What Does The MID Mean to You?

Friday, February 27th, 2009 at 9:06 AM

What Does The MID Mean to You?

The mortgage-interest deduction is on the table, how do you fee about it?

If your ability to write off your mortgage interest was diminished or eliminated, would it change your mind about buying and sellig real estate? What would change for you?

We’ll all have some guesses on how any change might affect the overall market, but it would also be interesting to hear how it would impact your individual decision-making too.

We already had this anonymous comment left:

“If this goes through I am officially out of the housing market. Not only that, but either me or my wife will quit working; there is no incentive since one of us will be working full time just to pay the taxes.”

Posted on Friday, February 27th, 2009 at 9:06 AM in Thinking of Buying? | 117 Comments » | Print You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Reader Comments: 117 Responses

I’m sure many here, particularly those that own homes will disagree, but I’ll note the following points:

1) The MID is not fair. Why should homeowners get tax breaks but those that rent shouldn’t? (Not that income taxes are fair to start with, but that’s another discussion)

2) MID is supposed to make home ownership more affordable. However, what it really does is make home ownership more desirable, which increases demand, without increasing supply, which makes home ownership less affordable.

3) Politically, eliminating MID will be extremely difficult. No one likes to have their freebies taken from them.
Spotty | February 27th, 2009 at 9:22 am
I will still buy a home when I can afford it. San Diego still unfortunately overpriced. It is a shelter for the family not an investment or tax shelter. One day it is paid and I can leave it for the kids…
Anonymous | February 27th, 2009 at 9:22 am
I would definitely continue to rent and not look to buy if they got rid of the MID for everyone, not just the $250K+ crowd since I make nowhere near that figure.
PQ Guy | February 27th, 2009 at 9:25 am
Families making $250,000 taxable income. That’s who is impacted on this. There seems to be a lot of attention paid to what is really between 1-4% of San Diego County families. They’ll be ok.

Where are the stories talking about how most tax payers can now afford more house thanks to their new tax cuts?
gywright | February 27th, 2009 at 9:32 am
My rent vs. buy calculator is going to need an overhaul and I’m guessing it’s going to drastically lower the SP I’m willing to pay. My household is nowhere near 250K but on another note if I lose my 9-5 I’ll do my best to take alternate income off the books and join the rapidly growing underground economy.
JE | February 27th, 2009 at 9:41 am
I would prefer if they just leveled the playing field. Make rent tax deductible. Then there would be no incentive or disincentive to own versus rent.
westwest888 | February 27th, 2009 at 9:49 am
Also, it’s $208k for married families. That bubbles down to $104k for single people. Last time I checked, $104k income is the ground floor for being able to afford a home in safe areas of San Diego county.
westwest888 | February 27th, 2009 at 9:50 am
Anybody who thinks the wealth-redistribution programs in the New Deal II package are going to be limited to just “rich” people are on crack. If you work, you’ll be “rich” within the next couple of years, and there will be plenty of unemployed and/or overextended people who the government will want to subsidize with your money. I’m not in the 250+ club, but I’m also not stupid enough to think that the wealth-redistribution steamroller is not coming for me next.

As for the MID, it’s aggravating that we (the people) can’t do long-term financial planning very well because the rules are in so much flux, and housing is a long-term investment. Between the cap-gains deduction changes, the MID debate, and the massive wealth-redistribution programs, I’m kinda wishing I sold a year ago, when I was thinking I’d keep the house long-term. I might still sell in the next year and suck up the market loss: I’d rather have cash and a more flexible tax-mitigation strategy, than be locked into a house when the rules keep changing and I get financially abused cause I can’t get away.

The market in general would get cheaper, but with less individual ownership (cause companies can write off borrowing costs). It’s a net-zero for private ownership (same overall cost), and net-zero for government tax revenue (as ownership moves to corporations to write-off interest); the only effective change would be to lower individual ownership of housing. I guess we’ll see if individual home ownership is a desirable or undesirable condition in the Obamanation.
Nick | February 27th, 2009 at 9:51 am
westwest888,

That is a great idea.

Governments would hate it but people would be crazy for it.
shadash | February 27th, 2009 at 9:52 am
Heads will role.
arizonadude | February 27th, 2009 at 9:53 am
I don’t fall in the $250K + AGI category, so it doesn’t impact me personally.

