about they eliminate the mortgage interest on multiple homes, instead? Those greedy bastards who can afford more than one home, have already benefited from tax breaks.

[Mr_Spock]

14. How would this hurt you?

Allowing only the first $350,000 of mortgage amount to be deductible won't affect you!

And this proposal was put forth by a commision that Bush created - he's probably insulted because they have essentially figured out how to eliminate his tax cut for the rich without doing it directly. How is this bad?

[SammyWinstonJack]

17. I'm hoping it won't, but am I to trust these people?

I don't, sorry. If it goes down as suggested, fine, but who's to know, really? Like you stated, bush is insulted and I doubt he will stand for it, since it will basically result in hurting his base.

[Cronus Protagonist]

22. You're filthy rich compared to me

And I have similar problems with rent increases and moving costs that you don't have. Again, why should you get a tax break and why should I not?

[Puglover]

23. There are plenty of reasons why home owners get

the tax break. It's a subsidy and an incentive to buy a home. It also is a stimulus to the housing market which is one of the largest driving forces in our economy. Why don't you google it and check it out rather then repeating the same strident question over and over.

[Cronus Protagonist]

43. I ask the question over and over because no one addresses it

Just like you did. No one needs incentive to buy a home - they make out like bandits and STILL get a tax break on top of it.

I suspect you might be someone who can answer my question, so here it is again. Why should I pay more taxes than a homeowner? Why? They're richer than I am, but they get the tax breaks. Are you a Republican when it benefits yourself and a Democrat when it doesn't call you to give something up? A fair weather Democrat, in other words?

Come on, tell me why I should pay MORE in taxes than you.

[hughee99]

57. My example...

Living in Massachusetts, the real estate market is grossly inflated. The loan for my house, which I bought 5 years ago is about $200,000. My tax deduction (and remember, you can only write off the INTEREST, not the principle) is a little bit less then my property taxes ($4.18 less to be exact). Therefore, were I to rent an apartment at the same price as my the principle of my mortgage, I would pay less in taxes. The rent for the previous apartment I had was less than the current principle on my mortgage. It included heat, electricity and any necessary repairs. Now if anything goes wrong in my house, I have to pay out of my pocket to fix it. I also pay extra for heat and electricity (as compared to having it included in my rent before). Don't get me wrong, I'm glad to own a home, but I'm NOT "making out like a bandit". Other's situation may be different, as someone who didn't own a house 5 years ago, and owns one now, I pay more taxes and a lot have more expenses now.

[Cronus Protagonist]

81. Sorry to hear about your poor investment, but why should I pay more?

Good luck geting an apartment at the same price as your mortgage. Find a place the same size, same area, same condition and rent it and you will find your rent will be MORE than the mortgage would be and your landlady will be getting the tax breaks.

You didn't address why I should pay more taxes than you. It's a simple question. Why will no one address it?

Tell me why I should pay more taxes than you.

[hughee99]

94. My arguement isn't that you should pay more in taxes...

It's that your NOT paying more in taxes. Since I'm not as familiar as I need to be, I can only speak for my own situation. In my area, here's how it is.

Pat and Chris both make the same amount of money.

Pat pays X in interest on his house and is able to write it off on federal taxes. Pat also pays about X in local taxes. Pat is not able to deduct mortgage interest on his state taxes. His local taxes and his federal deduction are a wash, so he is paying.

Pat = (Total Federal taxes - mortgage deduction) + Total State taxes + Local property taxes.

Since Local property taxes = mortgage deduction he's basically paying his regular Federal and State taxes and the deduction covers the local taxes.

Chris rents. He pays (presumably) the same in total federal and state taxes as Pat. He cannot write off his rent on his federal taxes. In Massachusetts anyway, he can right off a good portion of his rent on his state taxes. As a renter, he is not personally responsible for property taxes. Since his local "property taxes" would be included as part of his rent, and he can deduct that on a state level, he comes out ahead.

Pat = Total Federal taxes + Total State taxes
Chris = Total Federal taxes + (Total State taxes - % of Rent)

With their incomes the same (and presumably their initial tax burdens the same before considereing children, property, etc...) Chris will pay more in federal taxes. Pat will pay more in State and local taxes, and in the end Pat the homeowner will pay more in total taxes.



BTW, my 1000th post on DU... Hurray Beer!

[VelmaD]

96. So where do you think the property taxes come from...

on the property Chris rents? From his rent payment...that's where. All this bullshit about how renters don't pay property taxes is just that...bullshit. It's figured in as a part of our rent.

