patrick.net

What reduction do you favor?

Actually I favor the elimination of the mortgage tax deduction but would accept any reduction as a step in the right direction.

If the mortgage interest deduction gets eliminated, then buyers won't be able to pay as much interest, and banks will lose income.

Buyers would benefit from lower house prices though, since no interest deduction means bidding would be lower.

I bet the banks will block this.

The average mortgage held by an american Family is $222,261 according to http://realtormag.realtor.org/daily-news/2012/01/03/what-does-average-home-owner-pay-mortgage
The annual interest on this at 4% is $8,890 eligible for write off. If the new standard deduction for a family is pushed to $24,000, chances are that family will no longer be claiming their mortgage interest as a write off, since they’ll need $15,110 more in write offs to pass the standard deduction. This probably negates the mortgage interest write off for the grand majority of Americans, while also giving them a de-facto tax break.
Pushing this amount to the $500,000 limit, you’d have $20,000 in mortgage interest write offs, which added to other write offs like state tax, charity, union dues, or child tax credits will easily overcome the new standard deduction. So no change for families already owning an expensive house.

Sniper says

How many people base their purchase decisions based on how much they can deduct from their taxes? That's like the furthest thing from their mind.

Purchasing is all about "buying" the monthly payment. I doubt very few current home owners could even tell you what their MID was last year on their taxes.

This is a question I asked myself when all this discussion came out about eliminating the MID. When we bought we never factored in the MID or tax refund into our budget. It's nice to get back a yuuge chunk at refund time.

Quigley says

This probably negates the mortgage interest write off for the grand majority of Americans, while also giving them a de-facto tax break.

Except that nobody talks about the exemptions that are going away. It's not quite as simple as you list there.

Sniper says

How many people base their purchase decisions based on how much they can deduct from their taxes?

Some people never know when they're lucky. My friend's older brother married in 1965 and rented a small garage apartment. Then his maternal grandmother had to go into the nursing home about 1967 so his mother let them live in her home if they'd pay the rent and taxes. After a year or so of doing neither, she just gave them the house. They still live there, have added a two-car attached garage, a bedroom and bathroom and finished out the attic for living space, but Grace has complained all these years because they didn't have a nice tax refund every year like their best friends--no, but they got a free house.

Like the Elon Musk scam without subsidizing Jumbo Loans and giving them tax breaks, houses can't stay artificially inflated.
I say do away with all MID, and just give the standard deduction.

Patrick says

If the mortgage interest deduction gets eliminated, then buyers won't be able to pay as much interest, and banks will lose income.

I want to see Interest rates on Mortgages being at 6% and that considered low. I want to see at least a 4% Fed Rate and Saver getting 3%.

There will be a huge incentives to build and move houses in bulk. Not this piddly making flippers rich one house at a time. They should be so cheap it's the money that should cost you. So we can afford to build Middle class Suburbs again now that we've thrown those Pickle Head Liberal Pussies out. We don't have to live in the Luxury rental complexes in the City anymore.