Regarding how I feel about it…I think a correction of the highest tax rates are called for and this is a step in that direction.
ParadoxofThrift | February 27th, 2009 at 9:54 am
@ Nick:

Feel free to think what you will…but there is no evidence for your “if you work you’ll be “rich” in the next couple of years” paranoia..
ParadoxofThrift | February 27th, 2009 at 9:59 am
I own a 1.5 million + house because I need the right off. If this was eliminated, I would buy a $650k house.
Todd | February 27th, 2009 at 10:18 am
I am fortunate to be a member of the 250K plus crowd. However it is a combined income of bothmy husband and myself that gets us there. We are still paying back huge loans for our law school tuitions. We live in Vegas(where our house has dropped from 600k to 350k),and were looking to buy a second home in San Diego, in part for vacation purposes, and in part, because our home will be paid for in 3 years and we need a bigger mortgage deduction,for tax purposes. If we don’t get the mortgage deduction, we will not be buying a vacation home.It will be more cost efficient to rent for the summer without the deduction. My guess is that this will hurt the housing market alot. We are not rich by any means, we work hard, have no debt(except student loans) and try to save for college and the future. We are paying more than 35 percent of our income in taxes… The mortgage deduction, is the only thing that would allow us to buy a second home which would help the housing market.
bklyn2vegas | February 27th, 2009 at 10:24 am
I think most people are missing an important point as to why there is an MID. It is about social engineering. The MID is in place in part to incentivize home ownership because as citizens marry, start families and buy homes, they have a stake in what happens politically and economically. Unrest and even revolutions are disincentivized as a result.

This is a stabilizing mechanism for society.

To answer the question posed; I would be opposed to the MID being removed entirely but for those making $250K a year I would support it. The Obama administration is looking for revenue. The rich don’t typically pay taxes, they pay CPA’s to get around contributing and have been getting away with it for too long.
Mozart | February 27th, 2009 at 10:27 am
@ bklyn2vegas wrote:
“I am fortunate to be a member of the 250K plus crowd. However it is a combined income of bothmy husband and myself that gets us there ….We are not rich by any means, we work hard”

I realize you work hard…most people in most income brackets do (farm laborers also work pretty hard). But do you not realize that your income puts you in the top 1.5% of your fellow citizens? You’ve got to realize that you live in a country where the median household income is ~ $50K. If being in the top 1.5% doesn’t make your “rich”, I really don’t know what does!

Just curious, what is your definition of “rich”? Is “rich” that class of people who don’t need to go to work and yet have all they wanted?

http://en.wikipedia.org/wiki/Household_income_in_the_United_States
CognitiveDissonance | February 27th, 2009 at 10:31 am
It may cost me a bit..

If you take a step back and ask the question, “Why is ANY mortgage interest deductible?”, you realize the idiocy of it all.

Subsidizing home purchases, in any amount, is immoral and unfair, and in part, what brought us to today’s situation.
Stephen Waits | February 27th, 2009 at 10:36 am
I pay a CPA and I’m not in the 250K+ crowd. I’m in the 100+ but it would seriously limit what, when and even if we buy if that deduction was taken away. However, both sets of parents are which affects us directly. Especially now they want to tax inheritance over 7 mil a year at 50%?
pipes_surf | February 27th, 2009 at 10:37 am
It would not impact me since my family’s taxable income is well below that. Remember – the $208 household income is the taxable portion – if you do 401k’s, etc, maybe DCA, HSA, etc your taxable income is a lot less than your gross income.

Regardless – We bought the house we bought for shelter, not for investment or tax shelter. We wanted a good neighborhood & schools. But we also took out a 15 year loan to pay it off because we’re debt averse… so the interest deduction is going away quickly as we pay down the loan. We may be losing the interest deduction, but we’re also looking at losing our mortgage payment.
UCGal | February 27th, 2009 at 10:39 am
For me, it simply reinforces a financial planning aspect that began when they started phasing out mortgage interest deductions from Schedule A based on higher income. Reduce leverage on your owner occupied dwelling, and increase it on your investment properties.

In other words, move it from Schedule A of Form 1040 to Schedule E where it is fully deductable against real estate investment income.
Kingside | February 27th, 2009 at 10:42 am
gywright –

This guy is totally right! Where are the stories talking about how most tax payers can afford more house thanks to their new “tax cuts”? Oh sure, there are those wingnuts out there who will say, “How much more house can you really get for $13 per week through the rest of 2009 and $7.70 per week through 2010?” Well at $200/sqft that’s 4sqft more. That’s like an extra bathroom or closet! Sure, there’s really been no cut in the tax rate and this is just a credit spread over two years, but don’t let the facts get in the way of this wonderful thing the President has done. I, for one, am so thankful for this more than generous “tax cut.”
nkep | February 27th, 2009 at 10:44 am
Mozart, I have to take issue with you that the rich generally don’t pay taxes. I pay at the top rate on all of my income. This year that will be almost 1mil in taxes alone. I am sick and tired of being demonized for not paying taxes. Take a look at IRS date to see how much the top 1% pay and you’ll understand. And don’t tell me that Warren Buffett pays a lower rate than his secretary. He takes little or no salary and doesn’t sell his stock which is extremely rare, even among the rich. If it is demonstrably not true according to the IRS data, pls stop stating it as fact. Thanks.
BCBCBCBCBCBC | February 27th, 2009 at 10:57 am
yes, this would be a major factor in me not re-entering the housing market, especially in SD. Prices are still a joke here.

