How Homeownership Became the Engine of American Inequality
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Re: How Homeownership Became the Engine of American Inequality
#2When I crunched the numbers for the mortgage interest deduction it really didn't seem that compelling. It replaces the standard deduction so the first 12,500$ in mortgage interest does nothing for you.
After that it's just a minor reduction in taxable income and your tax burden is only reduced by a fraction of your mortgage interest. Not enough to cover the costs of maintaining a home and the tendency to consume more housing when owning vs renting.
At the high end sure we are talking real money. Maybe some day it will all be high end housing and then it will more substantial.
Re: How Homeownership Became the Engine of American Inequality
#3When I crunched the numbers for the mortgage interest deduction it really didn't seem that compelling. It replaces the standard deduction so the first 12,500$ in mortgage interest does nothing for you. After that it's just a minor reduction in taxable income and your tax burden is only reduced by a fraction of your mortgage interest. Not enough to cover the costs of maintaining a home and the tendency to consume more…
Sounds like we should increase it to make home ownership more attractive, resulting in greater civic engagement from the population ("skin in the game").
Re: How Homeownership Became the Engine of American Inequality
#4I'd be willing to bet that if we eliminated the home mortgage interest deduction completely it would barely move the needle of what homes people choose to buy or the number of renters vs. owners.
I would love to see the numbers, though.
Re: How Homeownership Became the Engine of American Inequality
#5When I crunched the numbers for the mortgage interest deduction it really didn't seem that compelling. It replaces the standard deduction so the first 12,500$ in mortgage interest does nothing for you. After that it's just a minor reduction in taxable income and your tax burden is only reduced by a fraction of your mortgage interest. Not enough to cover the costs of maintaining a home and the tendency to consume more…
Agreed. This article makes it sound like you can get a mortgage practically for free.
The couple of proposals to get rid of it still leave the MID in place up to $500,000 though which roughly matches what you found.
Re: How Homeownership Became the Engine of American Inequality
#6When I crunched the numbers for the mortgage interest deduction it really didn't seem that compelling. It replaces the standard deduction so the first 12,500$ in mortgage interest does nothing for you. After that it's just a minor reduction in taxable income and your tax burden is only reduced by a fraction of your mortgage interest. Not enough to cover the costs of maintaining a home and the tendency to consume more…
Sounds like we should increase it to make home ownership more attractive, resulting in greater civic engagement from the population ("skin in the game").
We should make it more attractive up to a certain amount and then cut off all subsidies.
Re: How Homeownership Became the Engine of American Inequality
#7I don't know of anyone who bases a home purchase decision on the mortgage interest deduction. Seriously location, school district, cost of home, time to commute, yard size, cost of HOA are all more important to everyone I know. In fact it has never come up in conversations about home purchases with my peer group.
Re: How Homeownership Became the Engine of American Inequality
#8When I crunched the numbers for the mortgage interest deduction it really didn't seem that compelling. It replaces the standard deduction so the first 12,500$ in mortgage interest does nothing for you. After that it's just a minor reduction in taxable income and your tax burden is only reduced by a fraction of your mortgage interest. Not enough to cover the costs of maintaining a home and the tendency to consume more…
For people in high tax states though it's pure gravy. California tax by itself blows away the standard deduction by a wide margin. With the Trump proposal if they remove the ability to deduct local tax though it becomes a lot less compelling though.
Re: How Homeownership Became the Engine of American Inequality
#9I'd be willing to bet that if we eliminated the home mortgage interest deduction completely it would barely move the needle of what homes people choose to buy or the number of renters vs. owners. I would love to see the numbers, though.
Yep, bigger issues are the lack of low cost housing units to buy and older institutionalized discrimination. Not the MID.
Re: How Homeownership Became the Engine of American Inequality
#10I'd be willing to bet that if we eliminated the home mortgage interest deduction completely it would barely move the needle of what homes people choose to buy or the number of renters vs. owners. I would love to see the numbers, though.
Until I can afford a down payment [in a location I like] you can put up as many carrots as you want, I still can't cough up the dough to even think about them.