Now's the time to end the mortgage interest deduction, Amity Shlaes argues; the housing...


Now's the time to end the mortgage interest deduction, Amity Shlaes argues; the housing industry's old canard about such a move destroying the market doesn't hold much water - we're already there. People actually "might well invest more in houses than we imagine if, for once, they know what those houses are really worth."
Comments (32)
  • mike8599
    , contributor
    Comments (588) | Send Message
     
    Getting of the deduction as part of a tax reform / simplification package may not be a bad idea - but just getting rid of it so the government can have more money is bad beyond belief.
    1 Sep 2012, 09:24 AM Reply Like
  • Ray Lopez
    , contributor
    Comments (1818) | Send Message
     
    Borrow and spend = die hard Republican party politics = long term problems. Pay as you go is more sensible, and Amity is correct, even and especially as a revisionist right-wing conservative historian.
    1 Sep 2012, 09:56 AM Reply Like
  • Shaun Connell
    , contributor
    Comments (360) | Send Message
     
    Republicans want to cut spending to pay as we go and Democrats want to raise taxes to pay as we go.

     

    Hint: we can't raise taxes enough to pay as we go, but we CAN cut spending enough.

     

    Democrats are essentially waging war against economic reality, and we'll all lose that war.
    1 Sep 2012, 10:00 AM Reply Like
  • Ray Lopez
    , contributor
    Comments (1818) | Send Message
     
    " Republicans want to cut spending to pay as we go" - says you. Or says their 'campaign promise'. But history has shown that they will not cut defense, that they will not balance budgets and they will, like Reagan and Bush II, cater to become populists. And maybe even start a war or three. No wonder many traditional Republicans have switched to voting for the Democrats--like me--and will continue to do so. The Democratic Party makes better governors, given our mixed economy (sadly 40% of GDP being government). Short of Ron Paul, I don't see myself voting for the Republicans anytime soon.
    1 Sep 2012, 10:28 AM Reply Like
  • Rhianni32
    , contributor
    Comments (2086) | Send Message
     
    Yes clearly we saw spending cuts with the two wars, TSA, and Dept of Homeland Security.

     

    Shaun just call it what it is...
    both parties want to increase spending on what they want and cut the spending on the other party's wants.
    1 Sep 2012, 10:39 AM Reply Like
  • mike8599
    , contributor
    Comments (588) | Send Message
     
    Scott Walker and Chris Christie are terrific governors who make the tough decisions and get excellent results on all metrics.. unlike Jerry Brown, or John Corzine.... so that premise doesn't hold.

     

    The US Constitution says that the job of the federal government is to protect the security of its citizens - hence military spending. The Constitution does not say give everyone gets the same health care. So unless we change the constitution lets try to follow it.

     

    Most of the younger crowd I'm talking to are starting to "get it" - they want to get on with their lives and see no way path forward voting Democrat. Even the ones doing well are seeing classmates struggling, and don't like it.
    1 Sep 2012, 03:22 PM Reply Like
  • zorrow
    , contributor
    Comments (2581) | Send Message
     
    Rich conservative darling, and Hot house orchid, Yale graduate and mother of four Amity Shales doesn't need the mortgage deduction in order to provide a home for her children--therefore the rest of the Middle class can go suck an egg.

     

    Very Paul Ryanesque idea.
    1 Sep 2012, 09:35 AM Reply Like
  • Shaun Connell
    , contributor
    Comments (360) | Send Message
     
    Right, raising taxes is exactly what Paul Ryan is all about.

     

    Oh wait.
    1 Sep 2012, 09:45 AM Reply Like
  • mike8599
    , contributor
    Comments (588) | Send Message
     
    Let's talk about Shales and not the content of the article..... WT!

     

    really zorrow
    1 Sep 2012, 09:49 AM Reply Like
  • zorrow
    , contributor
    Comments (2581) | Send Message
     
    I apologize---I said "suck and egg" --I meant "let them eat cake".
    1 Sep 2012, 12:20 PM Reply Like
  • zorrow
    , contributor
    Comments (2581) | Send Message
     
    Paul Ryan is just about a free gym membership--I can't find anything else he really believes in. I mean he left his paramour Ayn Rand in the dust to chase his new girlfriend---ambition.
    2 Sep 2012, 09:54 AM Reply Like
  • mike8599
    , contributor
    Comments (588) | Send Message
     
    Really ? - try to read something other People & Glamour mags.... unless you care about who Michelle O is wearing, or the super power wishes of the pres.
    2 Sep 2012, 10:17 AM Reply Like
  • wyostocks
    , contributor
    Comments (9113) | Send Message
     
    zorrow
    And please enlighen us know nothings as to just what Biden has brought to the office of Vice President these almost four years.
    Besides of course the summer of recovery in 2009.
    2 Sep 2012, 10:46 AM Reply Like
  • WMARKW
    , contributor
    Comments (10786) | Send Message
     
    Humor ????
    2 Sep 2012, 11:10 AM Reply Like
  • zorrow
    , contributor
    Comments (2581) | Send Message
     
    The contrast is social conscience Christianity versus Ayn Rand social Darwinism-- (two versions of Catholicism-I think not--and neither did the bishops of Ryan's professed religion who rendered their opinion on his budget).

