US Treas mulls own stamp on tax code overhaul (eliminating mortg deduction

[UpInArms]

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-07-13T175120Z_01_N13454370_RTRIDST_0_ECONOMY-TREASURY-TAXES.XML

WASHINGTON, July 13 (Reuters) - U.S. Treasury officials are likely to put their own stamp on a proposed comprehensive overhaul of the tax system suggested by a blue-ribbon panel in November, an official said on Thursday.

"We have been considering our own possible options," said Treasury Department tax official Eric Solomon, who has been nominated to fill the long-vacant position of assistant secretary for tax policy.

Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, pressed Solomon to tell the panel when Treasury would forward its recommendation to President George W. Bush. The Treasury is working from the recommendations of a bipartisan panel that proposed a series of steps aimed at making the U.S. tax system simpler and fairer, including eliminating many deductions and reducing tax rates.

<snip>

The panel recommended eliminating deductions for many taxpayer costs, including mortgage interest and state and local taxes. The panel also proposed requiring workers to pay taxes on health care benefits provided by their employers.

...more...

[Chimichurri]

1. I have an idea. STOP wasting 2 billion dollars a week in Iraq

instead of hurting the poor/middle class.

Jeez. When's it gonna stop?

[saigon68]

2. THEY LOVE THE CHIMP

BECAUSE

1. THEIR GUNS WILL BE SAFE

2. GAY GUYS CAN'T GET MARRIED

3. THOSE TRAMPS CAN'T GET ABORTIONS

see how simple that is--

LOL

[Tight_rope]

67. I'll sign that plan...Best plan I've heard!

[SoCalDem]

3. Those are the last two nails in the coffin for middle classers

Enjoy the ride to the bottom of the barrel

[indepat]

6. 'Pukes will hammer in a few more nails for good measure: bastards

never did like having a middle class.

[KansDem]

82. "never did like having a middle class."

That's right...the middle class links Repukes with the lower class!

Gotta have some empty space between Repukes and the unwashed.

[Davis_X_Machina]

4. The attempted elimination of the mortgage deduction has....

...a long history on the right.

The theory -- and it's been around since at least Reagan's first term, is that home ownership needs to be discouraged.

Workers who own aren't as mobile as workers who rent. Thus, they tend to support plant closure laws, and other impediments to free corporate action. If they were renters, it would be easier to get the workers to move to the new, non-union, low-wage, low-regulation workplaces in the states that have the most attractive business climate.

The intent is to empty out Democratic states, break unions -- like that has't already basically happened -- and get everyone to move to a Southern or Southwestern sprawl suburb, join a mega-church, and otherwise act like proper Americans.

It's also an attack on the elderly, since the home is usually the only sigificant asset old folks own. Equity disturbs the natural balance between those who are booted and spurred and born to ride, and those who are born to be ridden.

[fshrink]

10. Exactly.

A trend already mapped out by Marx over a century ago.

[Patchuli]

55. Well that certainly does not sound like

an "ownership society" as stated by DimSon! Bastards...

[struggle4progress]

96. Foreclosures boost housing market

July 13, 2006
Foreclosures boost housing market
From staff and wire reports

The collective surge of foreclosures across the nation is a driving force in an otherwise sluggish real estate market, according to a six-month data analysis released Wednesday .

The analysis comes from Foreclosure.com, a major provider of distressed properties lists, which is based on current listings from around the country and data from the National Association of Realtors.

The 2006 mid-year market analysis shows foreclosure properties are changing hands at almost twice the rate of existing home sales as a growing number of loan defaults convert to foreclosures ...

http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20060713/BIZ/607130364/1005/biz


REPUBLICAN ECONOMIC THEORY: "Eliminate the mortgage deduction, drive foreclosures up even higher, help the realtors earn commissions"

[fat dad]

99. Here's how a Republican explains it:

"The mortgage interest deduction encourages families to overinvest in housing at the expense of other investments, such as stocks and bonds that would provide capital for business expansion and modernization. Ideally, we should level the playing field such that the tax code does not bias investment, so that capital can seek the best returns determined by market conditions, not the government."

"The deduction for state and local taxes encourages states and localities to impose higher tax rates than would otherwise be politically tolerable. The deduction also encourages excessive consumption through local governments -- providing services, such as trash collection, that could easily be done by the private sector."

"The exclusion for health insurance has deeply distorted the market for health care, encouraging people to consume far more of it than they would without a de facto tax subsidy. "

[bmcatt]

5. Watch the real estate market collapse

Getting rid of a mortgage interest deduction pretty much removes any incentive for owning a house. Sure you build equity, but at the cost of paying through the nose for the mortgage, taxes, insurance, etc. Without an interest deduction, I'd guess there will be lots of people who try to get rid of their houses so they can downsize into apartments or rentals.

