jimmurphy said:

drummerboy said:

between owning housing as a business and owning housing as a roof over your head.

How can you compare the two?

jimmurphy said:

There are financial benefits to owning over renting. If there were not, why would a landlord own a building in the first place? 

He is making money.

Same as leasing a car rather than buying. 

You get flexibility and other benefits by renting, but it is not financially smart for most. 

Of course there are exceptions, and of course the calculation changes if you eliminate the deduction. 

Nope. I'm comparing it from the point-of-view of the home dweller only. He/she can either put the delta in his/her own pocket or into the landlord's.

It is an investment. Others have rightfully pointed out that the money could be invested elsewhere, but how many really have the sophistication and discipline to calculate what the delta is and then to wisely invest it?

It surprises me a bit that the value and benefit of lower turnover and greater stability associated with home ownership in our community is not valued more.

Because all the evidence shows that there is no such "advantage" 

"Evidence" in this matter is subjective and generally anecdotal. 

Show me a study that indicates similarly levels of stability (i.e. Lack of mobility) of homeowners versus renters in non-crisis times and you'll move me.  If your point is that there is no value in that stability, then we'll have to agree to disagree and move on.

Renters can move easier which is great in times of recession. But there is zero evidence to suggest that in normal times rental communities are less stable than those where most homes are owned. 

As I said the supposed benefits of home ownership is like a religious myth. 

There is certainly some value in stability, although I question the assumption that renters are automatically less stable citizens, but is it worth the cost in lost revenue (ignoring the possible discrimination issue)? 

MY husband and I are at the low end of the middle class as retirees. Without the mortgage interest deduction, we would be in foreclosure.

Gilgul said:

Renters can move easier which is great in times of recession. But there is zero evidence to suggest that in normal times rental communities are less stable than those where most homes are owned. 




As I said the supposed benefits of home ownership is like a religious myth. 

Where's the evidence that they are just as stable?

sac said:

There is certainly some value in stability, although I question the assumption that renters are automatically less stable citizens, but is it worth the cost in lost revenue (ignoring the possible discrimination issue)? 

Never said they were less stable citizens.

As db mentioned earlier most of continental Europe has a low rate of home ownership but stable neighborhoods. 

jimmurphy said:

Gilgul said:

Renters can move easier which is great in times of recession. But there is zero evidence to suggest that in normal times rental communities are less stable than those where most homes are owned. 




As I said the supposed benefits of home ownership is like a religious myth. 

Where's the evidence that they are just as stable?

If you calculated how much your itemized deduction exceeds the standard deduction. Unless there are some special circumstances I can not see how it can be a large number. 

fairplay said:

MY husband and I are at the low end of the middle class as retirees. Without the mortgage interest deduction, we would be in foreclosure.

Gilgul said:

If you calculated how much your itemized deduction exceeds the standard deduction. Unless there are some special circumstances I can not see how it can be a large number. 

fairplay said:

MY husband and I are at the low end of the middle class as retirees. Without the mortgage interest deduction, we would be in foreclosure.

The value of the mortgage interest deduction to an individual homeowner declines over time, at least with a fixed rate mortgage.  And, as Gilgul notes, it is only the difference between the standard and itemized deduction amount that is your actual financial benefit.  I would think that middle class retirees would not be the primary beneficiaries in most cases.

(I can't believe that I'm agreeing with Gilgul about something ...

     "the world turned upside down ..." )

I would get rid of all current deductions but raise the standard deduction (keeping the high income phase out) while making FICA payments aincome tax credit and refundable (with high income phaseout on the credit. 

Gilgul said:

As db mentioned earlier most of continental Europe has a low rate of home ownership but stable neighborhoods. 

jimmurphy said:

Gilgul said:

Renters can move easier which is great in times of recession. But there is zero evidence to suggest that in normal times rental communities are less stable than those where most homes are owned. 




As I said the supposed benefits of home ownership is like a religious myth. 

Where's the evidence that they are just as stable?

We are a very different society than Europe. If you are going to change our entire tax structure and increase the safety net, get back to me.

jimmurphy said:

Gilgul said:

As db mentioned earlier most of continental Europe has a low rate of home ownership but stable neighborhoods. 

jimmurphy said:

Gilgul said:

Renters can move easier which is great in times of recession. But there is zero evidence to suggest that in normal times rental communities are less stable than those where most homes are owned. 




As I said the supposed benefits of home ownership is like a religious myth. 

Where's the evidence that they are just as stable?

We are a very different society than Europe. If you are going to change our entire tax structure and increase the safety net, get back to me.

Of course it is true that our society is different, but where is the proof/evidence of damage to society that would result if we had more renters due to loss of mortgage interest deduction? (hint - Europe is evidence that societies with more renters can be stable, so we need some contrary evidence.) Also, keeping renters out or in a small minority is one more example of discrimination.

Again, nobody said anything about keeping renters out.

Europe has a much greater social safety net. Europe is made of of many small countries which are much less diverse, socially and economically. Those small countries coupled with distinct national identities encourage families and communities to remain closer to each other.