I don't know about other states, but Texas has no state income tax so I don't get to write off one single penny of my rent payments on ANY tax return.

[hughee99]

98. Since property tax is part of your rent..

And in massachusetts you can write off your rent on your state taxes, therefore you can deduct your property taxes on your state taxes. In Massachusetts anyway, your total tax burden would be less. In Texas, how do local governments collect most of their revenue, property taxes or sales taxes?

On edit: Did you see this line in my post above? "As a renter, he is not personally responsible for property taxes. Since his local "property taxes" would be included as part of his rent, and he can deduct that on a state level, he comes out ahead."

[hughee99]

102. On an aside...

"Good luck geting an apartment at the same price as your mortgage"... so what your saying is that it's cheaper to buy a house than to rent, even in the short term? If this is the case, why don't you buy a house, rather than rent. Then it will be cheaper for you and you won't have to "pay more" in taxes.

[Cronus Protagonist]

111. Haha you can be my real estate agent :)

You talk about buying real estate as if it were like buying a can of coca cola. It's not cheaper to buy a house than rent. To buy a house you have to be rich enough to afford the down payment, broker fees, appraisal fees, closing costs, etc.

And again, that sidesteps the issue. I shouldn't have to buy a house to get a tax break and I don't think just because one can afford to buy one that one should get a tax break and the people who can't afford one don't get it.

Why should they not get the same tax break? Let me deduct $NN,NNN off my taxable income this year. Why not? Why should someone buying a house get it and I shouldn't?

Why can't anyone explain why I should NOT get a break but the real estate owner SHOULD?

All I see are people desperate to keep their tax breaks. People who no doubt live in their comfortable homes and feel pinched if they can't get their additional break at the expense of the common people who have to rent.

It's not pretty, and no one has been able to explain why a single working class person should NOT get the same tax breaks as someone who OWNS real estate. And, interestingly, surprisingly few in this thread offerred parity with support for a renters credit (even then, not complete parity).

Interesting. I thought this site had more principled people as members, but apparently not. Scratch some Democrats and you find a Republican, it seems. Someone, somewhere prove me wrong. Answer this question with something supportable: Why should a homeowner get to write off his interest pre-tax and a renter should pay his rent with after-tax earnings?

Why?

[hughee99]

113. Now that I think about it...

As I see that the government is trying to encourage home ownership by trying to make it easier for people to become homeowners. I think most people would agree that people owning their own homes is a good thing for Americans, but beyond that thinking, I realized that you're right. It isn't fair, the government is screwing the rest of the people by trying encourage people via tax deductions to do something which it believes is good for them. It isn't fair because not everyone is able to take advantage of the credit. Going further, it's also not fair that those who have children receive a deduction that those who are unable or unwilling do not get. It's unfair that people who are able to save for retirement in 401K's and 403B's receive deductions that those who are not able to save do not. It's not fair that a divorced person is able to deduct alimony payments and those who are not paying them are not. It's not fair that those able to contribute to charitable organizations receive a deduction that those unable (or unwilling) to contribute do not. It's not fair that a person who pays for a parent's nursing home expenses to deduct the expenses while those with healthier (or deceased) parents do not. Yes, I now agree. The system is unfair.

[Puglover]

78. Nope pal

you start with the ad hominem attacks and the only thing you get from me is a nice cozy slot on my ignore list all your own.
Cya.

[smoogatz]

34. Why do you hate the working class?

Just kidding--sort of. What's wrong with the government trying to help middle class and working class people to become homeowners? I'm all for getting rid of the 2nd home deduction, but the property tax and mortgage deductions are among the few breaks still available to working people. For Democrats to be complicit in getting rid of them would be a real betrayal of their alleged constituency.

[Cronus Protagonist]

44. You're saying that the poor are NOT Democratic constituents?

I think I'm getting the picture now. It's all for one and one for all, as long as you meet the threshold of wealth you set up for tax breaks - earn too little to buy a home and you're what? You claim the middle class are Democratic constituents, and by reference, the poor are not. What are we/they then - Greens?

Who will stand up for the poor when the middle class has their fingers in the cash register and the Democratic party doesn't think the poor should get the same tax breaks as the richer middle class?

[smoogatz]

52. Putting words in my mouth, aren't you?

Do you really want to pit the poor and the middle class against each other, rhetorically? Isn't that what the Republicans do?

[Cronus Protagonist]

88. No, I simply asked a question and you didn't address it

Neither did you address the other one about why I should pay MORE taxes than you. Why? And if the Democratic party is NOT on my side, why not and who is?

