Tax reform should also include the mortgage deduction. Great at the time to stimulate housing sales however nothing but another reason to eliminate tax deductions.
Typical Republican nonsense. Let me guess, it was great at the time YOU got to benefit from it, but now that YOU don’t need it no one else should get the same benefit that YOU had. Tell me when I get something wrong.
When you can get the fed to quite jacking with asset prices then the cost of a home will drop far more than the mortgage interest deduction… The price of homes was inflated by fed easy money all the way from Clinton to the bubble burst in 2008 and then when home prices should have actually dropped back to a ‘normal’ price… here comes the Fed to prop up the housing market…
Funny how folks complain about people scouring the tax code for deductions and when the do, they are tax dodgers but… for themselves… not so much… Seems to that if you are well off enough to have a mortgage… you should help out the little guy too… No?
Hmmm- unabashedly liberal sites proclaiming each group pays its fair share (so why are the libs complaining so much?. Here is something from the Pew Research folks on this issue; somehow it doesn’t quite jive with the jive from the cbpp folk…
"In 2014, people with adjusted gross income, or AGI, above $250,000 paid just over half (51.6%) of all individual income taxes, though they accounted for only 2.7% of all returns filed, according to our analysis of preliminary IRS data. Their average tax rate (total taxes paid divided by cumulative AGI) was 25.7%. By contrast, people with incomes of less than $50,000 accounted for 62.3% of all individual returns filed, but they paid just 5.7% of total taxes. Their average tax rate was 4.3%."
Since you like graphics (and who doesn’t) here’s one from the article.
As to the issue of various other ‘regressive’ taxes like sales tax, sin taxes, etc, if a rich mid life crisis guy pays 200K for an Audi R8, he pays about 17,000 in sales tax in either CA or NV,and nothing in ultra liberal Oregon. The same situation with any purchase, from a car to a boat to plane- you name it.
The point is, those with higher incomes buy things that generate more sales tax, BUT - many of those high earners spend less as a percentage of their income because they are steeped in the sin of saving money in case they lose their cool job, or their business goes belly up.
The poor on the other hand live handout to hand-mouth, to liquor store to Wal- Mart to the sofa in front of the 48" TV to X-box, to more hand to mouth to…
The poor, by and large do not do little to improve their lot in life; there is a fatalism among the poor that the Democrats manipulate. By claiming that a lack of effort is really the fault of greedy Republicans who aren’t giving them more than the equivalent of 30-40,000 per year to lay around brooding and breeding, they are somehow being oppressed by evil capitalism.
Wow what a hypocrite.
You claim that the mortgage deduction is fair even those that are wealthy benefit most yet claim progressive taxes are fair.
I believe you just don’t want to lose a deduction on your income tax and don’t care if others get a bigger deduction.
Another example of money fleeing taxes:
Even after watching Hurricane Irma wreak havoc on Florida, Rik Mallin is sticking to his plan.
Mallin is fixing up his Villa Park home so that he can sell it, move to the Florida Panhandle and escape Illinois’ rising taxes.
“I’m getting out,” said Mallin, 67. “It’s not just the property taxes on my home; it’s all of them.” He figures his taxes in Florida, where there is no personal income tax, will be about a quarter of what he’s paying now.
Mallin’s not the only one leaving the state. In 2016, Illinois lost 37,508 people, putting the state’s population at its lowest level in nearly a decade, according to U.S. census data. It was the third consecutive year the state lost more residents than any other state. The state’s population count for 2017 won’t be released until December.
Some of those who are leaving Illinois say they’re frustrated with their tax burden and the state’s financial situation. After going more than two years without a budget, Illinois lawmakers passed a spending plan over the summer, one that involved a 32 percent income tax hike for residents. The state is still digging itself out of the financial disarray that accumulated during the budget impasse. A Forbes listing of the best and worst states for taxes in 2016, before the tax hike, ranked Illinois 46th, signifying a heavier tax burden.
But demographers aren’t ready to chalk the outmigration up to tax pressures entirely.
Chicago area leads U.S. in population loss, sees drop for 2nd year in a row
Brookings Institution demographer William Frey said that when people move, it’s usually for employment, and not necessarily because of taxes. Most of the people moving are in their 20s and 30s, are establishing themselves in careers, and are relocating for job opportunities.
