Don`t look to special interest groups for tax policy

mwright | Feb 28, 2013 05:05 PM ET Don`t look to special interest groups for tax policy. Realtors are as myopic as everybody else, maybe worse, and are the epitome of NIMBY thinking. Of COURSE they are going to fight it. The key is to GRADUALLY wean the industry and the country off these tax expenditures.

MAPMike | Feb 28, 2013 05:06 PM ET Typically you do have other deductions, hand in hand with the interest deduction is deducting your property tax. In CT that`s several thousand for a 3 bedroom colonial. Kids grow out of clothing so donating lightly used clothing helps others. Child care tax credits if you need more than one salary are deductible also. Mortgage interest makes up about 1/2 of our deductions. You`d have to lower rates a lot to make the standard deduction a net zero move for the middle class. (however that is defined) If you are buying a 2nd home, I can see limiting or eliminating that loophole.

OldNumber7 | Feb 28, 2013 05:45 PM ET Re this above post "You`d have to lower rates a lot to make the standard deduction a net zero move for the middle class." That`s not really true. Let`s say a working class household with income of $40,000 has financed $100,000 on a home at 4.5 %. That`s a monthly payment of $631, most of which is interest, or about $7500/yr. That`s $1400 better than the standard deduction and reduces the total tax bill by another $350 -- that`s it: $350. A tax rate reduction of just under 1 percent accomplishes the same thing. It`s a shame if you gave folks in this situation the choice of a 2 percent rate reduction or keeping the mortgage deduction, many would stupidly choose the latter.

Earth_Scientist | Feb 28, 2013 05:45 PM ET We have 300 million people, about 200 million tax-payers, and only 40 million mortgages. So, why do we need such a big subsidy for 13% of the population and only 20% of the taxpayers ? The answer is that we don`t need it. It is a policy error. 1. Eliminate the 2nd home mortgage and home equity loan deductions this year, 2013. 2. Reduce the deduction limit from $1M to only $500k in 2014. 3. Reduce the deduction limit to $250k in 2015. 4. Reduce the deduction limit to $120k (3x median income) in 2016. If you do it gradually like above, it will help to make housing affordable again. Plus, we will stop encouraging people to go underwater on debt and realtors/lenders/appraisers committing fraud to help borrowers sink themselves. While, raising up to $100B/yr in revenue by%

Earth_Scientist | Feb 28, 2013 05:47 PM ET While, raising up to $100B/yr in revenue by closing a loophole of rich. Who cares if the housing complex cries ? Homebuilding is less than 0.5% of the economy: a pimple on an elephant. Let`s go.

CommonSenPlease | Feb 28, 2013 05:51 PM ET Many and most entreprenuers start their businesses from their home. They use their homes as collateral to borrow and raise capital to start small businesses. Can`t go to a bank b/cos the banks want 3 yrs business financial statements to even consider a loan. How can new business provide 3 yrs f/statements!? Some use credit cards which is obviously very expensive. Take away the interest deduction and the implications to small businesses and entreprenurialship will cause great harm to the US innovations. Not only it makes raising capital very difficult, it suppress small business development, jobs, inventions, community development, and lower our competitiveness. These are the indirect cost not visible. So, it`s not a straight interest deduction on your tax returns!!!

CommonSenPlease | Feb 28, 2013 05:57 PM ET FYI, Apple Computer began in a small home in a garage. Trying starting business in a rented apartment or rented home and you will get all kinds of warnings from the landlord or even some condo association.

FrontRunnin | Feb 28, 2013 05:58 PM ET Eliminate the $100 billion give-aways of Earned Income Tax Credit for deliberately single mothers (mainly from Obama`s people) who don`t pay taxes to begin with (yet get tax credits paid to them go figure).... Eliminate the $100 billion of Sect. VIII Housing Vouchers also mainly paid to so-called "minorities" giving half of Obama`s people free housing or very subsidized housing. There, that`s $100 billion right there. Let them pay taxes and pay their own rents for a change, like the rest of us.

4x4bob | Feb 28, 2013 06:25 PM ET This is not a rich person tax loophole, itemized deductions PHASE OUT for the upper income brackets. At least as it stands now, the phase out will return in 2013 (it disappeared for a couple years). So this interest deduction only helps the lower & mid income people.

ForLiberty | Feb 28, 2013 07:25 PM ET So who elected who in this country? I get the feeling that WE THE PEOPLE are not demanding an end to the mortgage interest deduction. "Public Servant" now is an "government official" that contiunes to operate in a vacuum making our lives more difficult and they exempt themselves from the law. We are on our way to becoming a failed State.






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