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[Future]

That still means only the wealthy are buying houses >$500k. They don't need government subsidy.

Tell that to people that actually do it though and see what they say. Without that subsidy, many more people would potentially lose their homes, or be unable to purchase at all, leaving home buying to the truly wealthy in some areas

If you live in a major expensive city, you are paying close to 500k for a basic home. You probably seem rich to those that live in other areas, but in that area you have greater expense for practically everything: food, gas, real estate, etc.

These solutions are tough because they never take into account different cost of living per state.

 

[antonz]

The entire state of CA needs to be building less single-family homes. The interest deduction's incentives are part of the problem.

California's problem is they lack development in general. This has been a multi-decade issue that they have been trying to address since the late 60s.

Too many cities and communities passed laws that restrict development. In 2006 one of the laws set a target of 1.5 million homes built in 8 years. When 2014 came along less than half of that number was actually built across the state.

If you are a property owner the housing crisis is your best friend and the last thing you want is to see it addressed.

 

[Earthbound64]

The amount of people against this because "It'll affect me" / "I want mine" is interesting.

 

[Stinkles]

Yeah, isn't this one of those economists think would be beneficial to get rid off in the long term, but is very popular and touching it is the political equivalent shoving your head down a meat grinder?

Yup

 

[tokkun]

A 1 bedroom apartment in my non-major city is over 500k.

It's not a wealthy person thing. I have been toying with the idea of eventually buying a home, but I'll need a mortgage loan of 720k for a 3bedroom single family home. I am not wealthy.

I'm also not interested in leaving because I'm a minority and this city is one of the few cities where there's a plurality of other minorities like me. My children won't have to deal with everyday microaggressions and racism if I stay here.

Under this plan, you would still get to deduct interest on the first $500K, getting a massive government subsidy not available to people of average means who cannot afford such expensive homes.

That's not good enough? We need more wealth transfer from lower income people to subsidize the remaining $220K too?

The amount of people against this because "It'll affect me" / "I want mine" is interesting.

This is every tax-related topic on GAF. Raise taxes to solve problem X, as long as I don't have to pay a penny more.

 

[Nipo]

What will kill this proposal is the number of boomers with homes valued over 500k. They know they're going to sell soon and they know the value of their primary retirement investment will be significantly hurt if buyers can't deduct interest with rising rates. Expect to see numbers from NAR and AARP how much this will hurt your home value and retirement nest egg if a serious proposal makes it to the floor.

 

[Earthbound64]

This is every tax-related topic on GAF. Raise taxes to solve problem X, as long as I don't have to pay a penny more.

You're probably right. It's just strange seeing a topic which specifically would impact "people with more money" (to avoid the whole "who is in what class" thing) to the advantage of "people with less money" getting such pushback.

 

[pigeon]

You're probably right. It's just strange seeing a topic which specifically would impact "people with more money" (to avoid the whole "who is in what class" thing) to the advantage of "people with less money" getting such pushback.

Lots of people on GAF are middle class. That's why they can afford to talk about politics on a video game message board all day.

 

[sflufan]

This is one of the few issues that economists from both the right and the left march in lockstep on.

 

[The Chosen One]

Can they focus on the absolutely stupid skyrocketing house prices on the West coast first, please?

Speaking as a West coast homeowner, no please let the housing prices continue to skyrocket. My home value is almost at pre-financial crisis levels. I better sell soon...

 

[The Greek Freak]

Fuck it lower it down to 200k.

 

[Moral Panic]

http://www.cracked.com/blog/6-things-rich-people-need-to-stop-saying/

And here we see the fundamental dishonest characteristic of each and every article which advances this particular enraging argument. "Sure, it's an objectively large sum of money," they say. "But it is far smaller after I spend it."

No shit.

Money pays for the costs of life. That is what money does. You can't fucking argue that, hey, your money doesn't go that far after you've already spent it. You used it! Paying taxes and paying bills and paying the mortgage and putting money in a retirement fund and going out to dinner are the things that money gets you. You asshole. Just because you didn't blow it all on jewelry, caviar, and cocaine doesn't mean you didn't get anything out of it. This argument is like a man eating a hearty meal, licking his plate clean, then turning to a starving person and saying, "Look, we're in the same boat. My plate is empty too!"