“When you have more people moving out than in, it means the employment is somewhere else,” Frey said.
Regardless of whether or not they are the primary factor behind relocations, high tax rates still affect the housing market by cutting into the amount of money residents have to spend.
Lance Ramella, president of Housing Trends, a Chicago-based housing market consultant, said weak growth in the Chicago economy, unresolved government fiscal issues and high taxes are all tied together, and are resulting in a “stagnant” housing market.
“Entry-level buyers shop based on what they can afford monthly,” Ramella said.
Ultimately, if those shopping for homes can’t afford the mortgage payments plus taxes, they’ll settle for lower-priced residences. They may even skip buying a home altogether if there aren’t enough affordable homes on the market. This could cause a deterioration in housing prices, he said.
Chicago property tax bills going up 10 percent this year
Housing construction already is being affected, he said. With construction costs high and demand muted, only 7,511 single-family homes were built in the Chicago metro area during the 12 months ending with July.
Before the recession, 40,000 new homes were being constructed each year. Normal demand is closer to 15,000 to 20,000 new homes a year, Ramella said.
“We really need stability in our government, and I don’t know how that’s going to happen,” he said.
Ramella contrasted most of the Chicago metro area with Lake County, Ind., which has experienced heavy housing growth that Ramella attributes to a flight from Illinois taxes. Housing construction in northwest Indiana increased 18 percent this year over last, and in 2016 the number was up 19 percent over 2015. Meanwhile, Cook County is down 6 percent this year over last, and home construction in many other Illinois counties is flat, he said. DuPage County experienced an upturn of 5.9 percent this year.
Sheila Tracy, a Chicago optician, said the recent income tax hike as well as the sweetened beverage tax implemented by Cook County in August both seem like desperate governmental attempts to deal with unresolved financial problems.
“It was the last straw,” said Tracy, who plans to relocate away from the state once she retires in three years. “They say the soda tax is about my health, but they aren’t fooling people.”
Cook County’s commissioners are expected to vote on repealing the sweetened beverage tax Oct. 10, though it’s unclear at this point if there are enough votes to overturn the measure.
Even though it’s difficult to determine how much of an impact tax concerns are having on real estate, the weakness in the local housing market is clear, said Geoff Smith, executive director of the Institute for Housing Studies at DePaul University. Home prices in many major metropolitan areas have recovered and hit new highs since the 2008 housing crash, but in the Chicago area only a few suburbs and select city neighborhoods have rebounded, he said.
According to CoreLogic, a global property information firm, the Chicago area is one of the U.S. metropolitan areas with the highest percentage of homeowners underwater with their mortgages, meaning they owe more than their homes are worth. During the second quarter of this year, 10.8 percent of residences in the Chicago metro area were underwater, compared with 13.5 percent during the second quarter of 2016, according to CoreLogic.
The day after the Illinois legislature voted to raise the individual income tax rate from 3.75 to 4.95 percent, Northfield-based financial planner Ellen Rogin said she started getting phone calls from clients who are residents of Chicago with second homes in Florida.
The clients, according to Rogin, were saying “I’m worried about Illinois. Should I be moving to Florida?”
Rogin said anyone considering a move has to look at lifestyle, not just taxes.
Chicago certified public accountant Debbie Lessin said that when people consider a move for tax reasons in retirement, they may be missing a crucial element of Illinois’ tax system.
Illinois doesn’t tax retirement income from Social Security, pensions and IRAs, an advantageous provision for retirees living in the state, she said.
BMO Private Bank Chief Investment Officer Jack Ablin is among those with residences in both Chicago and Florida. The seriousness of Illinois’ budget and tax issues became clear to him, he said, when he tried to sell his Highland Park home a couple of years ago. The house was on the market for a year and priced right, he said, but potential buyers kept raising concerns about property taxes.
After struggling to sell the home, he challenged the assessment and was able to substantially lower the taxes. A few months ago, he found a buyer for the home, but the offer was contingent on seeing documentation of the assessment and the lower taxes.
“Taxes are rising so much it’s crowding out the value of homes,” Ablin said. “In many respects a person could argue that housing is cheap in Chicago, and in many respects it is cheap. But it is cheap for a reason.”
Ablin, who works in both Florida and Chicago, said he ultimately decided to make Florida his primary residence. He rents an apartment in downtown Chicago that he uses when in the city on business.