[Gormy Cuss]

18. The other predicted effect is that prices will go down rather dramatically

because in the affordability calculation the tax benefits are no longer in the equation. Yes, initially it might cause a lot of dumping by people who count on the deduction, and this will increase the available properties and lower or at least stabilize house prices. Future buyers will not consider the tax deduction when assessing affordability and will look for lower priced housing.

That is the spin from the right on this issue.

[progressivebydesign]

39. It's bullshit. It is not going to help people buy homes.

People can afford to buy homes right now.. what the REAL issue is, is that our jobs are disappearing overseas. If you want to live in Santa Barbara or Manhattan, yeah, you can't afford a house... but houses are affordable all over the country. DOn't buy the right wing bullshit. The real story is lack of earning power, jobs, and stability. They're trashing the middle class on purpose! And this is just another salvo.

[Gormy Cuss]

48. I said it was the right wing spin, didn't I?

But it WILL allow some people to buy houses -- investors will be all over it.

[redqueen]

69. Yes, it will further erode the middle class,

and create great investment bargains for the upper class in the process. So they can then turn around and rent their extra properties to the poor.

[LostinVA]

23. Bingo n/t

[dysfunctional press]

81. and rents will go up, up, up...

as a landlord- if i lose my mortgage interest deduction, i'll be forced to raise the rent to help make up the difference.

[FlaGranny]

91. You might still be able to deduct your interest

because your interest AND mortgage payment are business deductions - I think. If interest is still allowed as a business deduction - landlords will not be hurt at all.

[dysfunctional press]

93. it might make a lot of people decide to rent out rooms...

at least on paper.

[Arger68]

7. Why do Repubs always want to raise taxes??

Since 2000 my property taxes are up like 125%. My income taxes are roughly the same, I haven't seen any cuts. Now they want to raise my taxes by taking away deductions. Why can't people see this??:mad:

[Davis_X_Machina]

8. 'Why can't people see this?"

The long lines of gays waiting to get married blocks the view.

[Jawja]

85. That's a good one!

:rofl: :thumbsup:

[joeunderdog]

80. How else can the bilionaires get tax cuts?

[AlCzervik]

9. i notice they didn't set a limit on the mortgage deduction, will it be for

mortgages over a certain amount that can still deduct? This is where the average person could really get screwed bigtime, especially people who have just gotten mortgages.

[UpInArms]

11. as I read it - the word used was "eliminate" not "modify"

so it's buh-bye Miss American Pie - No Chevy - No Levy

Just "gone"

"poof"

:hi:

[denverbill]

12. Where are all the 'fair tax' supporters today?

After all, this is the first step in creating the 'fair tax'. You've got to eliminate all the deductions.

Taxing health care benefits is a new one though.

I guess we have to pay for repealing the estate tax on the fabulously wealthy somehow.

[UpInArms]

13. more of the Dimson's roaring economy crapspew

I hope all those folks really enjoyed getting their 2002 $300 tax refund early in 2001 - it has definitely cost them dearly.

[mtnester]

14. There go the last deductions I have.....

OK, Everyday, I go to work, the first 5.07 per hour of EVERY hour of my paycheck goes toward Federal, Medicare, State and local taxes, and my pension (or SS if I were in that plan)

In Ohio, my state and local tax burden is 12% of my income, 3rd highest in the nation http://www.taxfoundation.org/research/topic/50.html

On to sales tax and other tax:

On average, they say I pay $808 in sales tax annually at a state sales tax rate of 5.5%. However, in the county I do most of my purchases in, it is 6.25%, which would raise that to 918 annually. I also lease a car, so add on $272 annually for the sales tax on that. Gasoline tax is 28 cents per gallon here, so, my average gasoline tax annually would be around $500.00 annually.

On to my self inflicted taxes - I smoke (no lectures now, ya hear, I only do it outside at my home)about a pack every two days, which equals $4.38 weekly in cigarette tax (Ohio per pack is $1.25 per pack), which is $227.76 annually. (Again, self inflicted but what I pay goes toward the State of Ohio). Next, alcohol...I myself do not drink really enough to count this, however, if I drank beer it would be 16 cents a gallon, and wine or hard liquor, 30 cents a gallon (plus additional sales tax)

Add on the $2600.00 annually I pay in property taxes (in addition to a school district income tax, mind you), and my additional tax burden amounts to $4517.76 (per capita average, forget if I purchase any major appliances, etc.)