[smoogatz]

115. I answered both of your questions: see above.

Assuming you're as broke as you claim, I obviously pay more taxes than you--both as a percentage of my income and in actual dollars. The Democratic party represents the poor insofar as they are represented, but since the middle class is a much larger percentage of th epopulation than the poor, their interests should also be protected. Anyway, it's a fiction that the poor and the middle class have competing interests. What's good for the middle class stimulates the economy, which benefits the poor.

[Terran]

39. Er, "moving costs"??

Do you think homeoweners get to move for free or something? I spent almost $900 moving this summer and that was just across town.

[Cronus Protagonist]

47. I have to move every two years because homeowners raise the rent

And I get no tax deductions. The appetite for landlords to sqeeze the working poor knows no bounds, and they're getting a tax break on their own homes, and sometimes on their rental units too!

If you have a fixed rate mortgage, you don't move as much and no one will raise your monthly housing fees. On the other hand, my rents keep climbing annually until I leave and bust the bubble again by moving to a more affordable place where they begin the cycle all over again, raising rents on me to satisfy their appetite for my money.

So I ask once more, why should I pay MORE in taxes than you do? Why? And please feel free to explain how this fits into Democratic principles and ideals.

[Dunedain]

50. Do you have renters credit where you live?

Here in Minnesota, I as a landlord provide a form which states total rent paid. The renter receives 15% of that back from the state, aside from any income tax return filed.
As to my appetite for money, I am losing cash on a monthly basis because of an increase in property taxes this year, also because the property went from homesteaded to rental. I cannot raise the rent enough to cover the shortfall because the market won't bear it.Yes, in a perfect world I have and should continue to gain equity in the property, but equity is not cash flow.
As to your question, I don't know what you pay in taxes. Last year, I paid $35,000.00 in federal taxes. My home mortgage interest deduction did little to offset that bill.

[Cronus Protagonist]

91. We used to have renters credit in CA but not now.

Which is a local thing anyway. I'm talking about Federal taxes, but a renters credit would help even it out, if it was as good as the one that my landlady gets while she accumulates wealth beyond my capability.

[Terran]

68. Ok, I find that a little hard to believe

but I'll not assume you're lying about it. But I doubt very much that most people of moderate to low income have to move every two years because they can't pay their rent. Rents simply don't go up that fast in the majority of housing markets because there are limits on rent increases. You might try talking to a prospective landlord and figure out in advance if they plan on gouging you on rent increases annually. Might save you a lot of trouble.

I rented for 20 years before I bought a house this year, and I have only moved four times, and never because of the amount of rent being charged.

[Cronus Protagonist]

92. I'm not talking about the "majority of housing markets"

I'm talking about my own case, which is here in Los Angeles. My landlady's been steadily raising the rent beyond my capacity to pay and this is not new. I have to move frequently because the real market price is lower than the rent increases. Each time I move, I pay several hundred less for a comparable place, and after a few years of increases, I move again to cut the costs.

Meanwhile the landlords are getting tax breaks and I'm not. Is that fair?

[nini]

61. How do you know we don't pay more taxes than you?

quite an assumption on your part eh?

[nini]

59. So, I should be forced out of home ownership because you can't ...

afford to buy?


If this breaks are taken away many of us will lose our homes or not be able to buy in the future. Giving the less wealthy these breaks is the only way many of us can squeeze out buying a home.

Sorry, you can't but I'll be god damned if I'm going to give up my home ownership to keep the top 1% from having to cough up their fair share.


Also, I'm sure I pay way more taxes than those that rent. The break I get hardly sends me onto easy street.

[Cronus Protagonist]

93. I have NEVER advocated taking away your tax break. I want one.

I can't make it clearer. Why should I pay more in taxes than a property owner? Why?

[nini]

101. california has a renters credit.

doesn't help on the fed level I know.

Look, I feel for you because I have been there. I would've been a homeless single mother in the late 80s after a car accident if it wasn't for my family.

The ultimate issue is it takes more out of pocket expenses to buy, maintain and pay property taxes on a place than to rent - WAY MORE. The idea is to help those who invest in communities etc.. to be able to do so.

I put out a buttload in property taxes every year to help the local govt. I still pay a huge federal tax per year even with my deduction. If I didn't have that deduction I would not be able to squeeze out the costs of buying. I'm not talking about some fancy mansion. I'm talking a basic place. I struggle to do this now that I'm in a place where I could afford it.

On the other hand, when I was renting I had no problem with my landlord's tax breaks being it allowed him to provide decent housing for me while being a decent investment for him.