     

    Back to the topic at hand--why didn't golden girl Amity suggest that the mortgae deduction be limited to one home-your domicile--and be limited to a loan of $500,000 and phased out as the loan amount rises. That way the people who could use help purchasing a house, would get help and the abusing overclass would have one less tax break.
    2 Sep 2012, 05:59 PM Reply Like
  • mike8599
    , contributor
    Comments (588) | Send Message
     
    Social Darwinism is just another way to say capitalism, or is simply a truism that comes from the capitalistic concepts. So yes I would expect Ryan to support those ideals.

     

    My assumption is the most folks here on SA probably buy into the whole concept of capitalism and would reject most socialistic views or forced limits on their own prosperity, that you would / have proposed.

     

    Because dems are typically lousy stewards of society's less unfortunate they always feel the need to force everyone to give.
    2 Sep 2012, 07:16 PM Reply Like
  • zorrow
    , contributor
    Comments (2581) | Send Message
     
    I think most folks here like gambling. They don't even notice that four companies control 90 % of the bid and offers and that one of those companies has admitted to having software that in the "wrong" hands could be used to manipulate the market.

     

    I think most are happy if the game provides them with a few crumbs. I think most will fold like a cheap suit, when the masters of the universe, decide its time for the harvest, and start their counter plays with inside vision.
    8 Sep 2012, 12:56 PM Reply Like
  • PeakOiler
    , contributor
    Comments (299) | Send Message
     
    Heh, and 'mericuns don't believe in welfare, mortgage interest deductibility is one of the biggest welfare schemes ever. Get the bums off welfare and make 'em fend for themselves like the rest of the world.
    1 Sep 2012, 09:36 AM Reply Like
  • Shaun Connell
    , contributor
    Comments (360) | Send Message
     
    Tax breaks aren't welfare. They're just the absence of extra government theft.
    1 Sep 2012, 09:46 AM Reply Like
  • sean.parmelee
    , contributor
    Comments (791) | Send Message
     
    They are so welfare, because they're paid for by higher taxes on those without mortgages. Consider this example: a young person who just got out of college will pay a higher tax rate so that his parents, who have a higher standard of living than him, can pay a lower tax rate. Same as paying a higher tax rate so that your wealthier neighbor with a Prius and new appliances can pay a lower tax rate. The list goes on.
    1 Sep 2012, 11:20 AM Reply Like
  • wyostocks
    , contributor
    Comments (9113) | Send Message
     
    sean
    Your example assumes there is a balance of taxation in the implementation of taxes. There is no such thing. Just because one pays less doesn't mean someone else pays more. If that were so there wouldn't be the deficits that we have.

     

    Also, what do you think will happen to rents if the building owner can no longer get a deduction on the buildings mortgage?
    1 Sep 2012, 11:41 AM Reply Like
  • sean.parmelee
    , contributor
    Comments (791) | Send Message
     
    That's a fair point. Our government cuts taxes for one group, through a deduction or simply outright, and then never makes up the difference. But that is not how government ought to work, neither in your mind nor in mine, so the point is moot. In a rational government that takes in no less than it pays out, tax deductions are a transfer of wealth.
    1 Sep 2012, 02:03 PM Reply Like
  • wyostocks
    , contributor
    Comments (9113) | Send Message
     
    sean
    "a rational government "

     

    Now that is a novel concept.
    1 Sep 2012, 02:13 PM Reply Like
  • sr1977
    , contributor
    Comments (365) | Send Message
     
    We already had the chance to see what "houses are really worth" and none of the sellers or Bankers wanted anything to do with it. How would eliminating the mortgage interest deduction (and theoretically lopping 10-15% off the value of a house) change that? The Answer is, it wouldn't. They would just redouble their efforts to keep inventory off the market and in the end we would wind up where we are today.
    1 Sep 2012, 09:39 AM Reply Like
  • wyostocks
    , contributor
    Comments (9113) | Send Message
     
    Ben hasn't done enough to screw the middle class lets think up new and better ways to drive them into the ground.