So, I need to add $2.18 to that earlier figure of the first $5.07 of every hour...bringing my total tax burden to the first $7.25 of my hourly rate of pay, every hour, goes toward state, federal, local, city, school, property, sales, gasoline, and cigarette taxes. Every day. The first $7.25 of my hourly rate of pay, every hour of every day.

I repeat, the first $7.25 of my hourly rate of pay, every hour, of every day, toward taxes even on holidays and vacation or sick time off.

And even with extra money taken out each week for federal taxes, I owe at the end of the year, because we are in alternative minimum tax (so only one of us can take the deductions)and we are not far enough in debt as far as mortgage interest goes to be able to take it jointly to our benefit.

Taking away what little we can get in mortgage interest (which keeps us combined from owing even more) will kill us..not to mention when property values fall on the free market (will our county auditor take that into consideration? No, they only look at that every 6 years for the big re-evaluation, and the current one is happening now, so our property taxes will remain at the pre-value freefall until at least 2012, of course with adjustments upward annually of about 4%).


Someone tell me this has no chance...please?! This would give me serious consideration to quit my job and stay at home...or at least analyze the benefits of such.

[RawMaterials]

17. throw in the fact that ohio minimum wage is 5.15 an hour

"So, I need to add $2.18 to that earlier figure of the first $5.07 of every hour...bringing my total tax burden to the first $7.25 of my hourly rate of pay, every hour, goes toward state, federal, local, city, school, property, sales, gasoline, and cigarette taxes. Every day. The first $7.25 of my hourly rate of pay, every hour of every day.

I repeat, the first $7.25 of my hourly rate of pay, every hour, of every day, toward taxes even on holidays and vacation or sick time off."

so even if you made the 6.85 they want to raise it to you would still be in the whole.

I'm from ohio and always remember that the high taxes help fund the best public schools (high school and college) funny because the University of Cincinnati is now up to almost 10k a year just for tuition, room board and food would take it upto around 18k for a instate public school college education.

just make me :puke:

[mtnester]

21. a few years back, they removed the caps that public universities

could raise tuition annually, and IMMEDIATELY they went through the roof and continue to go up approximately 6% OR MORE each half year.

10 grand at UC? Probably closer to 12 now...do not EVEN ask me what we paid for our son's 4.5 years at Miami (Oxford)...I have an entire printout the university sent to me when it was over per my request for every dime we were charged, and it was STAGGERING...and our son lived off campus for all but that first freshman year when they require them to live in dorms.

We paid over $80,000.00, or roughly $18,000.00 per year for a PUBLIC (yeah ok it is Miami, but STILL considered a public college in Ohio). And our son got out in 2004..I cannot even IMAGINE what it is now.

$7.25 hourly for me is about 36% of my total hourly income....for a person who makes $5.15 hourly that would be $1.85 of their hourly, every hour, for taxes.

NONE of this info includes food, rent, health insurance, actual gasoline or car payments, etc etc.

[RawMaterials]

25. what ever happened to the whole

no taxation without representation :shrug:

[midnight]

28. The IRS removed that whole idea.

It's time to remove the IRS.

[slackmaster]

60. That ended in 1791

With the tax on whiskey.

[The Wielding Truth]

45. Did you know that the Parent Plus loans interest rates have risen to 8.1?

I haven't been able to save tuition so I'm stuck, and mortgage interest deduction is an important contribution to any hope of a college education even at a state school.

[mtnester]

50. Equity is how we paid fpr our son's college

pure and simple.

[progressivebydesign]

40. Our property taxes here went up 40 to 100% this year.

Between interest rates, prop taxes (to make up for what the Feds refuse to fund anymore) and unfunded mandates, and the loss of the mortgate deduction, their dismantling of the American Dream is complete. God.. I hate those people.

[Theres-a]

15. And after that

Their next project will be debtors prisons.

[w4rma]

19. Local and better controled cheap labor than illegals. (nt)

[Theres-a]

22. Ding, Ding, Ding

Pure Evil.

[midnight]

16. Blue Ribbon panel should find where the money went.

U.S. Treasury in New York release the largest sum of money in US history. No paper trail. Another thought the Blue Ribbon panel can recommend if they truely want a system in America that is simpler and fairer get rid of the IRS.

[IndianaGreen]

20. Blue ribbon panel should be shipped to Fallujah

Anyone that came up with these anti-worker and anti-middle class ideas should be shot!

[dbackjon]

24. No problem with me eliminating Morgage Deduction

It discriminates against renters, and countries that do not have it have the same rate of home ownership as the U.S.

