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View Diary: Robert Reich Gets It Right (171 comments)

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  •  The mortgage interest is a NON starter (3+ / 0-)
    Recommended by:
    MKinTN, DMiller, gramofsam1

    What we need is regional adjustments, because if you live on the west or east coast you most likely have high mortgage payments due to the cost of housing.

    Here in San Jose, for a small starter home in an ok neighborhood you can spend $500,000, twenty percent down still leaves you with a $400,000 mortgage, payments at 4 percent interest are almost 2,000 a month (and most of that is all interest in the early years).  Add property taxes to that amount (easily 6,000 or more a year) and few people will be able to afford a home in this area.

    do the adjustment and allow higher mortgage deductions for people living in higher cost of living areas, otherwise forget this completely.

    •  Good points. Indexed to cost of living/housing (0+ / 0-)

      would make sense. Also, as someone suggested above, it should be phased in over time, beginning with $12K + 90% above deductible, $12K + 80% deductible, etc. And that $12K, as you suggest, should only apply in bottom-end R.E. markets.

      Purging predominantly minority voters and requiring them to present IDs to vote in the face of VIRTUALLY NON-EXISTENT VOTER FRAUD is RACISM! I hereby declare all consenting Republicans RACISTS until they stand up and object to these practices!

      by Words In Action on Tue Nov 13, 2012 at 10:54:49 AM PST

      [ Parent ]

    •  Yes (1+ / 0-)
      Recommended by:

      I agree, and it's contradictory to limit this deduction to only $12,000, and then say that there is no increase in middle class taxes, because at least for this middle class taxpayer, and almost every homeowner I know in California, it would be a significant hit.

    •  Medicare Drug Prices (4+ / 0-)

      And can we pass the Medicare Prescription Drug Price Negotiation Act of 2011 or similar as proposed by Sen. Klobuchar?  Please?  Pretty please?

    •  Mortgage interest deduction should be phased out (1+ / 0-)
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      Over time.  Why are renters subsidizing owners?  That is, why are the less wealthy on average subsidizing the more wealthy on average?  

      I've been a homeowner.  It's a great benefit.  It also doesn't make any sense.  

      •  I don't think 'subsidizing' means what you (0+ / 0-)

        think it does. The definition of 'subsidy' isn't "no tax'.

        •  It's a subsidy (0+ / 0-)

          Renters pay higher taxes than owners who are paying interest on a mortgage.  The government has to account for the cost of the deduction.  This deduction, like all deductions, is a "tax expenditure."  Even the government considers it spending.  The higher taxes paid by renters are going, at least in part, toward that tax expenditure.  That is, the renters are subsidizing (by their higher taxes) the owners (who have a smaller tax liability).  More cash is leaving the pockets of renters, and more cash is staying in the pockets of owners.  

          That's a subsidy.  A 90 billion dollar a year subsidy (that's more than we spend on the Department of Education).  

          While finding the cost, here's another interesting bit on that:  "First, the home mortgage interest deduction flows mostly to the top half of the income distribution –the people who can afford to pay the mortgage, taxes, insurance and maintenance on a home. Households earning over $200,000 a year capture about a third of the $90 billion in tax benefits. Those earning between $100,000 and $200,000 captured another 42 percent of the benefits.

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