The American Dream And The Level Playing Field

[subllibrm]

Many say that they want a level playing field but if you scratch down a little you will find that just about everyone has some "special interest" that they feel is worthy of government protection or subsidy.

The Forbes Flat Tax was the closest that I can think of to actually making everything level. One tax rate. A large individual exemption and then XX% per dollar of income after that. No deductions for anyone on anything for any reason, corporations included. You make money, the government gets a set share.

Period.

Done.

Dump the employer withholding process. Make everyone write a quarterly check for their own taxes.

Buh bye H&R Block and all the other IRS leeches and lackeys.

And if that rate doesn't raise enough money to fund the government they either cut spending or vote to raise the tax rate. And then they can listen to the people's "voice" when the new quarterly checks are due.

Now that is representative government.

Snowball, meet hell.

 

[The Rogue Tomato]

A consumption tax would be more fair even than a flat tax.  Plus it gives you the ability to vote with your dollars.  You can't vote with your dollars with a flat tax. 

 

[praise_yeshua]

The tier syste,m is fine. Just remove the complexity of it and be done with it.

I'm pretty sure that Employer witholding for federal taxes is voluntary. Some states require it for certain situations. I have nothing against employer withholds.

If you remove the interest deduction on owing your own house, very few will choose to own their own home. I'm all for limiting it, but not removing it. There are good reasons for some deductions and some special taxes. Too many people over simplify the issue.

 

[The Rogue Tomato]

They should have a flat rate income tax.

After all. I don't get a discount on sales tax - based on my income.

Yes, you do.  You buy less than a rich person.  That's your discount. 

 

[rsc2a]

If you remove the interest deduction on owing your own house, very few will choose to own their own home.

What in the world makes you think that?

 

[praise_yeshua]

If you remove the interest deduction on owing your own house, very few will choose to own their own home.

What in the world makes you think that?

This is the single greatest tax deduction in the current tax system. It accounts for more loss of revenue than any single deduction in the system. The large interest payment made at the start of any mortgage loan is the single greatest road block to a person owning a home. The fact you can deduct the interest dollar for dollar from your gross income..... is the very reason no one has ever tried to remove it. Yes. They talk about it from time to time but no one wants it gone.

I knew you weren't very "informed" on "many" things.... but the very fact you don't know this..... tells everyone you're not who you make yourself out to be.

 

[rsc2a]

You realize that only about 25% of households claim a mortgage interest deduction and they are overwhelmingly high income households, right?

Not only that, but the annual benefit is less than $800 for the overwhelming majority that do claim it.

Or are you just making things up again?

 

[praise_yeshua]

You realize that only about 25% of households claim a mortgage interest deduction and they are overwhelmingly high income households, right?

Or are you just making things up again?

Nope. You're wrong. Prove it.

The stats from the IRS prove you wrong. It is true that the average savings have went down over the last several years because of interest rates reductions and refies. However,

It will NOT stay that way forever. Low interest rates will be a thing of the past. Rates will go up and the tax savings will increase dramatically with new mortgages at higher rates. When mortgage rates were high. You could save thousands on your taxes.

If you want the housing market to crash AGAIN... just take away the deduction. There was a reason it was put in place to start with. People just forget WHY.

Why don't you go away little boy. You have no idea what you're talking about. Keep reading all those liberal/conservative articles that don't tell you the entire story. Both sides are playing the numbers.

 

[rsc2a]

You realize that only about 25% of households claim a mortgage interest deduction and they are overwhelmingly high income households, right?

Or are you just making things up again?

Nope. You're wrong. Prove it.

The stats from the IRS prove you wrong. It is true that the average savings have went down over the last several years because of interest rates reductions and refies. However,

It will NOT stay that way forever. Low interest rates will be a thing of the past. Rates will go up and the tax savings will increase dramatically with new mortgages at higher rates. When mortgage rates were high. You could save thousands on your taxes.

If you want the housing market to crash AGAIN... just take away the deduction. There was a reason it was put in place to start with. People just forget WHY.

