quote:

ORIGINAL: OrionTheWolf
This is a deduction that helped stimulate the housing industry. It was the lack of regulation over these loans, and the accountability of the financial institutions. I believe there should be a cap on it, based upon the value of the home though.

quote:

ORIGINAL: tj444

quote:

ORIGINAL: OrionTheWolf
Just remove the loop holes and tax shelters for things that do not directly stimulate our nation's economy. It has been done before.

you mean like the mortgage interest tax deduction for personal residences? Imo, that was one of the contributing factors to the whole housing debacle.. And its unfair to renters (which tend to be lower income) and those who pay cash/have clear title.

quote:

ORIGINAL: BanthaSamantha

quote:

ORIGINAL: tj444

you mean like the mortgage interest tax deduction for personal residences? Imo, that was one of the contributing factors to the whole housing debacle.. And its unfair to renters (which tend to be lower income) and those who pay cash/have clear title.

Tax law is a complicated subject.

It is unlikely that the mortgage interest tax deduction was a major influence on the housing crisis. Remember that the MITD is a below-the-line deduction, meaning one will only qualify it once their itemized deductions begin to outweigh their standard deduction. Likewise, in order for it to have a truly influencing effect, the deduction must substantially surpass the standard deduction. As a person makes more money, they're likely to have more itemized deductions. But, as a person makes more money, there are less likely to default on a mortgage. Their mortgage might be underwater, but they have the resources to continue paying it down.

Such means that this deduction is only really encouraging a narrow band of people to buy a home when they ordinarily wouldn't: people whom make enough money to get a substantial deduction but don't make enough to protect themselves from default.

quote:

ORIGINAL: tj444

yes tax law is complicated.. but many realtors use the deduction as an additional reason to buy and because it is complicated, the average person might not sit down and work out how it actually would affect their taxes.. They just tend to make certain assumptions and away they go..

I know there has been talk about strategic defaults, how many are actually doing that i dont know.. but those that are have the money/resources to continue paying their mortgage, they however chose not to..

quote:

ORIGINAL: tj444

No, imo, it helped to OVER-stimulate the housing industry. That is the problem with it, it encouraged people to buy bigger than they could really afford or buy when they really shouldnt have,.. (btw, Canada does not give this type of tax deduction and the housing industry does just fine. So.. if it works there..)..

..that and its not equally fair to everyone.

Imo, to complain about the tax shelters that benefit certain people (the rich), this mortgage interest rate deduction is the same thing, it benefits certain people.. do people not see the hypocrisy here? That was really my point..

quote:

ORIGINAL: OrionTheWolf
This is a deduction that helped stimulate the housing industry. It was the lack of regulation over these loans, and the accountability of the financial institutions. I believe there should be a cap on it, based upon the value of the home though.

quote:

ORIGINAL: tj444

quote:

ORIGINAL: OrionTheWolf
Just remove the loop holes and tax shelters for things that do not directly stimulate our nation's economy. It has been done before.

you mean like the mortgage interest tax deduction for personal residences? Imo, that was one of the contributing factors to the whole housing debacle.. And its unfair to renters (which tend to be lower income) and those who pay cash/have clear title.

quote:

ORIGINAL: willbeurdaddy

Homeowners spend more on their property than landlords and renters do combined so it also stimulates the economy.

quote:

ORIGINAL: willbeurdaddy
Its not unfair to renters. The mortgage tax deduction levels the playing field between renting and owning. Landlords get a tax deduction for interest on property they buy to rent out and pass that on to renters through their lower carrying costs. Homeowners spend more on their property than landlords and renters do combined so it also stimulates the economy.

quote:

ORIGINAL: BanthaSamantha
These are fair suppositions, but they don't actually support the conclusion that the MID materially affects home ownership rates. They only support the notion that it is reasonable to believe it could encourage home ownership.

While it makes sense that the MIT might provide a justification for increased homeownership, actual data and studies have reached the opposite conclusion: the mortgate interest deduction simply isn't all that effective at ecouraging people to buy houses.

