How much money would be raised if they eliminated the mortgage interest deduction?

[closeupready]

Because I rent, and that's a BIG part of the federal budget, as I recall. They could use that to bail out Wall Street.

[wryter2000]

1. Don't even go there

There goes 50% of the population who vote.

[closeupready]

2. Oops. Never mind, then.

:D

[JuniperLea]

3. Mortgage interest deductions are all we have left!

Don't even suggest it! We'd have a lot more failed homes/families on our hands.

[kiranon]

8. Alternative minimum tax takes even that deduction away. n/t

[JuniperLea]

19. It still works out ok...

With the minimum tax, the outcome is better than with the mortgage interest deduction. I was afraid of this too... my accountant of many years worked my last return twice so she could show me how it benefits me. But she is into the whole "redistribution of wealth" deal. She has charts and graphs that make my head spin:)

[dkofos]

10. Thanks to ronnie raygun

[JuniperLea]

24. One among many of his ignorant, money grubbing moves...

I'm reminded of his horrid treatment of the mentally ill whenever I drive through any big city and see all the homeless. There are so many who are clearly mentally ill and in danger on the street. Ronnie seemed like such a nice guy... but I hear tell the Devil himself was the most beautiful angel in heaven at one time;)

[peace13]

4. Don't kid yourself.

Your property tax is figured into your rent. Everyone pays property tax.

[Sebastian Doyle]

5. I'd rather see a rent deduction added, than eliminate the mortgage deduction.

However, there should be a law that you can only deduct mortgage payments on ONE house.

[hedgehog]

13. I could go along with limiting the mortgage deduction to one house.

I would put in a second limit:

In theory, your housing costs should be 25% of your income at most. I would somehow figure out what that would work out to if we applied the mortgage deduction only for your Social Security income; wages earned up to the limit of the Social Security tax.

[Taverner]

6. better idea - 1% National Sales Tax

You would be surprised how much cash we could pile up with that...

[CTyankee]

14. It's an idea, but one that might morph into the flat tax scenario later on.

Also, it is regressive and hurts the poor a lot more than it hurts the rich.

[Taverner]

16. Very true

There's a lot of reasons against it.

You could exempt food, housing and clothing...

[Romulox]

18. Regressive. Raise income taxes on those earning more than $250,000.

[Taverner]

22. The problem with the income tax is the loopholes

Granted, I'm all for that. Let the rich bail out their buddies.

[radfringe]

7. repeal the freaking wealthy-fare bush tax cuts n/t

[lib2DaBone]

9. OMG.. Dont even Mention it....No Car loan..No credit card Interest

[CottonBear]

11. Not sure. I've owned a home since '95 & I've only been able to deduct mortgage interest one time.

I was single and then married filing jointly with no dependents and not enough expenses and interest to itemize once the personal deduction levels were raised. I was only able to deduct IRA contributions and I always claimed zero deductions on my W2 forms.

You can only deduct interest if you 1.)have a mortgage (paid off former mortgage holders and renters are out) and 2.) have enough deductions to itemize and 3.) have paid a huge amount of interest which means you are really in debt.

edit: I don't owe a huge amount on my home but I do owe and took out a 30 year mortgage when I bought my home.

[jobycom]

12. Your rent would go up dramatically.

The deduction your landlord gets is used to calculate his or her profit, which sets your price for rent. So don't think you aren't getting that deduction, too.

[hedgehog]

15. The reason for the mortgage deduction is to encourage

home ownership. You are correct in your implication that it is biased against renters, but there you are. It is in the same category as (proposed) deductions for energy saving investments.

[Romulox]

17. It's actually YET ANOTHER subsidy to the banks, if you think about it.

If mortgage interest couldn't be deducted, then the amount banks could charge in interest would decrease.

[AlCzervik]

20. Renters imo should be allowed to write off a portion of their rent, in some states i think

you can but it should be allowed in all states. I'm at the point in my mortgage where my interest deduction is almost nothing but i think there is unfairness to renters.

[mmonk]

21. Are you for completely killing off the housing industry?

if we can ever bring it back (housing and building market), it has always been the one thing that got us through recessionary times.

[Romulox]

23. MOST OF US live in a laissez-faire capitalist nightmare. Why should SOME parts of the economy

have to compete, while others are heavily subsidized?

[JuniperLea]

25. When the guys who make millions give their fare share...

The rest of us can let go of tax deductions.

[Midlodemocrat]

27. Ever notice that it's never a homeowner who touts these asinine ideas?

Methinks I sense sour grapes.

[hfojvt]

26. do not believe the naysayers. Itemized deductions do not benefit the middle class

Not primarily.

Here's the link to IRS stats
http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html

What I just computed for 2006. Itemized deductions were 1.2 trillion. The average standard deduction was $7,000. Taking that same average, the standard deduction for people who itemize would be $344 billion. Meaning if itemizing deductions was eliminated, as I suggested long ago
http://www.journals.democraticunderground.com/hfojvt/25
that would create another $800 billion in taxable income, creating another $160 billion in revenue if the average tax rate was 20%.

Now, more details. 27% of the benefits of itemized deductions goto taxpayers with more than $200,000 in income. Only 2.9% of taxpayers had over $200,000 in income. So that 2.9% got 27% of the benefits. 52% of the benefits of itemized deductions goto taxpayers with more than $100,000 in income. That is closer to middle class in some urban areas. However, only 12% of taxpayers had more than $100,000 in income. So that 12% gets 52% of the benefits. Only 35.5% of 138.39 million tax filers itemized deductions in 2006. 59% of them had less than $40,000 in income.