Can't write anything better so I'll just drop these quotes

 

[Icedburden]

500K doesn't buy much of a house in parts of this country.

Leave the mortgage interest deduction alone.

I live in Maryland, which is pretty damn expensive for living in the good parts, and bought a nice house for half that. Don't know where you are looking.

 

[Barzul]

This is actually needed especially if the individual deduction is boosted. It's just been politically toxic. And I'm willing to watch Trump expend how little political capital he has on this.

 

[shnurgleton]

Real estate mogul considers cutting the mortgage deduction? Is he high?

 

[PumpkinSpice]

A 1 bedroom apartment in my non-major city is over 500k.

It's not a wealthy person thing. I have been toying with the idea of eventually buying a home, but I'll need a mortgage loan of 720k for a 3bedroom single family home. I am not wealthy.

I'm also not interested in leaving because I'm a minority and this city is one of the few cities where there's a plurality of other minorities like me. My children won't have to deal with everyday microaggressions and racism if I stay here.

If you can even consider buying a 720k house, congrats you're rich. Sucks that your area has extremely poor planning and can't support anyone that is poor and seemingly middle class, but it doesn't mean you're not rich.

 

[ZealousD]

I know the knee jerk reaction to Trump news is to always assume the worst (and believe me, I get why) but there really is not much reason to have the mortgage interest deduction anymore. It's popular, but that doesn't mean it's good.

 

[Staccat0]

Put a bid on a house today. Place is dope as fuck and is less than 200k.

Like anything else, different areas have different economics.

 

[kmfdmpig]

If you can even consider buying a 720k house, congrats you're rich. Sucks that your area has extremely poor planning and can't support anyone that is poor and seemingly middle class, but it doesn't mean you're not rich.

Yup. You may not feel wealthy because you live in a high cost of living area, but anyone that can get approved for a mortgage of $720k is certainly above middle class.

I know the knee jerk reaction to Trump news is to always assume the worst (and believe me, I get why) but there really is not much reason to have the mortgage interest deduction anymore. It's popular, but that doesn't mean it's good.

Agreed. We had a thread about a year ago which was based on research indicating that unemployment would be much lower if people were not as tied to their homes (which mortgages often make us). Granted, for someone raising a family even if they rent it's not an easy thing to up and move cross country, but it could be more viable for a renter vs. someone who has a mortgage.

 

[FrenchMovieTheme]

There are a lot of tax breaks we should get rid of. I might be on board with this if it wasn't trump. I expect somehow this gets funneled to the super rich

PS

Off topic but renting fucking sucks dick. I was paying around as much for an apartment, in which I had no yard and had to live with shitbags above me, as I am a house. Someday my house will be paid off and I will no longer have a mortgage. But I'd always have rent cost.

 

[numble]

The current MID encourages the building of single family dwellings which is the least effective allocation of space in those cities. They need to go up ala NY, Singapore, and Hong Kong. This applies in particular to SF with its nightmare geographical limitations. But it's all about the "got mine, fuck you" attitude in those cities.

The MID can still be used for a high rise condo. It doesn't encourage or discourage building types.

 

[ezrarh]

This is actually needed especially if the individual deduction is boosted. It's just been politically toxic. And I'm willing to watch Trump expend how little political capital he has on this.

The MID helps me quite a bit but in all reality, I don't think it's fair for it to exist. It's extremely unfair to renters and generally is only good for middle class and upper middle class households.

 

[Giant Panda]

The interest deduction incentives promote home ownership. Slashing this deduction would cause a massive recession in CA, the Northeast Corridor, NY.

The median home price in CA is over $500k. SF is over $1 mil, San Jose is over $800k, LA/OC/SD well over $500k.

https://www.zillow.com/ca/home-values/

Just out of curiosity, which state do you live in?

Why should the government subsidize Californians more than residents of other states? That's how you end up with people living in places where it doesn't make economic sense for them to be living.

 

[Pagusas]

Don't you dare touch my mortgage tax deduction -_-

 

[DietRob]

He doesnt actually have the balls to do this. Does he?!?!? If anything makes his base turn on him this is it.

This administration is giving so much ammo to the DCCC even if he doesn't go through with it just him having these discussions.