It inflates prices, makes EVERYTHING more expensive, and only benefits home-owners. (And how many of us are renters? Probably a good chunk of the Democratic base.

It is also ABUSED by many - who roll credit-card debit and other non-deductable loans into re-financed mortgages, etc.


Now taxing health benefits - HELL NO.

[slackmaster]

29. How is it "abuse" to leverage home equity to pay off high-interest debt?

We who have done that are following the rules.

Are you just miffed that you can't do it?

High interest rates and an unstable job market kept me from being able to own my own home until I was almost 37 years old. I cannot accept anyone telling me I am abusing the system by using tax benefits that have been available to homeowners for generations.

[dbackjon]

33. Because that is not what the mortgage deduction was intended for

Hence, abuse.

You are cheating/abusing the system - the same as the Big Businesses/wealthy that everyone rails against.

[slackmaster]

42. You don't have the dimmest idea what you are talking about

Interest on home equity loans for home acquisitions and improvements, i.e. for other than first position mortgages, was made fully deductible as part of the Tax Reform Act of 1986. So was equity financing for other purposes, up to a limit of $100,000. I am using the mortgage interest deduction on my equity credit line, which presently has a balance of a few thousand dollars, for precisely the kind of things that Congress intended when it passed TRA '86. Deductibility of interest on consumer loans (e.g. car loans) was phased out over a three-year period. I was an operations analyst working for a bank at the time.

How dare you accuse a fellow DUer of "cheating/abusing the system"? Your comments are ridiculous and insulting. The mortgage interest deduction in its present form is intended to make it easier for people buy homes AND to make improvements to them AND to allow people to collateralize a limited amount of their equity for any other lawful purpose, such as buying a vehicle (which is the only significant purchase I used mine for). Using it for a vacation to Borneo would also be perfectly legal and within the intent of the law.

The law allows me to leverage the value of my property in order to get better interest rates on loans. That is exactly what the system is intended to do as a benefit for homeowners - We can use secured credit to finance things that previously could only be bought with unsecured credit. The changes passed in 1986 also benefited lenders by expanding the scope of loans that can be secured by home equity - It allows them to lend money at lower rates because of the greater security of collateral that can't be moved around.

Please read IRS Publication 936, which explains deductibility of home mortgage interest. If you understand what is deductible and what is not, it should become clearer to you what the intent of current law really is.

http://www.irs.gov/pub/irs-pdf/p936.pdf

[dbackjon]

66. So any thing that is "Legal" is not an abuse of the system?

So all tax shelters are ok, as long as they are "Legal"? I do know what the hell I am talking about, and it is an ABUSE of the tax system, whether legal or not - why the hell should you get to deduct interest on your fucking vacation to Borneo, just because you own a house?????????

[slackmaster]

77. Reading DU is making you smarter already!

So all tax shelters are ok, as long as they are "Legal"?

Absolutely, as long as they are used in a lawful manner. It would be wrong, for example, to lie on your tax returns and mischaracterize a second home, and take a deduction you are not entitled to. But that would be illegal. So yes, if a tax shelter is legal then it's Kosher and moral and good and right and just. And you would be a FOOL not to avail yourself of it. If you don't like it, if you think the law is unfair, tell your congresscritters.

...why the hell should you get to deduct interest on your fucking vacation to Borneo, just because you own a house?????????

That's about the size of it. It's one of the many benefits to home ownership. It doesn't entitle me to a free vacation, just to effectively lower interest payments on money I borrow to finance that vacation. I still have to pay for it all in the long run.

Since you have apparently never owned a house you may be unaware of the downsides, the liabilities of home ownership. It may seem from your POV that the mortgage interest deduction "discriminates" against renters. I used to think that way too. But renters aren't responsible for upkeep of the property, or property tax, or homeowner's insurance to cover things like fire, flood, and general liability. If I decide to sell my home, to cash out and go back to renting, I'd be stuck with a huge capital gains tax on the appreciation my house has seen since I've owned it. (I'm not old enough for the once-in-a-lifetime exemption for that.)

Saying the deduction is discriminatory because you rent makes about as much sense as me saying that property tax discriminates against homeowners because renters don't have to pay it. Sheesh, why should I finance public schools for your kids? (In fact I am happy to pay for public schools.)

BTW renter's liability insurance is cheap. I hope you have some. It helped me out when a stupid kid fell and hurt himself in the yard of my last rental house.

ETA but the best benefit of home ownership for me has been NO MORE ASSHOLE LANDLORDS!