Why don't you go away little boy. You have no idea what you're talking about. Keep reading all those liberal/conservative articles that don't tell you the entire story. Both sides are playing the numbers.

www.reason.org/files/mortgage_interest_deduction.pdf

"As a result, only one-fourth of taxpayers in 2009 claimed the mortgage interest deduction."

"In summary, the mortgage interest deduction is almost exclusively claimed by households in the top income brackets and younger individuals with large mortgages..."


It's like you advertise your ignorance about certain topics.

 

[praise_yeshua]

You realize that only about 25% of households claim a mortgage interest deduction and they are overwhelmingly high income households, right?

Or are you just making things up again?

Nope. You're wrong. Prove it.

The stats from the IRS prove you wrong. It is true that the average savings have went down over the last several years because of interest rates reductions and refies. However,

It will NOT stay that way forever. Low interest rates will be a thing of the past. Rates will go up and the tax savings will increase dramatically with new mortgages at higher rates. When mortgage rates were high. You could save thousands on your taxes.

If you want the housing market to crash AGAIN... just take away the deduction. There was a reason it was put in place to start with. People just forget WHY.

Why don't you go away little boy. You have no idea what you're talking about. Keep reading all those liberal/conservative articles that don't tell you the entire story. Both sides are playing the numbers.

www.reason.org/files/mortgage_interest_deduction.pdf

"As a result, only one-fourth of taxpayers in 2009 claimed the mortgage interest deduction."

"In summary, the mortgage interest deduction is almost exclusively claimed by households in the top income brackets and younger individuals with large mortgages..."


It's like you advertise your ignorance about certain topics.

What a bunch of crap. Reason.org? Really? How about some raw IRS published numbers?

Yes. The more the house cost the more money can be claimed as a deduction. The total value of the deduction is weighted to the higher incomes. Which one resasons I said I'm for limiting the deduction.

However, far more that 25 percent of taxpayers claim the deduction. Lower income people's buying mortgages depend on the tax break more than those claiming huge mortgages expenses.

Again. When interest rates go up... it will become much more important to lower and middle income taxpayers.

Have you ever heard of Fannie Mae and Freddie Mac?

I'll wait for the raw IRS numbers. They don't line up with what you're saying. Not even close.

Time for you to ask mom for some more Cheetos and Dr Pepper!

 

[rsc2a]

This might be your first time looking at a research article so I'll walk you through it...

There are these things called Appendices. In the link I provided, there are several, including many showing how many people claimed the mortgage interest deduction (MID). Part of good research is sourcing your data. They have done that here. Let me help you out:

Source: U.S. Congress, Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2010-2014

That source...you know the one that's based on actual IRS numbers gives an average rate of households claiming the MID as ~23% with the numbers ranging from 20.7% to 26.3% over a given year. (Hint: it's also important to provide ranges, medians, standard deviations, etc for research because an average can be heavily skewed with only a few outliers. This data does not have those outliers.)

Furthermore, Appendix C then shows the actual breakdown for how they determined how much people are actually saving. Looking at the returns claiming MID, the marginal tax rates for the various households, and the annual savings for itemizing with a MID instead of taking the standard deduction. In case you missed it, here's their data source again:

Source: U.S. Congress, Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2010-2014

Even for the people making $100-200k per year, the annual saving amounted to less than $750. Lower income households were in the $100-200 savings range per year. And your argument is that lower income people depend on that savings to purchase a home? They depend on a tax savings that amounts to a pizza or two a month? Riiiiiight.

Since you are so new to research articles, I thought I might explain those things at the end as well. They are called "end notes", and they have lots and lots of information including the original sources, assumptions, calculations, and further analysis. In fact, I found #47 very interesting:

The United States is one of six Western economies with a mortgage interest deduction, the others being Belgium, Ireland, Sweden, Switzerland and Netherlands. Canadian housing prices have gotten along just fine without a mortgage interest deduction, and Canada?s homeownership rates are higher than America?s.