It's the greedy assholes you have issues with - not the average joe trying to plan for retirement one day. It's all about incentives to help people buy more than punish those who can't

[OnionPatch]

71. Well, personally

I believe you should be able to deduct the money you spend on rent. It really is unfair that only homeowners get deductions and tax breaks. Renters really get screwed all the way around.

BTW, I'm a home owner and I'm going to be righteously pissed if they recind this. We counted this in when we decided if we could afford our payments and this will hurt us. And it's all so those greedy, blood-sucking bastards at the top don't have to give up their tax breaks.

[tsuki]

95. Oh, I agree with you. I think we should push everyone further from

home ownership. We should push more than a million a year below the poverty line. Home ownership should be for the elite. /off sarcasm

[berni_mccoy]

7. I heard on Ed Shultz that this isn't as bad as it sounds.

It was reported on the show that the CAP is to be lowered from 1 million dollar mortgages to 300,000 dollar mortgages. This means that any interest you pay on a mortgage OVER 300,000 won't be tax deductable.

However, that means that in places like California and Massachussettes, that FIRST TIME home buyers are not going to get a tax break. Anyone who has less than 300,000 to pay on their mortgage will still get the deduction.

What IT WILL do is effectively POP the housing market. House prices will plummet (could be as much as 60% in values) because so many less people will be able to justify the mortgage. But once the prices come down, then more people will be able to buy... it'll probably take a good year for the market to settle down, but it should force a correction in the prices of homes.

Another downside to this is that people who have less than 40% equity in thier house could be in a very bad situation. If the prices plummet, then they may end up having more $ borrowed than the house is valued at. This could cause many banks to force people to pay the difference or lose the house. It also means that many people may automatically get charge PMI on mortgages that they don't currently pay PMI on.

[Mr_Spock]

11. Yup, it's actually a way to get back money from rich people to make up

for tax cut to rich. It will affect wealthy people a LOT more than regular folks. The number was floated at 300-350k and it was NOT Bush's idea - it was the idea of a group formed to make recommendations. They are actually sticking a stick in Dumbya's eye - the O/P really got this one wrong.

[1932]

30. I think CA is one of the few states where banks can't go after you for

the unpaid balance on your mortgage. I could be wrong. Check with a lawyer before you default on a loan. But, you can see how this would encourage people to buy more house than they can afford.

[Gormy Cuss]

31. One additional point re 300K limit

The commission is suggesting that the cap be the same as the FHA cap for the region. That means that in less expensive markets the cap will be less than the 300-350K tossed around in news stories. For example, in Texas the cap would about 175K. In essence anyone taking out a mortgage over the regional median may have some nondeductible mortgage interest.

You point out two of the most likely effects of establishing this cap, and the latter one, diminishing the equity for existing homeowners, is what most average taxpayers should worry about more than the loss of a few dollars in deductions, IMO. I lived in Boston when the market crashed there about 15 years ago and I knew many people who watched their equity disappear. It took years for some to regain the equity.

[rzemanfl]

8. Responding just to the subject line, have him write Condi another

note.

[Kingofalldems]

9. This won't happen, in fact the GOP will get very Liberal

next year. Happens every time they are afraid of losing seats.

[wuushew]

16. How about eliminating deductions for a second home?

snow birding or summer cottages glorify all that is wrong with American environmental policy.

As a friend of the Earth I say let discourage such conspicuous excess.

[Ishoutandscream2]

36. What a bastard! Way to stick it to us common folks, Boy King

That's a big write off for common folk like me. Once again, Dubya is looking out for his base, the "have mores."

[Skidmore]

38. No kidding. That mortgage interest deduction is the only

thing which helps us break even. We have no children at home anymore and nothing else that would serve as a tax shelter. Can't afford a tax shelter beyond the one over our heads.

[Cronus Protagonist]

49. I'm glad you're rich enough to buy real estate and get that tax deduction

Would you consider giving us poorer renters the same tax break?

[Skidmore]

