"Kenny H" <[EMAIL PROTECTED]> wrote:
>
> *also trying to rewrite the tax code and screw people out of their
> mortgage deduction

And who is getting screwed out of thier mortgage deduction? Under the
proposal, the average home owner will maintian their full
deductiblity. And those who are unable to deduct it now, because they
 dont save enough by itemizing will be able to deduct it. 

Who will lose part of their deduction? The upper third or so on the
wealth scale. You seem overly concerned for these poor souls. First,
they will retain dudutability up to about the average price home
regionally. Thus in California, those with a million dollar home,
would, under the proposal, be only be able deduct the mortgage
interest equivalent to about a $400-500,000 home. And yet, in balance,
a lot of these taax payers are not currently able to deduct for such,
because at their incomes the Alternative Minimum Tax (AMT) kicks in.
But under  the proposal, AMT will be killed, thus the upper third or
tax payers trade part of their mortgage deduction for elimination of
the onerous AMT. 

So don't cry too hard for these upper 1/3 of taxpayers who will be
affected. (Which seems odd for you -- to cry for such (mostly
Republicans), but I guess its just compassion bubbling out for all of
God's creatures.) Their taxes  will be pretty much uneffected as the
AMT "gains" will balance out the partial mortgage deducability loss. 

And the lower 2/3s of tax payers will be generally uneffected -- or
will actually gain -- by being able to deduct mortgage interest when
they can't now. 

And the overall effect will be to make housing more affordable. A good
thing, yes?

What is interesting is your implication that mortgage interest
deductions is an entitlement. It is a poor policy economically, having
been a huge bonanza of a tax shelter for the rich and has contributed
to current housing being out of reach for 85% of potential buyers.

An effect will be that less money will be sunk into fancy show-off
houses and more into capital investments which will raise productivity
and wage rates for all. A good thing, yes?









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