If Democrats don't see huge gains in the house and Senate in 2018 then we can properly lose all faith

 

[outunderthestars]

I am ok with this.

 

[whytemyke]

The amount of people against this because "It'll affect me" / "I want mine" is interesting.

It's the same with any tax cut. Just ask a random person about the estate tax. Reminds me of a line from the West Wing: the problem with the American dream is everyone thinks they're going to be rich one day

 

[Marty Chinn]

If you can even consider buying a 720k house, congrats you're rich. Sucks that your area has extremely poor planning and can't support anyone that is poor and seemingly middle class, but it doesn't mean you're not rich.

I disagree. Cost of living directly impacts whether you're considered rich or not. If you don't factor that in, you can easily say everyone in the US is rich because they make significantly more money than other places in the world. Rich is relative and cost of living makes a big difference on how relative it is.

 

[Randolph Freelander]

I live in Maryland, which is pretty damn expensive for living in the good parts, and bought a nice house for half that. Don't know where you are looking.

It's not about me. I live in a townhouse valued at $180K in Charlotte, NC, which is just below the median home price for this city. The median home price in the United States is not much higher at 188K, according to a quick google search. However, the median home price in California is 500K. You get into some specific metropolitan areas, and it could be much higher.

I'm not thinking about me. My post is about other people buying average homes and paying out the nose for it because that's just the reality of where they live.

 

[Amibguous Cad]

It's not about me. I live in a townhouse valued at $180K in Charlotte, NC, which is just below the median home price for this city. The median home price in the United States is not much higher at 188K, according to a quick google search. However, the median home price in California is 500K. You get into some specific metropolitan areas, and it could be much higher.

I'm not thinking about me. My post is about other people buying average homes and paying out the nose for it because that's just the reality of where they live.

Yeah, but they get to live in California.

If they don't value living in California, they're welcome to sell their 500k house and move to a place that isn't as vibrant economically, culturally, and doesn't have amazing weather. If they haven't done so yet, it's because they're getting what they're paying for with their massive mortgage.

 

[Nipo]

Yeah, but they get to live in California.

If they don't value living in California, they're welcome to sell their 500k house and move to a place that isn't as vibrant economically, culturally, and doesn't have amazing weather. If they haven't done so yet, it's because they're getting what they're paying for with their massive mortgage.

Massive mortgages they can afford because of the interest deduction. Take that away and they might not be able to. So assume they grandfathers in current mortgages. In that cases home value will stagnant or drop. You could end up with people being unable to sell because the sale won't cover what they own and buyers can't pay more because higher rates and non deductible interest. So everyone is stuck and housing ends up rented on airbnb.

 

[digdug2k]

this is fine, lol. buy a house you can afford damn.

*to clarify, I would be pissed if I had 500k-1000k in mortgage debt, but also, that would mean that I'm living in a half million dollar home at least, so maybe I don't have that much to complain about?

If this is just to fund more tax cuts for the wealthy in other ways then fuck that though.

If you live in a city, a half million dollar home would be shit. But welcome to the world where we try to pretend living in sf is the same as living in nowhere Tennessee (except during the elections, when we admit the tn guy is worth more than the sf one).

 

[Clockwork]

http://www.cracked.com/blog/6-things-rich-people-need-to-stop-saying/



Can't write anything better so I'll just drop these quotes

Pretty much this.

"I'm not rich because $500,000 will only buy a shitty house where I live."

Sure buddy, but you still make the income to support that purchase. There is a large portion of middle class America that isn't going to be able to afford that regardless of where they are located.

You aren't going to fool me that some family in Wisconsin who scrapes by in WI with a $200,000-$300,000 mortgage is all of a sudden going to afford a $500,000 mortgage or more due to regional salary differences and cost of living structures.

Just because you have greater expenses doesn't take away that you have that money to spend in the first place.

 

[ScottSullivan]

There are a lot of tax breaks we should get rid of. I might be on board with this if it wasn't trump. I expect somehow this gets funneled to the super rich

PS

Off topic but renting fucking sucks dick. I was paying around as much for an apartment, in which I had no yard and had to live with shitbags above me, as I am a house. Someday my house will be paid off and I will no longer have a mortgage. But I'd always have rent cost.

