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.
There's some evidence that measures like that are likely to have a significant effect. See this story about house prices in Netherlands, for example: http://www.bloomberg.com/news/2012-...es-dropped-the-most-on-record-last-month.html
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 50kâ¦. 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⦠I sure hope Mitt Romney wins!
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.
Actually MID is deducted from your income level. For example: W2 Income of 100K Deduct Interest Paid on Mortgage 30k Deduct Expenses (job and health related) 10k Taxable Income = 60k You need to remember that most American home owners who are employees use their tax return to pay their property taxes at the end of the year. Getting rid of the tax deduction would wipe a lot of home owners. If they don't pay their property taxes then that note goes to auction. Kachingo! LOL I could not resist in adding the video... <iframe width="420" height="315" src="http://www.youtube.com/embed/VLPdUJe5e4s" frameborder="0" allowfullscreen></iframe>
I don't see how they could possibly get rid of the mortgage deduction for homes under $1mm. Either party would get hammered politically if that were to happen, unless there was an offset in rates elsewhere.
You have no idea what you wishing for. Cancel all these programs, and you will have constant riots across US, with a possibility of revolution in some future point of time. You do know, that guns are legal in our country, do you? This situation will sure help in rewarding productive members of our society, who will be afraid to step outside of their heavily guarded and fenced off communities. You really want to live in such county??????
The GOP is trying to eliminate the Dividend Tax and Capital Gain Tax. This has nothing to do with W2 Employees or 1099 Contractor. The GOP would lower the taxes on traders, investors and those who are retired who receive more then 25k a year (under 25k is tax free) from their investments. The only down side is that the money saved needs to come from somewhere. Most likely Social Security, Medicare, Education Grants and hopefully the pensions of lazy state and government workers. I would like to see it come from defense spending but there are to many hands in that pot that count! G
It will just take time and people will adapt. They always do! If you went back in time 8 years and told everyone what has happened now they would say the "the people would not allow it"! Here we are now and everyone is adapting just fine. As for guns most Americans would not dare use them. The few that would will pay the price. I don't think our government would let the poor get to well organized. Look at occupy Wall St. What happened there? Besides that, if our National Guard got brought in no group of citizens would stand a chance. Problem solved! It only takes time and money to change public opinions in order to work these cuts in. Yeah there will be some unhappy people but they will have to learn to get a job or career like the rest of us!!!!