patrick.net

The mortgage interest deduction isn't worth as much as people think that it is because of the standard deduction, which I call the house minimum, and the fact that it's a deduction. not a tax credit, so the impact is about 30% (to include state income tax) of whatever is deducted in excess of the standard deduction.

Of course, your results may vary depending on tax rates in your area. It is quite possible that you have state income tax well in excess of the standard deduction. I know that I do.

I think that we'r going to see broadening of the tax base in the next couple of years, and the mortgage interest deduction is a tempting target. Remember, most states base their taxable income on federal adjusted gross income and disallow some things that are allowed under federal las such as state income tax.

Ruki says

True or false: There are way more middle class folks with mortgages above $250k than there are wealthy people with mortgages above $250k.

I don't know. What I do know is that the majority of the MID $$ goes to the wealthy. The average middle class household gets ~$329 in tax savings while the average rich household gets $1,322 in tax savings.

Ruki says

You keep demanding me to prove a (bogus) negative, so please prove that at least.

I'm doing nothing of the sort. I'm asking you to provide ANY evidence that the MID benefits Dems more than Reps. Because ALL the data I've seen shows the exact opposite.

My compliments on the intelligent comments! Regardless of who gets elected the mortgage interest deduction will get capped at $500,000!

Ruki says

A middle classer with a $700k condo mortgage sure as hell NEEDS that MID more than a rich person with a $400k mortgage, as I keep saying but you keep ignoring.

I'm not ignoring it. It's just completely irrelevent to the discussion. A middle classer with a $800K mortgage needs it even more. So what? You have NO idea if these people even exist, much less who they vote for.

Ruki says

There are way more middle classers with extremely high mortgage burdens than rich people too, as the BA and other areas prove beyond a doubt.

lol--just because you say it doesn't prove it. You have absolutely NOT proven that people in the BA have extremely high mortgage burdens. Or that they are middle class. What do you consider middle class anyway?

Ruki says

Ergo, who really gets screwed the most here if the MID is capped?

As I have proven beyond a shadow of a doubt, it's mainly Republicans.

Ruki says

Numerically, there are WAY more middle classers who do and need it more than the rich.

Source?

Still waiting for the math you keep promising.

Ruki says

A middle classer with a $700k condo mortgage sure as hell NEEDS that MID more than a rich person with a $400k mortgage, as I keep saying but you keep ignoring.

The only places in the country where "middle class" is a 700k condo is NYC and the bay area. I don't know about the bay area, but once you get more than an hour outside NYC 200k-300k houses are pretty common if not the norm. That's a pretty limited number of people you are talking about.

Ruki says

That's because you aren't analyzing it correctly. So what if rich Republicans get more back from the MID when looking at the total pie? Numerically, there are WAY more middle classers who do and need it more than the rich.

No you aren't analyzing it correctly because you are focused on a very tiny subset of the population in a very tiny geographic area. You may find it hard to believe but the bay area is not the entirety of the universe. Middle class everywhere but la la land, including huge swaths of blue on your map, is generally considered 40 to 90k. They don't have 700k mortgages and don't use MID because the standard deduction covers it. Over 100k in income is the top 10%. About 2/3 of the MID benefits goes to people over 100k. They vote majority republican. Read that again, 2/3 of MID goes to people with over 100k in income. There isn't a few rich republicans spiking the number. It is broadly based. It has to be because the MID cuts off at 1 million total mortgage. That includes a lot of people well off enough to own second homes. Obviously you lack the ability to comprehend and analyze this thought through to the logical endpoint yourself.

Where exactly is your proof that the wealthy in the bay area vote overwhelmingly democat. They are vastly outnumbered by the lower and middle class voters so just saying the area is democrat means nothing. Please feel free to provide actual documentation on this subject at any time. People have been asking for it time and time again. Without it your entire argument falls apart.

Ruki says

I never said that the wealthy in the BA overwhelmingly vote Dem, I said the middle class with those huge mortgages overwhelmingly vote Dem

And that is where you are ridiculously incorrect. Period.

That's the best you've got. Deliberately misinterpreting a post? Again--you've obviously lost when you resort to petty tactics like that.

dublin hillz says

Why would they spend a dollar to get 35 cents back? Wouldn't it be easier to finance these other expenditures straight up?

Lets say you are going to buy a new Mercedes for $50k. You can either take out a home equity loan for $50k and use it to buy the car, or you can take out a car loan to buy the car. The home equity loans lets you deduct the interest form your taxes, the car loan does not.

That's why it can make sense to do it that way -- so no, you are not paying $1 to get $0.30 back.

Ruki says

Only you would think that getting caught deliberately lying about something I wrote doesn't destroy your credibility in the process.

And only you would continue to make yourself look more and more foolish with each post by making ridiculous claims that are obviously false.

Again--any time you want to get back to the topic at hand, I'm all ears. (or eyes in this case)

When are you going to show me some of that math you kept talking about?

how long is this gonna take? i'm eager to see house prices fall even further!

People with mortgages should be taxed more for adding risk and instability to the economy and thereby affecting jobs negatively.

Seems a simple place to start would be to eliminate the intrest deduction on HELOC's. and perhaps all second mortages. Doesnt seem like much down side to that. Many here may not remember but there was a time when interest on credit cards and car loans was deductable. Seems like it was eliminated in the early 1980's.

AdamCarollaFan says

how long is this gonna take? i'm eager to see house prices fall even further!

If the GOP goes anywhere with this, the other side will have a field day: "Why are they starving granny?"

Then the GOP will reply by questioning the patriotism of the Dems, and also by calling them baby killers, and something something burned the flag, and what would you do if your wife were raped?

The deduction will survive.

Dan8267 says

People with mortgages should be taxed more for adding risk and instability to the economy and thereby affecting jobs negatively.

Instead, how about making sure people who are a risk don't get loans?

HydroCabron says

If the GOP goes anywhere with this, the other side will have a field day: "Why are they starving granny?"

I'm pretty sure that the stereotypical grandma paid off her house a long time ago.

zzyzzx says

HydroCabron says

If the GOP goes anywhere with this, the other side will have a field day: "Why are they starving granny?"

I'm pretty sure that the stereotypical grandma paid off her house a long time ago.

Have you paid any attention to the arguments in favor keeping Prop 13, or forgiving taxes on principal reductions? There are more grandmas who owe > $1 million on their homes than there are Mexicans in Mexico City! And it's not their fault - it's because their home went up in value so much, or something.

(Sorry, Patrick.net, but I'm going to spell that word as "principal." Call me contrarian.)

rooemoore says

Instead, how about making sure people who are a risk don't get loans?

Hey, look everyone: Karl Marx just posted here!