P.S. Your landlord is probably making mortgage payments and taking the deduction for interest. Suppose the deduction is taken away. That will throw your landlord's family budget off kilter. What is he or she going to do to make up for the loss? Maybe go to his or her boss (if any) and say "Boss, I need a raise to make up for this change in the tax code." Maybe your landlord will cut his or her standard of living. But more likely he or she will simply pass on that expense to YOU.

[UpInArms]

32. Tax Reform Act of 1986 signed by Raygun

http://www.answers.com/topic/tax-reform-act-of-1986

excerpt:

The act also eliminated the deductibility of nonmortgage consumer interest payments such as interest on credit card balances, automobile loans, and life insurance loans. It also established the floor for miscellaneous expenses at two percent of adjusted gross income for taxpayers who itemized deductions.

Individual Retirement Accounts (IRAs) once allowed a taxpayer to invest before-tax dollars and enjoy tax-free compounding of interest. The 1986 statute ended full deductibility of IRAs for single employees covered by qualified retirement plans and earning more than $35,000 annually. For married employees the cutoff for full deductibility was set at $50,000. In addition, the law imposed a penalty on withdrawals of IRA contributions before the age of fifty-nine and a half years.

Another retirement plan, the Keogh plan, permitted under section 401(k), once allowed a taxpayer to invest up to $30,000 a year without paying taxes on this income. The ceiling dropped to $7,000 in 1987.

The act also eliminated a provision that had enabled two-income married couples to reduce their taxes. A couple can no longer take a deduction based on the lower salary of the two; the deduction had allowed them to pay the same tax on the lower salary as a single person would pay on that amount. The act also abolished "income averaging." Formerly, individuals whose incomes varied considerably from year to year could average their income over several years, a calculation that resulted in lower taxes owed in the years of highest income.

The ballooning federal budget deficits of the late 1980s and early 1990s led Congress to make changes in the 1986 act. The 1993 Revenue Reconciliation Act revamped the rate structure, imposing rates of 15, 28, 31, 36, and 39.6 percent. The act also limited itemized deductions for upper-income taxpayers and removed the limit on earned income subject to Medicare tax. The 1993 act also established tax incentives for selected groups and reduced the amount that can be deducted for moving expenses and meals and entertainment.

[slackmaster]

46. Please correct me if I'm wrong, didn't Democrats control both houses

of Congress in 1986?

[UpInArms]

51. GOP controlled the Senate until 1987

http://en.wikipedia.org/wiki/U.S._Senate_election,_1986

The U.S. Senate election, 1986 was an election for the United States Senate in the middle of Ronald Reagan's second presidential term. As a midterm election, and one which occurred six years after major Republican gains from Reagan's coattails in 1980, the Democrats had a better chance to gain seats - only twice since 1918 had the out of Presidency party failed to gain seats, with the average shift being four. However, 1986 was unusual in that it was the first time since 1918 where the chamber had changed hands in a second term midterm.

In the election, the Democrats gained a net eight seats, and recaptured control of the Senate from the Republicans with a 55-45 majority. Robert Dole (R-KS) and Robert C. Byrd (D-WV) exchanged positions as majority and minority leader.

and they had a weak Congressional majority until the elections of 1986

http://ap.grolier.com/article?assetid=0070050-0&templatename=/article/articl...

From 1955 to 1995 a majority of the members of Congress were Democrats. In 1980, Republicans gained control of the Senate and reduced the Democrats' majority in the House, but Democrats recovered control of both houses in 1986. The pattern of Democratic control of the Congress while Republicans occupied the White House persisted until Democrat Bill Clinton became president in 1993 and the Republicans took over both houses of Congress in 1995. In 2000 the Republicans captured the presidency as well—in the person of George W. Bush—though their majorities in Congress were reduced. (See Democratic party; Republican party.) In fact, in January 2001 the 107th Congress convened with an evenly divided Senate—50 Democrats and 50 Republicans—although the Republicans could use Vice-President Richard Cheney to break tie votes. That political configuration changed in May, however, when Vermont senator James Jeffords switched from the Republican party to become an Independent, leaving the Senate with 50 Democrats, 49 Republicans, and 1 Independent. In the 2002 congressional elections the Republicans took back control of the Senate with a one-vote majority and added to their majority in the House.

[Patchuli]

58. How is it hurting you

if others pay off their debt with their own equity? That's very strange thinking.

[dysfunctional press]

83. yahoo- rents will go UP...cha-ching!!

as a landlord- if i lose my mortgage intertest deduction, i'll definitely be raising the rent to make up the difference- cha-ching!...and since there will be less incentive to own a home or build new ones- there'll be more demand for the existing supply of rental units- cha-ching! again...

