Comments on: Doubling The Mortgage Deduction to Help the Troubled Economy and Housing Market http://moneyning.com/housing/doubling-the-mortgage-deduction-to-help-the-troubled-economy-and-housing-market/ A personal finance blog where we share insights on carefully saving money, investing, frugal living, coupons, promo codes because the little things matter in achieving financial freedom! Sun, 12 Feb 2012 00:30:58 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Cally http://moneyning.com/housing/doubling-the-mortgage-deduction-to-help-the-troubled-economy-and-housing-market/comment-page-1/#comment-44717 Cally Thu, 02 Jun 2011 19:57:31 +0000 http://moneyning.com/?p=1692#comment-44717 The best thing the government could do for the economy, homes and american familys is to change the individual tax code so that it is based on and encourages consumption and savings not debt. The current system is regressive which has the country's economy stalled due to many mandated needs where the cost has been raised without any competetive alternatives. These are huge rises in gas, energy, education and health care costs, which you have to pay for long before thinking about before owning a home. There is few or no choice alternatives, therefore the supply and demand or free enterprise system has been eliminated considering these must haves. The government steals a big part of your paycheck 1st thing, then you must also pay for the unchallenged high priced necessities. This leaves most consumers in a big stall with no longer having extra money to ignite consumer spending which polarizes the economy. This is why we should fund the government based on consumption tax instead of the out dated payroll tax. People will spend if you allow them to, then the cost of government services or debt would balance itself instead of being out of whack. The accepted method of stealing from people's paychecks to fund the government is the root cause. This 100 year old strategy is no longer effective or feasible to allow the economy to grow. It has been minipulated, filled with loopholes, favoring special interests more for the rich or political sponsers, never helping middle class, which is the bulk of consumers or the bloodline of the American Economy. This is what needs changed to save all the other slices in trouble. The best thing the government could do for the economy, homes and american familys is to change the individual tax code so that it is based on and encourages consumption and savings not debt. The current system is regressive which has the country’s economy stalled due to many mandated needs where the cost has been raised without any competetive alternatives. These are huge rises in gas, energy, education and health care costs, which you have to pay for long before thinking about before owning a home. There is few or no choice alternatives, therefore the supply and demand or free enterprise system has been eliminated considering these must haves. The government steals a big part of your paycheck 1st thing, then you must also pay for the unchallenged high priced necessities. This leaves most consumers in a big stall with no longer having extra money to ignite consumer spending which polarizes the economy. This is why we should fund the government based on consumption tax instead of the out dated payroll tax. People will spend if you allow them to, then the cost of government services or debt would balance itself instead of being out of whack. The accepted method of stealing from people’s paychecks to fund the government is the root cause. This 100 year old strategy is no longer effective or feasible to allow the economy to grow. It has been minipulated, filled with loopholes, favoring special interests more for the rich or political sponsers, never helping middle class, which is the bulk of consumers or the bloodline of the American Economy. This is what needs changed to save all the other slices in trouble.

]]> By: CR Home Mortgage http://moneyning.com/housing/doubling-the-mortgage-deduction-to-help-the-troubled-economy-and-housing-market/comment-page-1/#comment-41627 CR Home Mortgage Sat, 02 Apr 2011 20:07:29 +0000 http://moneyning.com/?p=1692#comment-41627 Now some politicians are seriously trying to eliminate any mortgage deduction. Now some politicians are seriously trying to eliminate any mortgage deduction.

]]> By: Andrea http://moneyning.com/housing/doubling-the-mortgage-deduction-to-help-the-troubled-economy-and-housing-market/comment-page-1/#comment-13700 Andrea Fri, 13 Feb 2009 04:01:54 +0000 http://moneyning.com/?p=1692#comment-13700 Todd - A few thoughts ... 1. If you can't afford to pay your mortgage, doubling the deduction won't make a difference. It also doesn't do renters a lick of good, since property owners aren't likely to pass that savings through. 2. Tightened lending standards are of course a necessity ... but I don't think it's quite that simple. 3. The people in the lowest income tax brackets don't pay income taxes, so cutting the payroll tax in half doesn't do any good. Todd –

A few thoughts …

1. If you can’t afford to pay your mortgage, doubling the deduction won’t make a difference. It also doesn’t do renters a lick of good, since property owners aren’t likely to pass that savings through.