CognitiveDissonance – Calling someone ‘rich’ at 250K because they get grouped into some ‘top 1.5% bracket’ with multi-millionares seems pretty ignorant to me.
justrent | February 27th, 2009 at 10:59 am
As the the current $1mm cap is not inflation adjusted the MID goes away a little every year. AMT was not inflation adjusted and now impacts millions of folks versus the few originally targeted. MID will be chipped away bigtime when all the dollars the FED is pumping into economy take off and turns into runaway inflation. By the way this inflation will also help the Fed pay off the old debt with the new funny money. All part of the plan,
DJ | February 27th, 2009 at 11:00 am
@ justrent:

So would you please do us a favor and just for us ignoramuses, please define “Rich”?

Note…this is not a debate (for now) on whether the “Rich” should be taxed more…just a matter of definition …who do you consider “Rich” in this country?
CognitiveDissonance | February 27th, 2009 at 11:04 am
Apparently the proposal is for high end income in the 33% and 35% brackets to deduct at 28%. So a 5% difference in tax credit.

One way of looking at this is the highest tax brackets will now get the same benefit as someone in the 28% bracket. Of course, they are also paying income taxes at a higher marginal rate (whether most of their tax, or just a sliver like I might). This does discourage people to buy the biggest house they can get for their income, which formerly tied income to mortgages.
sdbri | February 27th, 2009 at 11:11 am
CognitiveDissonance – i can’t define rich. that’s obviously a subjective term. But I can disagree with the notion that a family and/or a small biz making 250K are somehow ‘rich’.
justrent | February 27th, 2009 at 11:25 am
I might be impacted by this in future years if my income reaches that bracket due to bonuses. The tax effect will be strongest in my first years of mortgage (when interest is dominant), as it tapers down towards the last (when principal is dominant). So it has the most impact on rich people buying houses today, less impact on rich people who have long owned, and no impact on any married person making $250K or less ($200K for single). I’ll keep this in mind, but it’s actually kind of a wash for me because the $8K credit cancels out with this, assuming I enter the 33% bracket. Ironically.
sdbri | February 27th, 2009 at 11:30 am
If we’re only talking about the high income changes currently being discussed, the income amounts are far enough over ours that we’re unlikely to get there before it’s time for me to retire, and if by some miracle we did have a chance to get there, the extra tax we’d be paying would not dissuade me from making the extra income.

If we’re talking about eliminating all MIDs, it would take a few bucks out of our pocket change and retirement savings, but we never factor tax deductions into how much we can afford to spend on anything. People who makes financial plans that can’t withstand a change in the political winds ought to have their heads examined.
GeneK | February 27th, 2009 at 11:45 am
When I say I am not rich, I mean I am not rich. I drive a 5 year old Camry, My Husband drives a 4 year old SUv. W ehave lost 1/2 of our money in our 401k plans in the last 2 years. Our vacation last year consisted of renting a house in San Diego for a week. We have to pay for private school, because, schools in Vegas are underfunded. We are both salaried employees and paid almost 100k in taxes last year. We play more than our fair share of taxes. In fact we are evaluating whether I should quit working, since my salary goes almost entirely to pay our taxes. While I acknowledge that we are lucky to be making the money we are making, we are not rich… we worry about where the money will come from to pay for college, we worry about where the money will come from to take care of parents, who need to be helped. While we don’t worry about putting food on the table, or paying our mortgage, we do worry about saving for retirement(no pensions), paying for college for our kids, and paying for medical care. I somehow doubt those who are truly “rich” worry about things like that…
bklyn2vegas | February 27th, 2009 at 11:51 am
I am down to shopping at dollar tree and eating noodle ramen.I guess that means I’m not rich either.If i made 250k / year I would be living it up bigtime.Won’t effect this dude.
arizonadude | February 27th, 2009 at 11:55 am
I can’t believe all the rich people (ok, how about we call you ‘top 1.5% of earners) moaning about having to pay a marginal bit more in taxes.

I bet you moan about the budget deficit too.

I suppose you think that all the loafers cleaning the bathrooms you use should pay a higher % tax than you, in order to balance the budget?

I’m waiting with baited breath until one of you say “let them eat cake”
FreedomCM | February 27th, 2009 at 11:57 am
My husband and I make ~$200k and are young. No doubt we’ll be at the $250k point in the next couple years and we too will be demonized. It’s sickening that successful people are being abused by the govt and scapegoated by the masses. Those who make good incomes WORK REALLY HARD AND LONG. An income of $250k does not equate to the lifestyle of Paris Hilton.

