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View Diary: Two million jobless Americans face their own fiscal cliff if unemployment benefits expire (112 comments)

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  •  It won't be eliminated for business properties (3+ / 0-)
    Recommended by:
    cany, Eric Nelson, Lujane

    That still will obviously be considered an expense for the purposes of your income from the property.  There's no way that would be eliminated.  Doing so would set a precedent that basically throws the entire taxation of businesses for a complete loop.  

    If you can't deduct your expenses from income you're basically just getting taxed on gross receipts, which is not an accurate measure of a business's success.  

    When people talk about eliminating the mortgage deduction it's for non-income producing properties.  In other words, second homes, vacation homes and so on.  

    •  Got it, thanks. (1+ / 0-)
      Recommended by:

      202-224-3121 to Congress in D.C. USE it! You can tell how big a person is by what it takes to discourage them. "We're not perfect, but they're nuts."--Barney Frank 01/02/2012

      by cany on Mon Nov 12, 2012 at 03:19:53 PM PST

      [ Parent ]

    •  The mortgage deduction... (4+ / 0-)
      Recommended by:
      Lujane, Sparhawk, gosoxataboy, qofdisks

      ...could be removed for primary residences also.

      I think it should be, but using a very long phase in period to avoid a sudden shock to the housing market -- perhaps over thirty years with 2% reduction each of the first ten years, a 3% reduction in each of the following ten years and a 5% reduction in each of the last ten years.

      The mortgage deduction is a throwback to the antiquated "everyone should own a home" notion when people tended to live in the same place for decades and jobs were not as fluid.

      The deduction increases housing prices making it that much more difficult for people to buy their first home unless they have enough income to benefit substantially from the mortgage deduction.

      A substantial portion of the benefit also ends up in the pockets of builders and speculators due to these increased housing prices.

      It's also a subsidy for tax payers in high income areas -- if we want to subsidize those in high income areas, just index the Federal Income Tax rates by cost of living in the area the tax payer lives.

      Of course, builders and real estate agents won't like this idea.

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