2. Tightened lending standards are of course a necessity … but I don’t think it’s quite that simple.

3. The people in the lowest income tax brackets don’t pay income taxes, so cutting the payroll tax in half doesn’t do any good.

]]> By: todd http://moneyning.com/housing/doubling-the-mortgage-deduction-to-help-the-troubled-economy-and-housing-market/comment-page-1/#comment-13698 todd Fri, 13 Feb 2009 03:40:02 +0000 http://moneyning.com/?p=1692#comment-13698 Here is a three step plan for fixing this mess... 1) Double the home mortgage deduction for three years. This would lead to a decrease in forclosures as homeowners have double the incentive to pay their mortgage. 2) Tighten lending standards to avoid future so-called sub-prime mortgage fiascos. Banks and other lending institutions are already doing this. 3) Cut in half the payroll tax for three years. This lets the lowest income earners keep more of their income which they will use to pay their mortgages. This also allows renters an easier time of paying their rent. Does this cost more than the 700B for TARP I and the 800B for the "stimulus" package? I dont know. Probably not. Besides, it would actually work. Here is a three step plan for fixing this mess…

1) Double the home mortgage deduction for three years. This would lead to a decrease in forclosures as homeowners have double the incentive to pay their mortgage.
2) Tighten lending standards to avoid future so-called sub-prime mortgage fiascos. Banks and other lending institutions are already doing this.
3) Cut in half the payroll tax for three years. This lets the lowest income earners keep more of their income which they will use to pay their mortgages. This also allows renters an easier time of paying their rent.

Does this cost more than the 700B for TARP I and the 800B for the “stimulus” package? I dont know. Probably not. Besides, it would actually work.

]]> By: Ditech Home Loans http://moneyning.com/housing/doubling-the-mortgage-deduction-to-help-the-troubled-economy-and-housing-market/comment-page-1/#comment-12212 Ditech Home Loans Mon, 01 Dec 2008 22:14:14 +0000 http://moneyning.com/?p=1692#comment-12212 Excessive borrowing on a mortgage should not be a problem, because borrowers would still have to qualify at the mortgage note rate, not the effective tax rate. Excessive borrowing on a mortgage should not be a problem, because borrowers would still have to qualify at the mortgage note rate, not the effective tax rate.

]]> By: Danny http://moneyning.com/housing/doubling-the-mortgage-deduction-to-help-the-troubled-economy-and-housing-market/comment-page-1/#comment-12017 Danny Sat, 22 Nov 2008 15:05:28 +0000 http://moneyning.com/?p=1692#comment-12017 You really think our government is going to listen to the people. I have yet to see one thing the government has done yet besides weaken our dollar. Essentially making us all less wealthy. I really do like the idea of getting ideas from the people, I am sure there a lot smarter people in our society than what is in our government. You really think our government is going to listen to the people. I have yet to see one thing the government has done yet besides weaken our dollar. Essentially making us all less wealthy.

I really do like the idea of getting ideas from the people, I am sure there a lot smarter people in our society than what is in our government.

]]> By: Jon Kepler http://moneyning.com/housing/doubling-the-mortgage-deduction-to-help-the-troubled-economy-and-housing-market/comment-page-1/#comment-12003 Jon Kepler Sat, 22 Nov 2008 02:17:36 +0000 http://moneyning.com/?p=1692#comment-12003 Marci, unfortunately, I can't see this tax adjustment ever making it into the commercial sector. Marci, unfortunately, I can’t see this tax adjustment ever making it into the commercial sector.

]]> By: CD Rates Blog http://moneyning.com/housing/doubling-the-mortgage-deduction-to-help-the-troubled-economy-and-housing-market/comment-page-1/#comment-12000 CD Rates Blog Fri, 21 Nov 2008 23:08:59 +0000 http://moneyning.com/?p=1692#comment-12000 Erica, I've got to get the kids so forgive me if this is brief and not well organized. I read two chapters, "The Broken Window" and the following one regarding Destruction" My problem is it seems to portray a zero-some game and we should just live in mud huts. Of course I should read the whole thing, because I'm sure other ideas come into play in other chapters Got to one. But I do want to finish this discussion. cd :O) Erica, I’ve got to get the kids so forgive me if this is brief and not well organized.