     

    If anything, put in a means test and combine it with cuts to other programs.
    1 Sep 2012, 10:02 AM Reply Like
  • Archman Investor
    , contributor
    Comments (3316) | Send Message
     
    Glad I was able to grab some more physical during the past 8 month beat down. Compliments my overall portfolio.

     

    How long until the true confiscation phase of this country gets going?

     

    Tick tock.
    1 Sep 2012, 10:09 AM Reply Like
  • Ray Merola
    , contributor
    Comments (6473) | Send Message
     
    Canada doesn't have a home mortgage deduction and they have a housing market that has been more robust than the U.S. for a long time. Most of the developed world doesn't have a mortgage deduction. It was placed into the tax code years ago via lobbying by the realtors' group to juice home ownership "affordability."

     

    Used to be not so long ago that one could also deduct other kinds of consumer interest (credit card, car loans, vacations), but if memory serves me Reagan did away with that in 1986.

     

    All the auto companies, vacation hotspots and CC businesses hollered and whined: I could hear them for miles! Then Low and Behold, the market took over and those industries fared just fine. They even thrived. Who woulda thunk it?

     

    Home mortgage interest is fine to go if it's part of comprehensive tax reform: just like Reagan supported and signed into law in 1986. The U.S. went on an economic tear afterwards.

     

    History is a great teacher. However, so many folks always think "now is different." It isn't.
    1 Sep 2012, 10:35 AM Reply Like
  • Tricky
    , contributor
    Comments (2426) | Send Message
     
    We don't like to learn from other countries. Please don't bring up those examples. We don't like data that goes against our ideology, so please stop it, you're hurting my ears.
    1 Sep 2012, 12:00 PM Reply Like
  • Mad_Max_A_Million
    , contributor
    Comments (1175) | Send Message
     
    The home owner with a mortgage is now double dipping.
    A. They get the tax write off.
    B. Every time Bernanke kites a Trillion in funny money, the true cost, i.e. value of their mortgage takes a dive.
    Time to put them on the same diet as the retirement saver.
    He gets ripped off by diluted funny money and then his measly interest is taxed again.

     

    Sort of like getting screwed both ways.
    1 Sep 2012, 11:04 AM Reply Like
  • mike mohr
    , contributor
    Comments (452) | Send Message
     
    Mitt+Pyan = destroying middle class. Many people bought their homes based on the mortgage deduction. Taking that away not only destroys the middle class it will destroy their home values. This is a good plan because he only pays 14% income tax unlike us.
    1 Sep 2012, 12:23 PM Reply Like
  • sean.parmelee
    , contributor
    Comments (791) | Send Message
     
    Never eliminate existing programs. Never take away existing entitlements. Always create new programs. Always create new entitlements. No hope for real change.
    1 Sep 2012, 02:05 PM Reply Like
  • Ray Merola
    , contributor
    Comments (6473) | Send Message
     
    A couple more historical benchmarks:

     

    While I have not studied Mr. Romney's tax returns, in the event he pay a 14 percent income tax rate is primarily due to two tax regulations:

     

    First, the long-term rate on capital gains and dividends is 15 percent. Unless you're in a lower income bracket and then it's even less.

     

    Since these gains have already been taxed once at plus or minus 35 percent or so (the business tax rate), all the tax law is doing is encouraging capital formation. Indeed, the short-term capital gains rate is taxed a normal income. So traders and speculators don't generally get the break.

     

    Taxing dividends at a normal income rate doesn't generate much additional income for the government: companies either buyback stock instead of maximizing dividends and /or investors focus upon moving dividend payers into tax deferred accounts.

     

    Funny how for generations people generally don't like to overpay the government.

     

    The other regulation that helps people like MItt is the tax-exempt interest on municipal bonds. The reasoning is that governmental entities can then borrow at effectively lower rates than businesses, since creditors will accept lower rates. This permits them to borrow more money, since the interest to service the debt is significantly lower. Wow....who would have thought that our tax laws would subsidize more government spending....and then some smart politicians would spin it around and castigate those who take up the other side of the deal.

     

    Of the two tax breaks, I'd be all in for eliminating the tax-exempt treatment of municipal bonds. Let the government entities fend for themselves like private corporations. If they borrow less in the process: maybe that's a good thing.

     

    There's very little new under the sun. You can watch the movie ten times and the ending is always about the same. What Reagan did in the 1980s goosed the economy since whether we want to hear it or not, the rich and those with money create jobs. The current uncertainty of tax and regulations are choking many U.S. small businesses (and large ones). Large businesses have the added dimension of moving jobs and their companies overseas, too. It's called competition and capitalism, nothing more or less.
    1 Sep 2012, 02:12 PM Reply Like
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