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CBO - Ryan Plan will cost seniors $6000+/year

Underrated said:
Lol
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Remind me again what the core problem of the recession was?

Oh yeah, real estate....

R$eal estate is about 15-20% of economy. If everybody who owns a house would lose 25-35% of the value of their homes overnight, what do you think would happen?
 
Ok RJ here goes, real estate values are distorted and inflated because of the ridiculous tax giveaway which is the mortgage interest deduction. The NAR is one of the most powerful lobbies in DC.

You say "Remind me again what the core problem of the recession was? Oh yeah real estate" Pretty cute. There were many factors involved and this oversimplistic joke of an analysis makes me laugh. Yes the loss of this giveaway to powerful lobbyist interest will make real estate prices drop (nowhere close to what you said) and justifiably so. There will be pain for everyone as this ponzi starts to unravel. Major cuts are in your future in more ways than you can even imagine. I look forward to seeing your reaction to the way things play out with the insolvency of the federal and state governments in the next decade.
 
I agree prices are distorted, but you can't bring them back to reality in a way that harm the economy so dramatically.

Complex problems with as many tentacles as this one has cannot be fixed by a single simplisitc answer.
 
Rich people get the most of the interest deduction. On a home worth 140k a taxpayer may save around 1700 a year(IF they itemize deductions many don't and just take the standard deduction) a person with a million dollar loan saves 21,000. Half of the benefit is taken by only 12% of taxpayers re those who earn over 100k per year. I'm really surprised you(RJKARL) would be in favor of the status quo here.
 
Let's assume this is correct. The average price for a home today is over $200K. That would move the amount up to about $2500 or a $210/month. This would take off about $35-40,000 in equity.

Im today's economy that would people underwater for years to come.
 
The average price today is 187k not 200k. You should take the time to read the link I sent you, lower priced homes would not fall very much because so many people take the standard deduction. It's the higher priced homes that would drop 10-15%. The rich would suffer the most, they can afford it right. Don't worry, the politicians won't make tough decisions to put us on a sustainable course. Nobody wants to deal with the pain that is necessary. They will continue to kick the can until the shit completely collapses. The left will blame the right and vice versa.
 
I did read the article. But I disagree with your premise that this won't hurt the lower end. They can afford to lose less and it will be harder to qualify for the first loan.
 
How is it harder to qualify? The bank isn't taking into account projected tax deductions on a house you haven't purchased yet when evaluating the loan. As noted above, most folks at the lower end don't itemize their deductions, so this would have zero impact on them. As to those that do, it really only affects those that have cut their payments so close that they probably shouldn't be buying that house anyway if they are budgeting their ultimate decisions based off of a tax deduction.
 
Johnny Utah said:
How is it harder to qualify? The bank isn't taking into account projected tax deductions on a house you haven't purchased yet when evaluating the loan. As noted above, most folks at the lower end don't itemize their deductions, so this would have zero impact on them. As to those that do, it really only affects those that have cut their payments so close that they probably shouldn't be buying that house anyway if they are budgeting their ultimate decisions based off of a tax deduction.
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If you cut the payments you cut how much you pay for the house.
 
Well somebody's going to have to get screwed in order for our debt situation to improve and of all the options, this one makes the most sense. Easy to inact. Take it off the books for new home buyers and phase it out over the next 5 years for current homeowners. It doesn't punish the poor and benefit the rich. The people who are "screwed" can easily afford it. It deflates the bubble that helped get us in this mess. It could lead to more efficient spending on the micro level. Instead of spending on a mortgage (essentially rent + interest), more people may rent and spread spending out throughout the rest of the economy on goods and services at current market value.

Several good reasons to rid of it.
 
PhDeac said:
Well somebody's going to have to get screwed in order for our debt situation to improve and of all the options, this one makes the most sense. Easy to inact. Take it off the books for new home buyers and phase it out over the next 5 years for current homeowners. It doesn't punish the poor and benefit the rich. The people who are "screwed" can easily afford it. It deflates the bubble that helped get us in this mess. It could lead to more efficient spending on the micro level. Instead of spending on a mortgage (essentially rent + interest), more people may rent and spread spending out throughout the rest of the economy on goods and services at current market value.

Several good reasons to rid of it.
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Also, isn't the saving rate up quite a bit recently? It MAY be that doing away with policies that over-inflate value on objects will be a good thing for the American psyche.

Can't afford it? Don't buy it.
Seem to good to be true? Then don't believe it.
Work hard, save, and then buy within your means? Yes, sounds like a great idea.
Want to be wealthy and live the high life? Great! Invent something, take some risk and work your ass off until it succeeds, get some education in something people need.
 
WhatUTalkinBout Willis said:
totally disagree on completely screwing our economy. I'd like to have that explained.
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About 20% of our economy is based on real estate. Doing this would kill the RE market for several years to come.

Even more people would be upside down in their homes. People use their equity for everything from paying bills to college tuition to using as collateral to start a business or guarantee a business loan.

It will cost jobs on many, many levels. Everyone from tim ber to truck driveers to bankers and even at Home Depot will be at risk.
 
Good point about the savings rate. Seems like the banks don't take that much of a hit if would be homeowners instead of paying a mortgage are paying rent and saving cash.
 
Savings rates are up a bit, and it's pissing the Fed off. They want that money out in the market being invested.

Consumer debt is dropping steadily as well.
 
Liquid Karma said:
Savings rates are up a bit, and it's pissing the Fed off. They want that money out in the market being invested.

Consumer debt is dropping steadily as well.
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A change in the corporate tax rate could stimulate US investment. Lots of focus on the consumer-side of things, including talking about individual income tax rates. Yet, boggles my mind that the corporate tax rate gets short shrift - at a statutory rate of 35 percent, one of the highest in the world. As a result, $1 trillion sits offshore b/c it is not economically prudent to repatriate to the US at existing tax rates... so the money that should be invested in the US economy gets put into building plants in tax havens or simply sitting offshore.

Combine this with the foreign tax credit and you get companies not repatriating earnings PLUS effectively paying zero taxes (ahem, GE). Anyway, kind of off-topic a bit, but my $0.02.
 
The rates aren't the problem, it is indeed the deductions and credits. The wealthiest have the best tax prep and counsel and take advantage of these. Lowing rates, while eliminating most deductions would increase revenue, which is only part of the way to tame the deficit. If you are panicked about the home interest deduction, phase it out by means testing and reducing the amount that can be claimed each year over the next ten to twenty years. This would lessen any shock.

The second issue is controlling spending, which can only be done through entitlement reform. Younger people are going to have to realize that they will get less benefits at a later time becuase there is no money. Discretionary and defense spending will also need cuts, but that is where the real savings are.

If you actually get on a plan that reduces the debt, not merely the deficit, you can use the interest savings to increase benefits or programs at a later date.

This is the single largest problem facing this country and it is getting exponentially worse.

And no Ph, the altar of Maddow comment had nothing to do with you.
 
Younger people already realize we're going to get less at a later time. We're not the ones holding things up.

I have some ideas about the corporate tax rate, but it's clear we're doing something wrong. Many individuals fill out their taxes to find out how much they've overpaid the government. Corporations just aren't paying taxes at all.
 
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