Let me see....if I remember the script correctly, this is where you call me an idiot, right?

 

[subllibrm]

I worked with a guy who was almost done paying off his house. He went out and got a new re-fi mortgage because if he didn't he "wouldn't have anything to deduct".

Honest, I did try to help him with the math but there was no convincing him that he was better off with no house payment than getting 25 cents back for every dollar of interest he paid. Guys like him are the reason the the playing field will never be totally "level".

 

[praise_yeshua]

I worked with a guy who was almost done paying off his house. He went out and got a new re-fi mortgage because if he didn't he "wouldn't have anything to deduct".

Honest, I did try to help him with the math but there was no convincing him that he was better off with no house payment than getting 25 cents back for every dollar of interest he paid. Guys like him are the reason the the playing field will never be totally "level".

What did he do with the money? If he used the money for something he needed.... and got a tax deduction at the same time.... It was worth it.

Maybe you need a tax lesson or two.

 

[rsc2a]

A tax lesson. Paying the bank a dollar so you don't have to pay  IRS a quarter. You've definitely bought the line the banking industry is selling.

 

[praise_yeshua]

This might be your first time looking at a research article so I'll walk you through it...

There are these things called Appendices. In the link I provided, there are several, including many showing how many people claimed the mortgage interest deduction (MID). Part of good research is sourcing your data. They have done that here. Let me help you out:

Source: U.S. Congress, Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2010-2014

That source...you know the one that's based on actual IRS numbers gives an average rate of households claiming the MID as ~23% with the numbers ranging from 20.7% to 26.3% over a given year. (Hint: it's also important to provide ranges, medians, standard deviations, etc for research because an average can be heavily skewed with only a few outliers. This data does not have those outliers.)

Furthermore, Appendix C then shows the actual breakdown for how they determined how much people are actually saving. Looking at the returns claiming MID, the marginal tax rates for the various households, and the annual savings for itemizing with a MID instead of taking the standard deduction. In case you missed it, here's their data source again:

Source: U.S. Congress, Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2010-2014

Even for the people making $100-200k per year, the annual saving amounted to less than $750. Lower income households were in the $100-200 savings range per year. And your argument is that lower income people depend on that savings to purchase a home? They depend on a tax savings that amounts to a pizza or two a month? Riiiiiight.

Since you are so new to research articles, I thought I might explain those things at the end as well. They are called "end notes", and they have lots and lots of information including the original sources, assumptions, calculations, and further analysis. In fact, I found #47 very interesting:

The United States is one of six Western economies with a mortgage interest deduction, the others being Belgium, Ireland, Sweden, Switzerland and Netherlands. Canadian housing prices have gotten along just fine without a mortgage interest deduction, and Canada?s homeownership rates are higher than America?s.



Let me see....if I remember the script correctly, this is where you call me an idiot, right?

They do not "link" to the raw data. They "claim" to include it. I'll wait for the RAW data. Which I've already reviewed. There is a reason you're not providing the raw data.

I see that you ignored my question on Fannie Mae and Freddie Mac? Why? You know one of their primary goals is home ownership for lower and middle income families. Something you're ignoring.

I can assure you that I've experienced this first hand. I don't own a million dollar home. Not in the too distant past I could claim over $10,000 off my gross income annually through the mortgage interest deduction. I was on the very edge of falling into a higher income tax bracket that would have cost me much more in taxes. The amount of the deduction saved me from this. Which saved me thousands of dollars in taxes. I was even on the edge of being able to claim the child credit for all of my children. It helped me keep from losing that deduction as well. I eventually lost it due to taking advantage of a lower rate in refinancing. My taxes went up considerably. Not just a few dollars a month like many of these morons claim.

When you throw all the numbers into a big pot and start processing them, you distort the reality of what they mean. The issue is much more nuisances than claiming what they are claiming.

