Republicans are a stupid bunch.

Quote from Tsing Tao:

i know you continue to do your best to twist the argument as best you can to justify the dumbass statements youve made throughout this thread (starting with the hilarity regarding the IRS getting $10 on every dollar increased in their budget) but you need to fathom a bit deeper.

removing the interest deduction wouldn't just make houses cheaper. it would make them completely collapse. including you who purchased a house in cash - your house price would plummet and you would lose your capital investment in a much greater fashion than any "artificial inflation of price" caused by the interest deduction.

truly, a college course on macro economics might come in handy. i'm sure they have them in your area. give me your zip and i'll look up some good ones for you.

once again, for posterity: removal of the interest deduction "subsidy" would cause home values to plummet. you think they went down bad in the subprime crisis? you aint seen nuthin'. take that deduction away, and expect a full quarter more of downside, if not more. then how much cash have you lost?

come on, i know you can work your way through this complex issue. and you know, once we're done, we could even do some word problems!
More...

Removing the housing interest deduction could make housing prices go down, Maybe, then they would stabilize, that's it, simple.

Removing housing interest deductions (which would hurt me), remove farm subsidies, remove religious deductions would all be a good start.
Also would want to consider removing taxing corporations and tax all personal income as ordinary income. Would have to crunch the numbers on that.
 
Quote from bigarrow:

Removing the housing interest deduction could make housing prices go down, Maybe, then they would stabilize, that's it, simple.

Removing housing interest deductions (which would hurt me), remove farm subsidies, remove religious deductions would all be a good start.
Also would want to consider removing taxing corporations and tax all personal income as ordinary income. Would have to crunch the numbers on that.
More...

oh, sure it would eventually stabilize. after the market finds a new bottom that represents the concept of never buying a house again. think about it. if you take away interest deductions, and take away the concept that "real estate always gains in value" (which has already been done thanks to the previous crisis) why would you buy a property knowing it would only lose value, and you have to pay property taxes on it until the end of time (which go up over time as well)?

i sure as hell wouldn't want a house at that point or ever again.
 
Quote from Tsing Tao:

oh, sure it would eventually stabilize. after the market finds a new bottom that represents the concept of never buying a house again. think about it. if you take away interest deductions, and take away the concept that "real estate always gains in value" (which has already been done thanks to the previous crisis) why would you buy a property knowing it would only lose value, and you have to pay property taxes on it until the end of time (which go up over time as well)?

i sure as hell wouldn't want a house at that point or ever again.
More...

You make an excellent point. Let me add something here that many people don't think about. What the federal government is actually doing is not subsidizing homeowners, but rather subsidizing local governments. They incentivize buying property precisely so local governments can get the property taxes that pays for our schools.

If people rent instead of buy, the schools would go broke and counties would then have to find other ways to tax you to get your money. Since it's the actual property owners paying for the tax, not the renters, they get the tax break.

As for the incentive you get for paying cash instead of getting the interest deduction, you get to save thousands in interests costs over the life of the loan. So without creating incentives for buying homes, home prices would drop or not increase in value as much thereby forcing people to rent vs buy and thereby bankrupting local governments. Yeah, great idea.
 
Quote from Maverick74:

You make an excellent point. Let me add something here that many people don't think about. What the federal government is actually doing is not subsidizing homeowners, but rather subsidizing local governments. They incentivize buying property precisely so local governments can get the property taxes that pays for our schools.

If people rent instead of buy, the schools would go broke and counties would then have to find other ways to tax you to get your money. Since it's the actual property owners paying for the tax, not the renters, they get the tax break.

As for the incentive you get for paying cash instead of getting the interest deduction, you get to save thousands in interests costs over the life of the loan. So without creating incentives for buying homes, home prices would drop or not increase in value as much thereby forcing people to rent vs buy and thereby bankrupting local governments. Yeah, great idea.
More...

i didnt even get into the whole idea of property tax with tinkerbell, as he/she/it seems to get really confused when you bring multiple points of debate to the table. but you're 100% right.

another aspect of removing the interest deduction is local municipalities go broke.
 
I think supply and demand would work and the market would normalize sooner than you think and without as big of a hit on prices as you think.
But we won't know, the housing deduction is part of the holy grail and won't be touched.
 
Quote from Maverick74:

You make an excellent point. Let me add something here that many people don't think about. What the federal government is actually doing is not subsidizing homeowners, but rather subsidizing local governments. They incentivize buying property precisely so local governments can get the property taxes that pays for our schools.

If people rent instead of buy, the schools would go broke and counties would then have to find other ways to tax you to get your money. Since it's the actual property owners paying for the tax, not the renters, they get the tax break.

As for the incentive you get for paying cash instead of getting the interest deduction, you get to save thousands in interests costs over the life of the loan. So without creating incentives for buying homes, home prices would drop or not increase in value as much thereby forcing people to rent vs buy and thereby bankrupting local governments. Yeah, great idea.
More...

That is true only as far as the tax breaks keep property values high, which I think are over estimated. People living in houses as owners or renters has no bearing on the property tax collected, that is determined by the property value.
 
Quote from bigarrow:

That is true only as far as the tax breaks keep property values high, which I think are over estimated. People living in houses as owners or renters has no bearing on the property tax collected, that is determined by the property value.
More...

We absolutely categorically know that anything we subsidize creates inflation with the underlying price. This is not up for discussion. Examples include sugar, ethanol, education, food, college, etc. Remove the subsidies and prices drop. Economic fact. How much would they drop? We could have a discussion about that but it's outside the point. The government knows exactly what it's doing when it comes to subsidies and we sure as hell have a lot of practice with it.
 
Quote from bigarrow:

"How much would they drop? We could have a discussion about that but it's outside the point."
???

That was my point.
More...

But you don't understand. Municipalities need growth, not stagnation. Because like our federal and state governments, they spend more and more every year, the taxes they collect from property also has to grow every year. When those taxes stop growing, you get deficits which is what is happening now.

Because property values over the last few years tanked, municipalities are now going broke. So "my point" was it doesn't matter how much they decline, just that they will decline or not grow. Government needs to grow it's tax base, not shrink it. Why? Because every year they spend more then the previous year.
 
You must log in or register to reply here.
Back
Top