I may not be an economics major here..but if you remove the taxation benefit how or why would anyone buy. Remember this isn’t the days of yester year…very few of us have $417,000 (Conforming limits) to plump down on a piece of property to buy a home for the glory of deducting the property taxes paid in and the glory of maintaining it. Financing Homes Stimulates the Economy and like it or not (all of us) must agree that Real Estate in America effects every aspect of the economy…cut the head off – the only significant perk tax benefit to it…why would we invest in this country? Why?

When did it become a crime to be successful and America? It seems to me that there are more than a few things mixed up with this. You want to take the deduction away….albeit …do it and how to do you stimulate those that are strapped into making the leap from renter to owner? What is their motivation?

The mortgage deduction doesn’t promote home ownership. If we wanted to promote homeownership, instead give everyone that owns their home a significant but fixed deduction.

The mortgage deduction promotes borrowing to finance home purchases. The only way to use the deduction is to have a mortgage! You get nothing if you own your house with no debt attached. Furthermore, it benefits the people who borrow a significant enough amount to see a significant benefit from itemized deductions.

It also helps people who borrow to purchase a house for investment purposes or for recreational purposes. We’re talking about landlords or people wealthy enough to have summer homes.

The HIMD is awful in terms of promoting home ownership. The only problem is how do we get rid of it without hurting millions of people who have made economic plans around the HIMD. Removing the HIMD will profoundly reduce the price of the more expensive houses and severely hurt those in the upper middle class. I’m not sure what will happen to the prices of the cheaper housing since removing the HIMD will likely increase demand for housing that cost less.

and for your most recent comment.
There is one reason why the state loves buying and selling of real estate. That is all the fees and taxes it can collect during the transaction process. This is the reason the state will promote all kinds of home buying and perpetuate the myth that buying and selling houses is good practice. Those fees fills the coffers of the government and allows them to enact their policies that have specious value.

Another thing that has always bothered me..Why is it that the Property Taxes, Recording Costs, State and County Transfer and Documentary Costs are not required to be compiled in a form of the Truth In Lending for Mortgages? Wouldn’tit benefit a consumer to see the compilation of fees/assessments that the government is receiving as a part of a real estate transaction in the same manner that Lenders/Brokers/Bankers are required to disclose their income? After all the Banker/Lenders/Brokers are suppose to have the risk in Lending…Interesting Food for Thought..How scary it would be to actually see the percentage our Income and closing costs are actually going into the government….How dare we actually get a deduction for all that paid in.

Shame on us.

Maybe you didn’t notice that I said that the personal exemption should be tax neutral? Just because you may have foolishly taken on a huge mortgage, just because of the government subsidy shouldn’t make you a smart guy.

They say you can farm the land or you can farm the government.

One unintended consequence of HMID is that house prices go up. Well that is great for sellers but terrible for buyers. The HMID helps to hide the true cost of home ownership and transfers the higher costs to bank profits. I think that is immoral and should be stopped.

Yes, our current tax setup is antiquated and convuluted. Yes, Washington uses the tax law to their own advantage. However, those two truths do not trump another truth, an economic truth. which is whatever you tax, you discourage; whatever you reward (give a tax break) you encourage. Washinton at least knows enough to know that it cannot house an entire country. just like Washington cannot employ an entire country. The HMID is the governments instrument to encourage home ownership. the same situation applies to corporations. corporations get tax breaks that employees or sole-proprietors do not. period. is it fair? from some angles, yes, very much so. the government has to give corps tax breaks to encourage corporations. its the corporations that employ a huge percentage of our workforce.

for anyone that does not agree with me, that’s fine. that is your right. but please go study the S&L crisis and the following real estate slump in our country during the 1980’s before you tell me how wrong I am. if you would study what caused the real estate slump and the S&L crisis during the 80’s, you would understand this topic much better.

What should happen is this: Increase the personal exemption to a neutral amount, eliminate the standard deduction, and junk the rest. Simple and a done deal. No more tax returns, no capital gains tax, and no loopholes. The lower income folks would be ok, and the rich would pay their fair share based on one tax bracket. And the rich can have their capital gains, which would spur investment.

Taxes NEVER go down. NEVER! This will mean a tax increase. I don’t want a tax increase. I pay too many taxes as is. The middle class in America is being squeezed to death. I’m tired of seeing supper rich pay less in taxes then I do. I’m tired of driving to work and seeing poor people sitting on their ghetto steps, dealing drugs, not working while I know my taxes pay to subsidize their kids daycare and their food stamps. I’m tired of paying excessive property taxes to fund curruption.