Conservatives often want to distort the truth as much a liberal. Some conservatives want to do away with the mortgage interest tax deduction so they can use the monies to prove they can implement a flat tax system. They forget just why it was created in the first place. Either that.....or they don't care.

 

[praise_yeshua]

A tax lesson. Paying the bank a dollar so you don't have to pay  IRS a quarter. You've definitely bought the line the banking industry is selling.

Lets see....

If the mortgage was used to purchase something necessary...... like to pay healthcare costs or hospital bills.... then you get a tax deduction on the interest paid.....

Its a win win.. situation.

You really can't get past 1 + 2 can you?  You're really stupid.

By the way. Why didn't fuss at John John for calling me a moron? Do you have a situational morality?

 

[rsc2a]

Here's what the past two posts have taught us:

- Everyone but PY is an idiot.
- Even when given the sources, researchers are lying about the sources.
- PY is really, really bad at math. I mean really bad.
- PY is convinced he can read my PMs.
-PY understands the fine art of the humble brag.
- PY is the smartest man who has ever lived (although he sucks at math).

 

[subllibrm]

I worked with a guy who was almost done paying off his house. He went out and got a new re-fi mortgage because if he didn't he "wouldn't have anything to deduct".

Honest, I did try to help him with the math but there was no convincing him that he was better off with no house payment than getting 25 cents back for every dollar of interest he paid. Guys like him are the reason the the playing field will never be totally "level".

What did he do with the money? If he used the money for something he needed.... and got a tax deduction at the same time.... It was worth it.

Maybe you need a tax lesson or two.

He wasn't looking for cash to pay for something, he was looking for a way to lower his taxes. I was pretty clear in the original explanation. If he was paying a cancer treatment bill off I would not have mentioned his story. I mentioned it because he thought he would "save money" by borrowing to have something to deduct.

Now feel free to throw more what ifs into it but none of them will change the fact that the guy was seriously unable to understand the basic concepts of debt, investing and money management.

 

[praise_yeshua]

I worked with a guy who was almost done paying off his house. He went out and got a new re-fi mortgage because if he didn't he "wouldn't have anything to deduct".

Honest, I did try to help him with the math but there was no convincing him that he was better off with no house payment than getting 25 cents back for every dollar of interest he paid. Guys like him are the reason the the playing field will never be totally "level".

What did he do with the money? If he used the money for something he needed.... and got a tax deduction at the same time.... It was worth it.

Maybe you need a tax lesson or two.

He wasn't looking for cash to pay for something, he was looking for a way to lower his taxes. I was pretty clear in the original explanation. If he was paying a cancer treatment bill off I would not have mentioned his story. I mentioned it because he thought he would "save money" by borrowing to have something to deduct.

Now feel free to throw more what ifs into it but none of them will change the fact that the guy was seriously unable to understand the basic concepts of debt, investing and money management.

I thought just had to be more to the story. Yes. That is rather dumb of him.

 

[praise_yeshua]

Here's what the past two posts have taught us:

- Everyone but PY is an idiot.
- Even when given the sources, researchers are lying about the sources.
- PY is really, really bad at math. I mean really bad.
- PY is convinced he can read my PMs.
-PY understands the fine art of the humble brag.
- PY is the smartest man who has ever lived (although he sucks at math).

Yes. Researchers lie about the sources of their information. Just look at the Global Warming NUTS.

Any GOOD, fair mind individual would want to see the RAW numbers themselves. Not some graph produced by a biased entity.

Say whatever you want to say. You haven't provided the RAW numbers from the IRS. Just FYI. Around 13 to 15 percent of lower and middle income taxpayers take advantage of the mortgage interest deduction. The housing crash affected the numbers. Many lower and middle income people lost their homes. This is why the numbers have went down over the last several years. Low interest rates have made the tax deduction less effective for those who have refinanced their homes. So much so, that in some circumstances, lower and middle income taxpayers can get more tax relief from the standard deduction.

For the record. I am against mortgage interest deductions for millionaires...or the supper wealthy. I think it should tied to personal income and not to home value.