How about reducing the home mortgage deduction to pay for health care reform?

[Tony_FLADEM]

Currently you can deduct the interest on a mortgage up to a $500,000 value or $1,000,000 for married couples.

How about reducing that deduction to mortgages of $300,000 and $600,000 respectively and using the revenue to pay for health care reform?

People who rent do not benefit from the mortgage deduction. Also, most people do not have mortgages that are $500,000 in value.


This would be a way of paying for reform and having a little more fairness.

Just an idea.

[flvegan]

1. How about ending a couple wars instead?

Seems like win-win-win-win to me.

[Laelth]

2. Yeah, that and an increase of the marginal top tax rate to 50% would do it. n/t

:dem:

-Laelth

[baldguy]

3. How about repealing the Bush tax giveaway?

That would pay for health care reform twice over.

[paulsby]

4. how about NOT doing this

first i gotta worry about the taxing the cadillac plan thang... (i have a cadillac plan and my union negotiated for it with the understanding that it was not taxable), and now people want to reduce the mortgage interest deduction?

i'll pass. i bought my house (and i put 25% down) with the understanding that mortgage interest and property tax are deductible.

changing that is the functional equivalent of raising taxes.

[Tony_FLADEM]

5. I think taxing "cadillac" health care plans is a bad idea

I agree with you on that.

Reducing the home mortgage deduction is a way of paying for reform that is easy and brings fairness and has minimal impact on the economy. The average home price is not in excess of $200,000 so most people would not be effected anyway.

Those who own $1,000,000 homes are not going to refrain because the deduction is reduced.

Also, it might help prevent future housing bubbles from occurring.

[paulsby]

6. well...

i'm solid middle class and my house is worth a little over 500k.

i guess i'm ok by your plan, since i'm married.

[Liberal_in_LA]

8. amen

[WeCanWorkItOut]

7. Not a bad idea.

At the same time,I think we need to work a LOT harder
at health reform, educating Americans about health,
taking away a whole array of monopoly abuses, etc.
We don't want to make things hard for lower-income homeowners,
just to pay for excessive use of CAT scans.

[Tony_FLADEM]

9. According to the link below, the home mortgage deduction amounts to

$100 billion per year. Reducing that in half would raise $500 billion over 10 years for health care reform.

[Tony_FLADEM]

10. According to the link below, the home mortgage deduction amounts to

$100 billion per year. Reducing that in half would raise $500 billion over 10 years for health care reform.

[exboyfil]

13. I don't see getting half of the $100B mortgage deduction

unless the threshold number is lowered substantially more than proposed.

Look at the medium mortgage, and the vast majority of mortgages will not be impacted. The medium home price is around $200K.

From an equity standpoint I can understand going away from the deduction, but the change should be made after real estate prices stabilize more and probably should be gradually instituted (perhaps for new mortgages going forward etc). The perfect time to have done it would have been during the housing run up as a way to put the brakes on.

[MiniMe]

11. It is way too hard-hitting on average wage owners, and too much depends on where

you live.

My house was appraised at 325k a few years ago when I refinanced. I live in a dinky townhouse, not the best of neighborhoods. Not a bad neighborhood, but not exactly upscale. I couldn't even afford a mortgage if I was financing most of my house now. However, in many areas, $300k would buy a mansion. Of course, I don't have a 300k mortgage, nowhere near that. However, I think it would hurt a lot of people who got caught in the subprime mess.

[Warpy]

12. FAIRNESS?

The home mortgage interest deduction is the only tax shelter most working and middle class people have. Anyone who suggests ending it is nuts or probably either never wants to own a home or feels shut out of the market.

Fairness means returning to a progressive tax structure with the rich and the corporate paying their way. Fairness means getting the Pentagon boots off our necks, cutting those old boys back to a defense force instead of an imperial military to benefit a bunch of rich guys who don't want to pay for it. Fairness means extracting ourselves from the last administration's wars and avoiding any new ones. Fairness means cutting down the number of offshore military bases and closing the welfare office for the Koch brothers and other military contractors.

Working and middle class people get little enough in the way of breaks. Screwing them even more to get what should have been done through Medicare decades ago is a loser's game.

I'm disgusted anyone on DU suggested it.

[Tony_FLADEM]

15. I'm not saying it should be eliminated. It should be reduced and the money

could be used to provide univeral health care coverage. I think most people would support a reduced (not eliminated) mortgage deduction if it meant having health care security.

As for the millitary budget, I agree with you. We should provide for out defense and not be a policeman for the entire world.

[Warpy]

16. You're still screwing your own class

while leaving the rich and the military untouched.

No thanks.

[SheilaT]

14. I personally think the mortgage interest deduction

should be phased out entirely. It's a big factor in the overall escalation of home prices. People would think very carefully about how large a home and how big a mortgage payment they'd undertake if it, like rents, were entirely out of their pocket.

And the reality is that the majority, maybe the vast majority, of taxpayers don't get to use the interest rate deduction. When I had my taxes done earlier this year and was so pleased that I'd just bought a home and would in the future get the tax break, my tax guy told me that based on my income I'd get the benefit for about five years and after that the interest I'd be paying wouldn't be enough to trigger itemizing, and I'd lose the tax break. I did get a 4.75% interest rate on my mortgage, so it's not all bad newa, but if I could somehow pay off the loan in six years I'd be ahead of the game.

[Warpy]

17. That must be why prices are falling now

Damn tax breaks for poorer folks ruin everything. Tax breaks should be reserved for the rich.

[SheilaT]

18. Excuse me?

Housing prices are falling because the prices had gotten too high. And yeah, the mortgage interest deduction does disproportionately benefit the rich. Meanwhile, I think that the Bush tax cuts should be rolled back, and that Obama should not be afraid to do so.