[progressoid]

26. Yet another way to SCREW the working class.

[Roland99]

27. Panel was chaired by a Repuke and Vice-Chair was John Breaux?

http://www.ontheissues.org/Senate/John_Breaux.htm

[IndianaGreen]

57. A puke and a DINO

with the little guy and gal getting the shaft!

[MadHound]

30. Here we go, now that they've cut the tax rates for the rich

They figure that they've got to balance the budget somehow. Thus they're going to balance it on the backs of the middle class and the poor.

For those of you who are in the same situation as I, ie living in the counrty with open zoning, a solution might be to form a company, an LLC that would include your house and property. Then perhaps what you lose in mortage deduction you can get back in business deductions:shrug: Worth checking out, I am, since I'm actually building a business on my land.

[pitohui]

41. insurance liability is the issue there

1) your regular homeowner's insurance, flood insurance etc. won't cover you for the portion used for the business, and they'll say everything was used for business -- your computer gets stolen, guess what, now it isn't covered -- your homeowner's insurance agent must never find out you have a home business, unfortunately mine has always known abt one of my home businesses from my lender

2) in my state the business owner is required to purchase, every year, $1,000,000 worth of insurance coverage for the businesses -- i personally know of two home businesses sunk into bankruptcy by that requirement

3) you have to actually have a business or it's fraud, since most businesses don't make enough to live on (think selling on ebay) you still have to have a job -- when is a person supposed to even find time to take a breath? one of my friends has a home business and still has to have two jobs and her ceiling is literally coming down in patches over her head

4) and of course the kicker is that most people live in areas where they are zoned and all it takes is one person to bitch abt you and you get ticketed, that has happened to just abt everybody i know w. a home business except myself -- i can prove that i've NEVER had a customer park at my house, which saves me

your idea is great for some people and everybody should investigate it BUT for large numbers of people it will turn out to cost even more $$$ (and time) rather than save $$$


don't mean to sound so negative, we DEFINITELY need to brainstorm different solutions to save our asses from the greedy but just pointing out why more people might choose not to go that route

[ikojo]

53. They know they can do this because the middle

class identifies itself as pre rich and thus will not DO A THING to challenge this. In most western countries the streets would be packed with angry people protesting this. Work would be stopped and they would know why. Look at what French farmers did in France when the government over there wanted to do something that would hurt them.

[redqueen]

72. You mean here we go *again*...

remember Ray-gun also balanced his giveaways to the rich on the backs of the workers... by increasing social security payroll taxes on them, and allowing the wealthy to earn tax-free income above $70K or so.

Sick bastards.

[zara]

31. Put the Race-To-The-Bottom in Overdrive!!

Which state can provide the least? Red states win!

[RobertSeattle]

34. Oh PLEASE run on this GOP Please!

:evilgrin:

[unblock]

35. it's up to us to MAKE them run on this

trot this REPUBLICAN TAX HIKE plan at every opportunity.

if they deny it, it becomes the SECRET REPUBLICAN TAX HIKE PLAN THEY DON'T WANT YOU TO KNOW ABOUT!

[Strelnikov_]

92. I Agree. This Would Be A Gift . .

that our leadership that would fumble in no time.

But still, we would have that brief period of hope.

[Az_lefty]

36. see...Repigs actually raise taxes not lower them.

:puke:

[high density]

37. Ugh, the GOP talking about "fairness"

That's bound to be great for the working class. :eyes:

[progressivebydesign]

38. They've already fucked over homeowners with the interest rate bullshit.

Why not complete the act by taking our deduction? Goddamnit.. Impeach those bastards! I've had it today...

[RUMMYisFROSTED]

43. People would march in the streets.

Leaders might even be torn limb-from-limb.

I see it as more of a trial balloon than something that will happen this decade.

[Sapere aude]

44. Fair is to bring back the consumer interest deduction. With so many of

us paying on high interest credit cards, we could use the consumer interest deduction again.

Basically what the right wants is to shove the tax burden onto the middle and lower classes. We get no increase in pay but we get increases in taxes and cost of living. Soon there will be no paychecks. All your money will be sent either to the government or your creditors by the sheriff.

[Patchuli]

47. How's about not cutting taxes on the uber-wealthy

and getting us out of the bottomless pit in the sands of Iraq FIRST!

Those bastards better NOT cut the mortgage deduction! Geez, what the hell is wrong with them? How stupid can you be?!!!!

[bobbieinok]

49. mortage interest, state tax are MAIN middle class deductions

And then to pay taxes on health care benefits???

Anyone NOW doubt republicans want to kill middle-class.

