Get Housing Industry Out Of The Tax Code?

It's long been US policy to try and get people into owning their own homes, and it benefits society in many ways. Here's three:
1. Owners are much more likely to keep up their own property, and police their own neighborhoods, rather than landlords and renters. So quality of life goes up when people own.
2. Owning your own home is the primary investment tool for most middle income Americans.
3. One could argue that much of the basis of our paper currency is backed up by American's investment in real property.

Therefore I think that the tax code encouraging home ownership by allowing a deduction for mortgage interest is good policy.
 
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Right said:
It's long been UIS policy to try and get people into owning their own homes, and it benefits society in many ways. Here's three:
1. Owners are much more likely to keep up their own property, and police their own neighborhoods, rather than landlords and renters. So quality of life goes up when people own.
2. Owning your own home is the primary investment tool for most middle income Americans.
3. One could argue that much of the basis of our paper currency is backed up by American's investment in real property.

Therefore I think that the tax code encouraging home ownership by allowing a deduction for mortgage interest is good policy.
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Do you just copy and paste what your handlers give you?
 
cawacko said:
Sorry, wasn't able to copy and paste. The gist of the argument is we subsidize mortgage interest pushing people into bigger homes and we push for easier credit to increase home ownership and we saw the results of that in 2008.

It's also a philosophical debate over whether the tax code should push debt and consumption vs savings and investment.


https://www.bloomberg.com/view/articles/2017-11-06/get-the-housing-industry-out-of-the-u-s-tax-code
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A home isn't a investment??
 
The problem with the mortgage interest deduction is that there are few limits on it, some buy expensive second and third homes and take just as much advantage of it as the middle class average Joe living in his first home. There needs to be ceilings, and it also should be restricted to primary residences only
 
archives said:
The problem with the mortgage interest deduction is that there are few limits on it, some buy expensive second and third homes and take just as much advantage of it as the middle class average Joe living in his first home. There needs to be ceilings, and it also should be restricted to primary residences only
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You can't take the deduction on a third home, only #1 and #2. I agree that there should be limits, and they should be uniform throughout the country. That means folks in San Francisco, for example, would top out quickly.
 
Right said:
You can't take the deduction on a third home, only #1 and #2. I agree that there should be limits, and they should be uniform throughout the country. That means folks in San Francisco, for example, would top out quickly.
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Should be primary residence only, and limits couldn't be uniformed to be fair, it could be priced according to local real estate values
 
cawacko said:
It's a consumption purchase. Since I'm lazy and watching this kid crawl everywhere I'll post this article describing why

https://www.google.com/amp/s/amp.bu...rton-professor-home-not-an-investment-2016-10
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I think the professor underestimates the equity gained while you own the property, "Let's say you time your local market correctly and home prices rise after you buy. If you decide to sell that home, you'll still need a place to live, and you're buying in that same market with expensive home prices unless you go back to renting." Sounds logical, but he doesn't account for the equity gained, your next house may cost more but your also selling your current home for a higher cost

Article seems to be written from the perspective of one thinking about flipping homes not using them as your residence
 
archives said:
Should be primary residence only, and limits couldn't be uniformed to be fair, it could be priced according to local real estate values
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Why should I, living in flyover country, subsidize housing for the rich folks in San Francisco?


A second home isn't just for the rich. My grandfather was a foreman in a factory and he had one. If you change the 2nd home deduction then you just destroyed the vacation home market.

A second home also a good way for higher income folks, still middle class, to divest their holdings with less risk. For instance my financial advisor recommended that I buy a bigger home to take full advantage of the deduction and to leverage my portfolio. However it is risky to buy in the upper end of the market because those homes take a lot longer to sell. So I bought a second home. I could sell either one if I had a sudden reduction in my income and I'd still have a place to live. Or I could rent one of them.
 
Right said:
Why should I, living in flyover country, subsidize housing for the rich folks in San Francisco?


A second home isn't just for the rich. My grandfather was a foreman in a factory and he had one. If you change the 2nd home deduction then you just destroyed the vacation home market.

A second home also a good way for higher income folks, still middle class, to divest their holdings with less risk. For instance my financial advisor recommended that I buy a bigger home to take full advantage of the deduction and to leverage my portfolio. However it is risky to buy in the upper end of the market because those homes take a lot longer to sell. So I bought a second home. I could sell either one if I had a sudden reduction in my income and I'd still have a place to live. Or I could rent one of them.
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Given that a lot of those coastal States are funding a whole lot of those fly over States it's kinda a mute point

And I'd disagree on the second home, using your own argument, why should I have to pay for someone to have a camp on the local lake, or a winter residence in a warmer State, it's not a necessity but a luxury, and what you are doing with your personal finances could also fall under the same umbrella, not a necessity since your primary residence gives you a place to live
 
archives said:
Given that a lot of those coastal States are funding a whole lot of those fly over States it's kinda a mute point

And I'd disagree on the second home, using your own argument, why should I have to pay for someone to have a camp on the local lake, or a winter residence in a warmer State, it's not a necessity but a luxury, and what you are doing with your personal finances could also fall under the same umbrella, not a necessity since your primary residence gives you a place to live
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You mean "moot point", yet offer no reasoning. Again, why should I subsidize overcrowded enclaves?

You aren't paying for someone's lake house. In fact you can benefit by renting it. Take away a deduction that's been on the books for decades and you've just destroyed that market, along with the communities that rely on that tax base.
 
Right said:
It's long been US policy to try and get people into owning their own homes, and it benefits society in many ways. Here's three:
1. Owners are much more likely to keep up their own property, and police their own neighborhoods, rather than landlords and renters. So quality of life goes up when people own.
2. Owning your own home is the primary investment tool for most middle income Americans.
3. One could argue that much of the basis of our paper currency is backed up by American's investment in real property.

Therefore I think that the tax code encouraging home ownership by allowing a deduction for mortgage interest is good policy.
Click to expand...

Agree with #1

#2 is bogus and not supported by data.

Agree with OP. Government should not be in housing business. That is how you get Fannie Mae and Freddie Mac and financial crisis.

Additionally owning a house has the negative economic effects of keeping people from moving to newer opportunities because of inability to sell.
 
Teflon Don said:
Agree with #1

#2 is bogus and not supported by data.

[3] Agree with OP. Government should not be in housing business. That is how you get Fannie Mae and Freddie Mac and financial crisis.

[4] Additionally owning a house has the negative economic effects of keeping people from moving to newer opportunities because of inability to sell.
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#2 is not bogus, in spite of what those in other investment fields say. It's been a great tool for generations in my family and most folks that I know.
3. Fannie and Freddie should be abolished. Fed should be regulatory only.
4. True to a point. They can always lower the price of their home to sell it, or rent it until it does.
 
cawacko said:
LOL, handlers? No response yourself? One can disagree with his points and I have some but his argument is a legitimate one.
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I have the moron (Right) on ignore, but his argument is valid on all points. Your fluff piece was light on facts, and way too wordy. Nobody buys a home because they'll save a few buck on interest deductions.

And you never address the way education is funded in this nation which is directly tied to home ownership. The problem isn't encouraging people to borrow money. The problem is lending money to people who don't qualify, for properties that aren't worth the valuation.
 
archives said:
The problem with the mortgage interest deduction is that there are few limits on it, some buy expensive second and third homes and take just as much advantage of it as the middle class average Joe living in his first home. There needs to be ceilings, and it also should be restricted to primary residences only
Click to expand...
Sure...they could cap it.
 
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