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APOCALYPSEFUCK_is_ADORABLE says
a 3/2 in Camden should not be valued at 133 times
American overpaying buyers are willing to pay twice that for a 1bdrm-3/4bath fixer upper slum shack.
Look what assholes are paying in good shack neighborhoods,more than 10% of listing price.
It is defensible. It's why it exists.
Now good/bad that's debatable
I don't want to pay taxes to subsidize Obamacare transgender retarded surgeries or viagra.
If the goal is to tax the poor at a higher rate than the rich, mission accomplished.
But it can probably never be un-done, because it would create big savings for buyers by lowering house prices across the board.
And the last thing any current owner wants is big savings for the buyer of his house.
It's a big help for home buyers in California, who would not be able to afford a home. More so if you are a first time buyer.
Californians need all the help they can get trying to survive in a crazy state with high prices of everything, and the highest tax in the nation.
If shit had a price, it would be most expensive in California.
Patrick, I say it can be undone. Phase it out over 15 years. Most people paying off a 30 year now would likely be done paying most of the interest at that point. And that's a long enough time period to avoid any shocks to the market.
It's a big help for home buyers in California, who would not be able to afford a home.
I disagree. You pay exactly the same whether interest is deductible or not. Most buyers pay the max they can afford.
The mortgage interest deduction simply allowed buyers to pay a higher price -- using the exact same monthly payment as before! So the benefit was utterly negated.
Was very good for banks though, by increasing mortgage amounts. And the banks write our laws, so that's another impediment to undoing it.
It's a big help for home buyers in California, who would not be able to afford a home.
I disagree. You pay exactly the same whether interest is deductible or not. Most buyers pay the max they can afford.
The mortgage interest deduction simply allowed buyers to pay a higher price -- using the exact same monthly payment as before! So the benefit was utterly negated.
Yes, but it does allow someone to buy something better, and in many cases to buy a home they may not have in the first place. The extra tax refund at the end of the year, could go a long way to help a young couple to make ends meet.
How does a young first time buyer in California, pay all those taxes, pay the high cost of rent, gas, utilities and every other expense, and still buy a super high priced little condo that is now the norm in California?
Patrick, you may be able to afford it, even though you believe it's not worth it, but what about the rest of the population who just want a little castle of their own? California is really fucked up when it comes to the cost of living. We have to help the young families build their own nest.
indefensible? yeah right, it's not like buying a home is a HUGE driver of the economy or anything like that. helps with growing the population as well.
all around, the more incentives to buy a house and start a family the better.
edit: you know what's not defensible? giving taxpayer money to illegal immigrants.
Was very good for banks though, by increasing mortgage amounts. And the banks write our laws, so that's another impediment to undoing it.
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Incentivizing taking on more debt, so that the interest paid can be used as a write off against income taxes. What could go wrong?
"We should buy a house! "
Yes, but it does allow someone to buy something better, and in many cases to buy a home they may not have in the first place. The extra tax refund at the end of the year, could go a long way to help a young couple to make ends meet.
Sp the rest of the country should subsidize california's local zoning laws that drive the cost of housing through the roof? Why should people in Iowa pay for the refusal of SF to increase housing density?
The government really likes home ownership (and home price appreciation) and wants to encourage more of it. So we have a mortgage interest deduction. That’s spending through the tax code - a policy provision specifically and expressly passed for the purpose of subsidizing the purchase of a home. Thus the promotion of home ownership.
To fully grasp the concept, just imagine a scenario for a moment in which instead of getting a tax deduction for the mortgage interest, the government just sent you a check. They’d keep your tax rate unchanged - no deduction - but they’d instead send you a check once a year for whatever the interest deduction would’ve been worth. Would you care? Probably not.
What’s the difference to your bank account? There is none. What’s the difference to the government’s books? Not one red cent. It’s a wash for both parties. The cost of the subsidy is the same and the benefit to you is the same.
But while there is no difference whatsoever for the government’s finances - same deficit and same debt - the political difference is MASSIVE!
Why? Perception.
The public, by and large, hates hearing about massive new spending programs. But a massive new tax cut, on the other hand…. Well… that’s a different story altogether!
So which program do you think a politician would choose to run on if given the choice? Sending millions of lucky homeowners a nice big check every year in perpetuity? Or running on a platform that calls for cutting taxes for millions of hardworking Americans? Same policy. Same cost. Different optics…
We can all probably agree that homeownership is a good and wholesome thing, but wouldn’t it seem a little weird to pitch legislation where the government is going to start sending checks out to perfectly affluent and able-bodied people just to help them pay their mortgages? And how do you reckon all those poor bastards who rent are going to feel about it?
Here’s a novel idea. Just pop it in the tax code instead. Boom. Job done.
https://www.bloomberg.com/view/articles/2017-07-27/mortgage-interest-deduction-gets-harder-to-defend