BTW, years ago you could deduct $300 (?) of what you paid for health insurance; it didn't have to be some % of total income. You could also deduct state sales taxes; if you didn't keep records, there was a chart in IRS booklet for amount different size families could deduct for each state. You could also deduct your employee expenses (union dues, professional journals and dues, etc); it did not have to be % of total income. There was a time when foreign language teachers could deduct the cost of a trip to the country where the language was spoken; you didn't have to be attending a course or a conference.

--All these were middle-class deductions.

[Historic NY]

52. I live in NY the state where taxes never end....

they become fee's. If you visit a park, or do anything that involves the state you pay a fee. We have very few things that can be deducted and mortage interest and state, local & skyrocketing school taxes are the only way some people can make it. I've retired and am not on SS so its just my pension taxes represent 2 months of pension checks. When you figure in gas & electric another 2 months that leaves me with roughly 8 checks to live off of, buy gas, food, repairs and pay other bills & insurance. I'd probably have to sell my house, cars and move to a cheaper state.

$9,570 is the poverty level for a family of 1 in 2005. You can't even find a rental for under a $1000 where I live unless you move to the city and the ghetto.

[davekriss]

54. Another Repug mechanism for the upward transfer of wealth!!!

First, we all understand that if the mortgage interest deduction was eliminated housing prices would fall until it equilibrates at some value representing net present value minus the tax benefit. But understand from whose ledger the equity loss will come. It's not the banks who will be hurt, but current homeowners.

Say, after saving for years for closing costs and downpayment, then building equity through diligent mortgage payments and through market valuation gains, you now find yourself in a $300,000 house carrying a $200,000 mortgage. Feeling smug, your nice 6-figure equity cushion helps you sleep at night. Then, after all this past history they pull the mortgage interest deduction rug out from under you and housing values drop by 33%. Think the banks will split the difference with ya'? Riiiight.... You now own a $200,000 house with the same old $200,000 mortgage.

Further, your take home pay is substantially reduced. Say that $200,000 30 yr mortgage is financed at 6%. I don't have a calculator in front of me but I guess monthly payments of around $1,800. Say you're in the 10th year of the loan, meaning about 80% of that is interest, or $1,440. If your in the 25% marginal tax bracket and, say, 5% in state bracket, then your monthy tax savings is $1440 x (.25 + .05), or $432 per month. Same house, same state, same country, but now due to Republican tax policies you have to pay $432 more per month after losing 100% of your cushion. And in these days of tattered safety nets, that cushion may have been all you had.

Any old Chomskyite would ask, Who benefits? Certainly not the homeowner. The banks? Well, not until foreclosures skyrocket (which I get to below) and they're obtaining ownership for pennies on the dollar. The federal government benefits through a technique known as base broadening. Tax brackets may go down but, as deductions are eliminated, the middle class taxpayer may end up paying more in taxes than before. Eliminate the mortgage interest deduction, and they certainly will face higher taxes. And that's the whole point -- it's a stealth step to transfer tax burden off of the overlord class and onto the middle class. Every tens of billions collected off our backs diminishes the need to take if off theirs.

But let's return to my example: Say you just got in to that $300,000 house this year and on a 5% down loan, though it required you to pay a point higher. You plop down your $15,000 and another $10000 for closing costs and, walla', you and your family are in the house of your dreams. Then they pull the rug out from under you. Housing prices fall 33%. You now owe $285,000 on your $200,000 home. Further, your $285,000 mortgage cost with the extra point costs you $2,600 per month, consisting of $2,470 per month in interest that first year, yielding a $741 per month in tax savings. Bottom line, you flipped, you now owe more than the house is worth and therefore can't sell, and you have $741 per month less to pay for it. Class, can you spell f-o-r-e-c-l-o-s-u-r-e? I knew you could. So the bank gets the house, flips it at fair-market value to a cash holding future slum lord (good-bye middle class, hello rentier class), and you still owe them $85,000 from which it is now exceedingly hard, given the new bankruptcy laws, to walk away from.

(Alternately, the banks might keep the property as a rental until there's some future strength in the market, making substantially more from the process than if no foreclosure took place. This is the case in the Great Depression of the thirties -- much land was snapped up for pennies on the dollar and sold at a profit when the market returned. The Bush family understands this well, as I understand it Prescott made much in this manner.)

And to rub it all in, the USG -- our f*cking so-called representatives -- would transfer our equity from us to the already rich, increase our taxes by broadening the base upon which our tax rates are applied, and they do all this under the Orwellian rubric of "Tax Simplification"! Thieves, all! Immoral cads! Fit for prison orange, waterboards, and a long tour of duty in the sunny wire cages of Guantanamo.