53. I used to rent for years.

I was a single parent working on an education. I saved part of a down payment for my first home, which had been a rental property. Nothing fancy--a 900 sq. foot slab house on a small lot. I had 3 12' x 10' bedrooms, one bath, and a living area, no separate kitchen or dining room. I qualified for a loan of $3000 with 0% interest toward a down payment and took it. It was due only if I moved out of the home. I owned that house for 10 years and I worked my butt off improving it. My brothers helped me out with some of the heavy duty labor for stuff like drywalling. I painted and scrubbed. I took the tail end of my student loan and bought unassembled cabinets and my friends and I sat around and assembled them over pizza and beer one night. Talk about work. When I remarried, my husband and I worked to replumb the place. We stripped out the bathroom walls to fix the bathroom -- 2 weeks with out a bathroom cause it took that long for the two of us to do. We bought concrete paving blocks on sale and laid a small patio. I landscaped by myself. There was a lot of other work that we did over those years--lots of weekends that we worked on that house instead of socializing. My initial mortgage was $54K--pretty cheap for homes in this area. We moved out of that home 3 years ago, after selling it for $89K. Once the mortgages (equity line of credit to pay for replacing windows because they were damaged and it was essential repair + the original mortgage) were paid off and that $3,000 loan was satisfied, we had enough left over to put as a down payment for a little bigger home that allowed for a growing family. Now, my point is that we are NOT rich and I worked my butt off for this. It was something I worked for and earned. It is an investment too. It is not even really ours yet--we owe the bank a mortgage. You pay rent. When I paid rent, I felt like I was shovelling money down a hole. The difference is, you have some control over your living space.

What would you like to base your tax break on? My property taxes support schools and other services in the community. I pay local, county, and state taxes on that property that you don't have to pay. My going to the expense of improving my residence contributes to the general wealth of the community. It also is something we continually have to budget for. For example, there is a good chance we will have to replace the water heater before the middle of next year. It is being budgeted for now.

[Bridget Burke]

79. I'm a renter who doesn't mind the mortgage deduction.

Not for mansions or second homes. Generally, though, it's a good idea.

But--please stop saying that renters don't pay taxes. I've rented the same house for years & enjoy living there. But my rent has increased along with increases in property tax.

The extra money has NOT gone into maintenance, trust me.

[Cronus Protagonist]

80. I pay all these taxes PLUS PROFIT to the landlady

She may use some of the profit to improve the residence, or not, and either way she's merely improving her equity position in a very valuable investment. Good for her. I'm not against that at all.

Again, why should I pay more taxes than you? Why does no one address the issue but instead talk around it?

[skipos]

106. I am not trying to antagonize but

if you think a mortgage would be cheaper than renting, why don't you buy? Is your credit really bad or something? Many people buy with little to no down payment. And many people are doing interest only mortgage payments, which makes the minimum payment even lower. Or you could do a 7 yr ARM or the like and have a lower payment too.

[Cronus Protagonist]

110. I don't have any money.

See how rich people think? You talk about a "small down payment" and when I talk to real estate agents they talk about $30,000 and maybe if I were able to live in an 800 sf hut, I might get into that for only $10,000 down....

These numbers are just out of the question for someone who doesn't already own real estate and isn't earning a lot of money. And it's not for the lack of trying either.

Besides, what about people who can't, just can't buy real estate. Why should THEY get taxed less than someone who's building equity?

Why?

[skipos]

112. What do you think about

mortgages for NO money down? My friend who is a barber just got one of those. She is very far from rich. Then again, she has good credit.

[Straight Shooter]

56. Do you have a home office?

If you don't, set aside a portion of your home, start a home business of any kind you desire, but be sure it's legitimate.

Now you can deduct the costs of running that business, and the percentage of your rent attributable to the square footage of your office space. This means you'll need to do the 1040-A itemized deductions income tax return, which is a real aggravation, but it may be worth it.

I own my home, but it owns me. The renters next door, they go out and have a good time but I'm over here doing repairs every damn year. Any disposable income I have goes into fixing this or that, or maintaining or trying to improve the place in case I sell. Also, as a renter, if you get crappy neighbors, you can move without too much financial loss. I'm not saying it's easy, but you can do it. However, as a homeowner, if you get a neighbor that is loud, obnoxious, irritating and an a**hole, you're stuck unless you're willing to sell.

I own because I want to make my house look the way I want it to look without asking for permission to make improvements. Otherwise, I would rent. My house isn't worth so much that the deduction makes a big dent in my taxes anyway. I'm far from wealthy in the financial sense.

[Zynx]

40. Over a certain amount, it shouldn't be able to be written off.

For instance, why should a rich bastard be able to build a million dollar house and take out a $900,000 mortgage and be able to write that off?

[Skidmore]

41. So something occurred to me. We've had the wealth grab

going on for about 5 years now. So is this the precursor for the landgrab which will occur after all those people who can no longer use bankruptcy start selling off their property to retire debt?

[Digit]

99. Removing the deduction will cause rents to increase...

Think about it....
Less people able to afford to purchase because they need the tax credit to do so.
That creates more demand for rental property, and more demand means the supply dwindles.
Then lack of supply causes the rents to increase.
The wealthy will be scooping up these properties since they already have a huge break anyway.