My man! First time homeowner about 5 months now, it's definitely a little more expensive and having to do all my own maintinence is a big adjustment, but it's definitely worth it. I never feel like my monthly payment is a waste anymore

 

[Hasphat'sAnts]

Looking at Zillow listings in the Bay Area makes me cry.

 

[Megatron]

Exactly. I have a mortgage and I'm in favor of losing this deduction.

Well same here, but my mortgage is under $500,000.

 

[Keri]

I can see this hurting middle class families in the more expensive states, who may count on that tax deduction. But, at the same time, as a non-home owner who lives in an expensive area...I have to say I like any idea that could potentially bring down housing prices. Also, even though it may injure some middle class families now, it does seem like it could be worth it in the long term. Something has to be done in some of these more expensive areas.

 

[aeolist]

this would be great. not only is it good policy but it would make lots of republicans super mad at trump.

 

[Marty Chinn]

Pretty much this.

"I'm not rich because $500,000 will only buy a shitty house where I live."

Sure buddy, but you still make the income to support that purchase. There is a large portion of middle class America that isn't going to be able to afford that regardless of where they are located.

You aren't going to fool me that some family in Wisconsin who scrapes by in WI with a $200,000-$300,000 mortgage is all of a sudden going to afford a $500,000 mortgage or more due to regional salary differences and cost of living structures.

Just because you have greater expenses doesn't take away that you have that money to spend in the first place.

No, it's exactly that. Cost of living offsets increased income. If you make more some place else and it only makes up for the dramatic increase in price, then you're still at the same purchasing power as someone else who lives in a cheaper area. How can you claim the person is rich when the cost of living is higher and the higher wage compensates for that? You're getting at best as good, and most likely worse house than someone else for significantly more. If you move, your wage goes down which offsets the cheaper cost of living. Unless you want to make the argument that everyone in the US rich because people in the US make way more than people in other countries because that's what you're arguing if you want to ignore the effects of the cost of living that offsets the higher wage.

 

[Weevilone]

That still means only the wealthy are buying houses >$500k. They don't need government subsidy.

I'd hardly call letting a family keep more of the money they earned a "government subsidy". That's right up there with reducing a planned tax increase by 20% and calling it a tax cut.

No, it's exactly that. Cost of living offsets increased income. If you make more some place else and it only makes up for the dramatic increase in price, then you're still at the same purchasing power as someone else who lives in a cheaper area. How can you claim the person is rich when the cost of living is higher and the higher wage compensates for that? You're getting at best as good, and most likely worse house than someone else for significantly more. If you move, your wage goes down which offsets the cheaper cost of living. Unless you want to make the argument that everyone in the US rich because people in the US make way more than people in other countries because that's what you're arguing if you want to ignore the effects of the cost of living that offsets the higher wage.

I usually think you're on point, but not with this one. Consider that your cost of living in the Bay Area (or wherever) is buying you quality of life. It's tough to live in flyover territory and feel bad for someone waking up in a beautiful area with a fantastic climate and tons of cool stuff to do right on your doorstep. The whole rich or not rich thing is nonsense, but I think it's important to realize that that expensive cost of living is more than a simple wash with the higher income.

 

[TAJ]

Nvm

 

[Marty Chinn]

I usually think you're on point, but not with this one. Consider that your cost of living in the Bay Area (or wherever) is buying you quality of life. It's tough to live in flyover territory and feel bad for someone waking up in a beautiful area with a fantastic climate and tons of cool stuff to do right on your doorstep. The whole rich or not rich thing is nonsense, but I think it's important to realize that that expensive cost of living is more than a simple wash with the higher income.

I think in general, what I'm saying is true because if you look outside the Bay Area, like maybe Seattle, or Austin the climate isn't as nice as some other areas that have better weather and cheaper cost of living. I know that's only one aspect of quality of life, but I don't necessarily think quality of life dictates cost of living. Certainly, the Bay Area feels more of a perfect storm but I feel that's more of the exception when you look at other major areas. I know I simplified it a bit by saying it was a wash, but I really do think people don't realize the difference in the cost of living and just equate people to being rich because it sounds like a lot of money to them for the area that they live in, and not the area that the money comes with.