Contrast that with the US where it is every man or woman for himself, much greater income stratification, a huge country, far-flung families.

In my opinion, encouraging community stability is a good thing. Are there better ways to do that than a mortgage interest deduction? Of course there are.

But talk of its elimination, in isolation, seems short-sighted. 

Phasing it out over time as part of greater tax reform? Sure.

I'm out now.

jimmurphy said:

Again, nobody said anything about keeping renters out.
U
Europe has a much greater social safety net. Europe is made of of many small countries which are much less diverse, socially and economically. Those small countries coupled with distinct national identities encourage families and communities to remain closer to each other.

Contrast that with the US where it is every man or woman for himself, much greater income stratification, a huge country, far-flung families.

In my opinion, encouraging community stability is a good thing. Are there better ways to do that than a mortgage interest deduction? Of course there are.

But talk of its elimination, in isolation, seems short-sighted. 

Phasing it out over time as part of greater tax reform? Sure.

I'm out now.

I think we are in 'violent agreement' then.  I certainly would not advocate eliminating that deduction immediately, which you will see if you go back and read my early posts in this thread.

Re social safety net and isolation/income stratification (in paragraphs 2 and 3 above), I would much prefer to emulate Europe on those characteristics, but I don't think they really have much to do with the mortgage interest deduction one way or the other.

Gilgul said:

If you calculated how much your itemized deduction exceeds the standard deduction. Unless there are some special circumstances I can not see how it can be a large number. 

fairplay said:

MY husband and I are at the low end of the middle class as retirees. Without the mortgage interest deduction, we would be in foreclosure.

There is often a special circumstance, such as a job search, a move to.take on a work assignment (only partially retired), property taxes, other costs. Anyway, please don't take it away!

https://www.bloomberg.com/view...

>span class="lede-text-only__highlight">Let's be honest: If these tax breaks never existed, things would probably be a lot better for everyone.

Gilgul said:

https://www.bloomberg.com/view...

Let's be honest: If these tax breaks never existed, things would probably be a lot better for everyone.

I agree. Also, I heard a story about a study that found that tax deductibility has no effect on charitable contributions.

fairplay said:

Gilgul said:

If you calculated how much your itemized deduction exceeds the standard deduction. Unless there are some special circumstances I can not see how it can be a large number. 

fairplay said:

MY husband and I are at the low end of the middle class as retirees. Without the mortgage interest deduction, we would be in foreclosure.

There is often a special circumstance, such as a job search, a move to.take on a work assignment (only partially retired), property taxes, other costs. Anyway, please don't take it away!

There definitely should be some sort of phase-out or grandfathering if they decide to eliminate the deduction, because many people (like you) have made their home investment and arranged their other financial affairs assuming that the deduction will be there.  But that doesn't mean that the deduction is a good thing going forward.  

But ... how long have you been paying on that house?  The closer you get to the end of the term, the less interest and more principal you are paying and the principal part isn't deductible.  I would think that most retirees would be getting toward the end of the life of their mortgage anyway (?)

It's not about the amount of interest you're paying, it's about the amount the next guy will be able to afford when you sell. 

sac said:

fairplay said:

Gilgul said:

If you calculated how much your itemized deduction exceeds the standard deduction. Unless there are some special circumstances I can not see how it can be a large number. 

fairplay said:

MY husband and I are at the low end of the middle class as retirees. Without the mortgage interest deduction, we would be in foreclosure.

There is often a special circumstance, such as a job search, a move to.take on a work assignment (only partially retired), property taxes, other costs. Anyway, please don't take it away!

There definitely should be some sort of phase-out or grandfathering if they decide to eliminate the deduction, because many people (like you) have made their home investment and arranged their other financial affairs assuming that the deduction will be there.  But that doesn't mean that the deduction is a good thing going forward.  

But ... how long have you been paying on that house?  The closer you get to the end of the term, the less interest and more principal you are paying and the principal part isn't deductible.  I would think that most retirees would be getting toward the end of the life of their mortgage anyway (?)

Even as the amount decreases, it's still significant. Look.elsewhere please to avoid raising taxes on the rich! To the OP, this is a middle class deduction! Progressives are trying to support the middle class.

fairplay said:


Even as the amount decreases, it's still significant. Look.elsewhere please to avoid raising taxes on the rich! To the OP, this is a middle class deduction! Progressives are trying to support the middle class.

The last couple of years on mine, the interest deduction amount wasn't very significant.  The property taxes on the other hand ...

it's all relative. I hope they keep it. I find it very helpful, but my finances are only scarcely out of the double digit range now that I'm fixed incomr.

I would bet that if the mortgage interest and income tax deductions are eliminated along with all other deductions but the standard deduction is tripled (with phase outs) that pretty much everyone with a low or middle income would be better off.

Gilgul said:

I would bet that if the mortgage interest and income tax deductions are eliminated along with all other deductions but the standard deduction is tripled (with phase outs) that pretty much everyone with a low or middle income would be better off.

I wouldn't stand on one leg...