Mortgage Deduction Is Popular, but Few Claim It

Jay070 | Dec 5, 2012 11:36 AM ET In an honest country, there wouldn`t be tens of thousands of pages of tax code and a news media pretending most people benefit from it when they don`t.

lunasea2 | Dec 5, 2012 12:01 PM ET Ya gotta love statistics... but not the media who are obviously incapable of understanding or interpreting them. For example, in Maryland, where 37% take advantage of the mortgage interest deduction the total population is 5.8mm (2012 census) versus CA, where (according to the article) "only" 27% take the deduction, population 37.7mm or about 6 times the population of MD. Now, which has more impact on the national "cost" of this deduction? In other words, there are about 10MM people in CA who take the deduction or almost twice the entire population of MD... Now, why is it that NY state is not included in the list of "expensive" places to live? Or any of the other Northeast states? And why aren`t we talking about indexing the "standard deduction" as a means to impact th

beachguy2424 | Dec 5, 2012 12:23 PM ET Maybe its because home ownership is dying and more people are becoming renters.

giofls | Dec 5, 2012 12:32 PM ET All changes to tax code should have a waiting period or be tied to when a decision was made. Whether the mortgage deduction is "good" or "bad" (whatever that means), people who took mortgages made a long-term commitment expecting it to be there. If the plan is to end the mortgage interest deduction, then tie it to when the mortgage was taken. Same goes for long-term capital gains rates. We can debate whether the rate should be 15% or 25% or 35% or 0%. But the rate should be based on when someone BOUGHT the asset in question, because that was the basis for their decision making. Income tax changes should have a 2 to 3 year waiting period before they take hold. Reality is that tax rates affect every decision we make. For most households, taxes are their single

MBAstylethinking | Dec 5, 2012 12:36 PM ET Any tax benefit from the deduction is immediately passed on to the realtors/mortgage providers/banks. You think you`re saving $X, but the price of what you`re buying immediately goes up by $X. The entire deduction is and always has been a payday for the industry. People should buy a house because it suits their needs and becomes their private property. If the price is right and the product is right, people will buy it. This deduction needs to go! Let housing prices adjust accordingly. The realtors and mortgage lenders can eat it. If you paid too much for your house, congrats - you made a bad choice and can eat the loss yourself. Stop looking to your neighbor to bail you out of your poor choices in life.

Speculate717 | Dec 5, 2012 12:41 PM ET Just more welfare for the rich: kill it!

giofls | Dec 5, 2012 12:41 PM ET It appears my prior comment got cut off... Reality is that tax rates affect every decision we make. For most households, taxes are their single biggest expense. Remember, taxes include Soc Sec, Medicare, Fed Income, sales tax, property tax, state income tax, gas tax... and the list goes on and on and on. The idea that govt can simply decide to change people`s biggest expense with no notice and no alternative is ludicrous.

PaysTax | Dec 5, 2012 12:46 PM ET The use of the deduction is highest in Maryland (37% of taxpayers) because state taxes are high, and housing cost are high (therefore high mortgages). When you add the state tax and the mortgage interest, that is more than the standard federal deduction. So, the deduction actually increases housing costs, which helps realtors. I say eliminate this tax expenditure, and lower the tax rates for everyone! Of course it needs to be phased in. An average mortgage is held less than 7 years, so phase out the allowed deduction over 5-7 years. Set the baseline on each taxpayers 2012 mortgage interest claimed on Schedule A of their federal tax return, and reduce max amount each year until it is zero. This avoids people buying after the law is past to "get in under the wire".

Glenn1954 | Dec 5, 2012 12:52 PM ET In the article the author talked about a family living in San Diego. and my reply is simply: Why should I indiredtly subsidies your California life-style? My adult daughter made the choice to move to San Diego too, and I told her not to expect dad to subsides that choice. It is a free country (Ok, it`s not), the choice to live there is your, don`t expect others to fund your choices. The mortgage deduction needs to end, it is a subsidy for the rich and wanna-be rich. I have no desire to subsidies someone`s 5000 sqft home in California, Maryland. or their second home (villa) in Vail or Aspen. It`s time to fix the tax code and end all or nearly all deductions. This alone will greatly decrease the influence of special interests in Washington.

PaysTax | Dec 5, 2012 12:57 PM ET "The average deduction is more than $12,000 a year per taxpayer, easily surpassing the standard deduction ($11,900 for a married couple filing jointly for 2012)... The cost of a house in Maryland can approach $500,000" Let`s be more average with a $200,000 mortage, At 4.5% mortgage rate, the 1st year interest is $9,000, and for a family making $60,000 per year paying MD state income tax of 7%, that is another $4,200. Total of $13,200 is higher than the federal standard deduction.






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