I read two chapters, “The Broken Window” and the following one regarding Destruction”

My problem is it seems to portray a zero-some game and we should just live in mud huts. Of course I should read the whole thing, because I’m sure other ideas come into play in other chapters

Got to one. But I do want to finish this discussion. cd :O)

]]> By: marci http://moneyning.com/housing/doubling-the-mortgage-deduction-to-help-the-troubled-economy-and-housing-market/comment-page-1/#comment-11999 marci Fri, 21 Nov 2008 22:20:35 +0000 http://moneyning.com/?p=1692#comment-11999 It seems like one of the biggest problems with the USA economy right now is buying so much on credit ... too much on credit. In order for the economy to become more stable, there should be more people heading towards that debt-free status - ie, nothing on credit, nothing owed. I think the extra tax break would actually DISCOURAGE people from paying off their homes. Not a good idea in my book as it doesn't promote that free of debtness that the economy needs to recover. So, since my home is free and clear, if I go borrow the money as a home equity loan, put the money into savings and withdraw it for the paybacks, will I be able to recoup all the money back with the additional interest deduction? That's the only way it would do me any good :) Could I make money at this? LOL. Re: Renters - theoretically, they should get a break in lower taxes IF the landlord would pass thru the reduction in expenses.... however, that might not happen in all cases :( It seems like one of the biggest problems with the USA economy right now is buying so much on credit … too much on credit.

In order for the economy to become more stable, there should be more people heading towards that debt-free status – ie, nothing on credit, nothing owed.

I think the extra tax break would actually DISCOURAGE people from paying off their homes. Not a good idea in my book as it doesn’t promote that free of debtness that the economy needs to recover.

So, since my home is free and clear, if I go borrow the money as a home equity loan, put the money into savings and withdraw it for the paybacks, will I be able to recoup all the money back with the additional interest deduction? That’s the only way it would do me any good :) Could I make money at this? LOL.

Re: Renters – theoretically, they should get a break in lower taxes IF the landlord would pass thru the reduction in expenses…. however, that might not happen in all cases :(

]]> By: Erica Douglass http://moneyning.com/housing/doubling-the-mortgage-deduction-to-help-the-troubled-economy-and-housing-market/comment-page-1/#comment-11998 Erica Douglass Fri, 21 Nov 2008 21:42:26 +0000 http://moneyning.com/?p=1692#comment-11998 @CD Rates Blog: For an excellent rebuttal of your point, read about the "broken window fallacy" at http://www.hacer.org/pdf/Hazlitt00.pdf or Google for it and find the link on mises.org. (Homeownership doesn't help the economy that way, either. Another common fallacy.) @Kathryn: You wrote "To get more money circulating, we have to have more money circulating." To get more money circulating, we need to let fractional reserve lending work and encourage people to save, not to deficit spend (which is what this would do.) Our government has dropped interest rates to effectively 0, once again encouraging people to spend instead of save. But every dollar that is saved has at least as much positive effect as a dollar spent. That's why this won't help. Encouraging saving, and letting lending work properly instead of force-feeding banks money, is the only thing that will help us. -Erica @CD Rates Blog: For an excellent rebuttal of your point, read about the “broken window fallacy” at http://www.hacer.org/pdf/Hazlitt00.pdf or Google for it and find the link on mises.org. (Homeownership doesn’t help the economy that way, either. Another common fallacy.)

@Kathryn: You wrote “To get more money circulating, we have to have more money circulating.”

To get more money circulating, we need to let fractional reserve lending work and encourage people to save, not to deficit spend (which is what this would do.) Our government has dropped interest rates to effectively 0, once again encouraging people to spend instead of save. But every dollar that is saved has at least as much positive effect as a dollar spent. That’s why this won’t help. Encouraging saving, and letting lending work properly instead of force-feeding banks money, is the only thing that will help us.

-Erica

]]>