The ancient Greeks believed that the heaver an object is, the faster it falls. Such a notion certainly sounded correct; it made sense to them. On the other hand, if the Greeks bothered to perform experiments and conduct a study, they'd find out that their reasonable conclusion simply didn't bear out in the data.

quote:

ORIGINAL: willbeurdaddy
Its not unfair to renters. The mortgage tax deduction levels the playing field between renting and owning. Landlords get a tax deduction for interest on property they buy to rent out and pass that on to renters through their lower carrying costs. Homeowners spend more on their property than landlords and renters do combined so it also stimulates the economy.

quote:

ORIGINAL: tj444

As i said in another post above, it encouraged people to buy bigger than they could really afford or buy when they really shouldnt have,.. I also believe that it discourages owners from paying their mortgages off faster and encouraged the whole ATM thing, and constantly trading up to more and more debt,.. a house wasnt someplace to live in any longer, it was a cash cow... So in those ways imo it contributed to the housing debacle, not necessarily increasing ownership rates, but in part, encouraging way too much debt..

quote:

ORIGINAL: BanthaSamantha
As I said before: while those are perfectly reasonable suppositions, they are not borne out by facts. Certainly there are instances where those examples are true, but the overall trend is different. On a macro level, the MID simply doesn't have that much of an impact.

To clarify your issue with the distinction between encouraging homeownership and encouraging debt, the data and studies have concluded that the mortgage interest deduction simply doesn't have that much effect on the behavior of people in the housing market. Whether or not this deduction existed, the housing market would still have went sour.

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ORIGINAL: tj444

Suggest to people that they double their mortgage payments to pay it off faster and they will look at you like you are crazy!

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ORIGINAL: BanthaSamantha

quote:

ORIGINAL: tj444

Suggest to people that they double their mortgage payments to pay it off faster and they will look at you like you are crazy!

Ha yeah, that is the general reaction whenever you ask someone to solve a math problem. That said, doing that does save many times more money than the MID would. You don't even need to double the payment, all you really need to do is double the principal portion of the payment. When you factor in interest, insurance, and taxes, the principal portion of a payment is often pretty small.

quote:

ORIGINAL: BanthaSamantha

quote:

ORIGINAL: willbeurdaddy

Can you back this up?

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ORIGINAL: BanthaSamantha

quote:

ORIGINAL: willbeurdaddy

Homeowners spend more on their property than landlords and renters do combined so it also stimulates the economy.

I am not sure that this statement is actually true. Can you back this up?

• living space per individual is larger in owner occupied dwellings, requiring more maintenance and more furnishings
  
• there is more outside property to maintain per individual, with no common areas for single family homes
  
• there is less sharing of durable goods such as washers, dryers, lawnmowers, snowblowers etc
  
• homes are in less densely populated areas with less access to viable public transportation than rentals, requiring increased spending on transportation
  
• the ability to tap home equity (with historically more appreciation than most individual's non-real estate investments) enables increased spending
  

quote:

ORIGINAL: willbeurdaddy


There are several reasons for it:

• living space per individual is larger in owner occupied dwellings, requiring more maintenance and more furnishings
  
• there is more outside property to maintain per individual, with no common areas for single family homes
  
• there is less sharing of durable goods such as washers, dryers, lawnmowers, snowblowers etc
  
• homes are in less densely populated areas with less access to viable public transportation than rentals, requiring increased spending on transportation
  
• the ability to tap home equity (with historically more appreciation than most individual's non-real estate investments) enables increased spending
  

Home ownership spending is by far the largest component of GDP.

quote:

the ability to tap home equity (with historically more appreciation than most individual's non-real estate investments) enables increased spending

quote:

ORIGINAL: tazzygirl

quote:

Perhaps if you were to learn how to do arithmetic you would not need a prybar to get your feet out of your mouth
698,105,000,000/336,000,000=1/2077 which is a tiny fraction of 1%

And the country is a tiny fraction of the US... the population is a tiny fraction of the US...

You were the one who chose estonia for your example.
I pointed out that your example did not prove your point but the exact opposite.

Your point is pointless on this.

That would be your opinon but the numbers you posted say otherwise.

United States 312,582,000 population... United States 698,105,000,000 military

2,233.40 per person spent on military

Estonia 1,340,194......... Estonia 336,000,000

251.00 per person spent on military

Your argument is more in keeping that we spend far too much on military...


My argument was that if a country has a 18/19% tax on all income both corporate and private it will not be difficult to ballance the budget if you are not spending 2000+ times as much money on the miltary.
Now if estonia does ok on 18/19% with a tiny military budget how can the u.s. get by with 18/19% with the 2000+ times amount we spend on the military?