[roguevalley]

56. fuckers. if they do that, I am dead.

[The_Casual_Observer]

59. What really begins to happen is that people simply stop paying taxes.

They drop out of the system.

[slackmaster]

61. A word of caution - An acquaintence of mine who did that died recently

By being out of the system he was unable to get medical care, and died at age 52 from multiple causes most of which were treatable.

[prolesunited]

62. And how exactly do you

just stop paying taxes?

[pitohui]

98. homeowners can't stop paying taxes

the claim is ridiculous, they know where you live!

[denverbill]

63. I'm still waiting to see this posted at Freeperville.

I'd really love to see their reaction.

[redqueen]

73. It's still not there? This came out yesterday...

hmmm... maybe someone did post it and it was deleted.

:shrug:

[denverbill]

88. Still not there.

You may be right about them deleting it. This is the kind of article that turns a die-hard Bushbot into a Bush-hating liberal overnight:)

[redqueen]

90. Sad that they're so afraid of this kind of thing.

If they'd quit sticking their heads in the sand, maybe their party would become less authoritarian.

http://www.boston.com/news/globe/editorial_opinion/oped/articles/2006/07/14/triumph_of_the_authoritarians?mode=PF

[benEzra]

64. That's rucking fidiculous. (n/t)

[leesa]

65. So will the Republican deadheads get it YET?

This will fully destroy the middle class. Mission accomplished. Thanks Joe Sixpack!

[agio]

68. wait and see

If they really are lowering taxes at the same time they are getting rid of deductions, it might not be as terrible as it appears.

But, given the attitude of this government toward the little guy...

[FormerDem06]

70. Panel Members are

US Senator John Breaux Dem-LA
Connie Mack III Repub
William Eldridge Bill Frenzel Repub
Elizabeth Garrett Dem-- Former Tax Advisor to Ok. Senator David Boren a Yale Graduate and Skull and Bones Member
Edward P. Lazear Repub -- Hoover Institute Fellow
Timothy J. Muris Repub -- former FTC head
James Michael Poterba -- Dem Professor at MIT who does a lot of studies on Tax and the Rich
Charles O. Rossotti -- Dem Former Clinton appointee at the IRS, but now he's working at the Carlyle Group
Liz Ann Sonders -- Repub Cheif Investment Strategist Charles Schwab


==================================================

Most of these people are rich, and they are all interconnected. Harvard, Yale, etc. etc. While we are all wasting our breath screaming about Democrats and Republicans the RICH are slowly slamming the door on us, one at a time.

[slackmaster]

71. Good point and Welcome to DU!

Most Republicans are middle-class homeowners who would be hurt by loss of the mortage interest deduction.

[redqueen]

76. They vote against their self-interest all the time.

Just say 'gays will get married!' or 'mexicans will take your jobs!' or 'the boogeyman will get you!'... et voila.

[slackmaster]

78. Not when it hits them personally and directly in the wallet

Same applies to Democrats.

[redqueen]

79. Oh yes they do.

Why are property taxes rising so fast?

[slackmaster]

84. I live in California, where property taxes are fixed by Proposition 13

And I predict other states will be seeing similar tax controls if the present trends continue.

:-)

[redqueen]

86. So you're an exception...

but do you see the point I was trying to make?

[slackmaster]

87. Yes, but I don't completely agree with it

If you push people hard enough sooner or later they fight back.

[redqueen]

89. So maybe when they're homeless, they'll start paying attention. n/t

[redqueen]

74. There is no way to elect the "poor". So... how are we wasting time?

The rich OWN the GOPrano party... lock, stock, and barrel.

The DLC (the neo-lib corporatist wing of the Dem party) are losing control of this party as we speak.

[FreeStateDemocrat]

75. Working class is being screwed by corporate control of both parties.

A corporate controlled Democratic congress will only be the lesser of two evils to working class Americans.

[JerseygirlCT]

94. The Dems ought to tie this to the minimum wage issue

and run with it.

How many people have depended on those deductions? Made huge financial decisions based on those deductions? This has the potential to affect huge numbers of Americans.

Money stuff hits home like no other stuff does. We should hit them with this and watch them squirm.

[yellowcanine]

95. That would create a helluva mess. People have planned their finances

based on the mortgage deduction. Take away that and some peopla are not going to be able to afford to stay in their current houses. The dipshit Republicans are always screaming about having a stable tax and regulatory environment so that businesses can plan ahead. Seems they don't care if they screw up the finances of the "ownership society."

[mmonk]

97. Great plan to collapse

what's left of the American economy.