The GOPs have left the MID out of their recent party platform. It looks to be toast within the next ten years, probably much sooner. So . . . does this hurt the housing market? Most likely victims are existing homeowners and mortgage payers, even if they get grandfathered, because incremental buyer is no longer subsidized.
OTOH, the MID doesn't make a difference for the new buyer. The price of the house stays the same, just shifted from taxes to principal or vice versa. Housing is different than other markets. Tax holiday does not drive up price of school supplies, but MID does drive up house prices.
I saw a study that reducing the capital gains tax on housing helped existing homeowners, but did not help new buyers. All it did was drive up the price of new homes, negating the tax benefits. I think eliminating MID will work the other way, hurting existing homeowners (where grandfathered or not) and neutral for new buyers and renters.
I think it would. Most working class people need that extra money from their tax refund to pay their property taxes. I think that would be good for investing. The money that could be made on buying tax notes at auction is real good. Where else can you invest 1k and have the realistic potential to make 50k .
The GOP is working hard to get rid of dividend taxes and capital gains. I really hope they succeed soon because I could use it. The only thorn in their side is we really need to cut out all programs like Social Security, Medicare, Mortgage Tax Deduction, Education Grants and just about every other socialist program letting the poor leach off the successful.
We need to stop rewarding the lazy and poor and let those who actually count keep more of our income
MID really only helps people who itemize, only the wealthy itemize, and so only the wealthy benefit. If we figure marginal tax rate of 33%, $3000 monthly interest, eliminating MID would result in $1000/month higher taxes. That would be a significant hit at the top end of the housing market.
Some form of alternative minimum tax is probably a better strategy. Politically it is easier too.
If cancelling MID will be offset by reducing tax rates, then it is more likely not to affect housing too much. If it is strait cancelling of MID, then housing is very likely to crash.