I worked my tail off in school and work like a dog at my job. Does someone making $30k have an engineering degree or wear an electronic leash for work? Would he/she work on Thanksgiving or New Years? I did.
garbler | February 27th, 2009 at 12:05 pm
FreedomCM – step down from your idealist throne. no one mentioned anything of the nature that you stated. way off topic.
justrent | February 27th, 2009 at 12:06 pm
FreedomCM, I am fine paying my share. My point is we have a very progressive income tax schedule already. Living in CA would require me to pay over 50% in taxes. Any time you hear about tax savvy strategies for deductions, most are phased out at 250k or so. MID was the last of these left. What do you think the right level of total taxation of the rich? 50%? 60% 90%?
BCBCBCBCBCBC | February 27th, 2009 at 12:06 pm
If you want a bit of perspective, a person living up here in wonderland (west los angeles) making $250k still won’t be able to afford a decent house in a nice area. Everything good up here is still well over a milli.

Doesn’t mean you can’t still live ghetto fabulous by renting and buying whatever the hell you want. I laugh when I see ferraris parked on the street, but right now it’s a better investment than a house. 2008 peak ftw.
Genius | February 27th, 2009 at 12:10 pm
freedomCM i don’t mind paying more for taxes. What i do mind is bailing out people who were irresponsible and chose to buy more house/car/vacation then they could afford and expect me to pay for it. My neighbor bought her house for 280k(as did I), 5 years later, she is worried about losing it in a foreclosure. She owes 650k on it. She drives a new mercedes, her daughter who is 17 drives a Lexus. They vacationed in Europe last summer. She used her house as an ATM and took 360k out of it during the last 5 years. She earns about 100k, should she be able to get a deduction on her new mortgage which is 2x what she originally paid for it by being irresponsible? Or is it ok because she isn’t rich?
bklyn2vegas | February 27th, 2009 at 12:22 pm
All our home purchase limits have been based on what we could afford to pay from my income alone. Tax deductions were never included in the calculation, nor were my wife’s income when she was working or her disability now that she can no longer work.

The MID is intended to help make it *easier* for people to buy a home. If we used it all up to the point where it was what made it *possible* for us to buy, how would we be any different from all those people who were only able to buy homes they couldn’t afford because the government artifically lowered their interest rates and loosened their loan qualification requirements?
GeneK | February 27th, 2009 at 12:47 pm
Last year, the effective tax rate on the wealthy has been lowest in decades. The gap between top and bottom is bigger than ever.

Bklyn2vegas, your anger is misplaced and you are overpaid.
Alex | February 27th, 2009 at 1:03 pm
I’ve lived in Europe. What’s considered middle class in Europe is equivalent to American lower class. That’s what socialism has done to their standard of living, and we shouldn’t emulate it.
Mudd | February 27th, 2009 at 1:14 pm
Alex:

My guess is that you are paid exactly what you’re worth. If you’re waiting on the government to improve you’re lot in life, then you will have a very long wait.
nkep | February 27th, 2009 at 1:19 pm
Mudd- Let’s also mention that in general the European “socialist” middle class has good health care, free higher education and a safety net. Here we’re paying taxes in the form of college loans and health insurance. Difference is someone makes a lot of profit here and a lot of people have to do without.
Mozart | February 27th, 2009 at 1:30 pm
Mozart, you obviously don’t read much news and haven’t lived in Europe.
Stephen Waits | February 27th, 2009 at 1:45 pm
Todd wrote “I own a 1.5 million + house because I need the write off. If this was eliminated, I would buy a $650k house.”

O.K., not calling you out, Todd, but a few points here for the group to ponder:

1. You can only write off the mortgage interest on a loan of $1,000,000. If you are writing off the interest on 1.5 mil, it is not allowable. Furthermore, you can only deduct the related interest on a HELOC amount of $100,000.

2. If you have the income to pay on a $1,000,000 mortgage, you are almost assuredly hit with AMT, which disallows the interest deduction on any portion of a HELOC not used for home improvement (think purchase of a boat or auto), as well as property taxes, and effectively taxes you at a higher rate on your schedule A itemized deductions.

3. If you have the income to pay on a $1,000,000 mortgage, but are not hit with AMT, you are almost assuredly hit with the phaseout of your schedule A itemized deductions, so you lose the benefit of the a portion of the mortgage interest and property taxes you pay.

4. When calculating the benefit of itemizing, keep in mind the standard deduction amount and subtract that amount from your total deduction before you calculate the “tax savings” from itemizing.

This is my opinion: I have never understood why I should pay $3 in interest to save $1 in taxes. I would much rather pay the $1 and have $2 in my pocket.

It’s been a long time since I’ve studied tax theory, so if I am incorrect in anything I’ve stated, please post the correction.
no_techie | February 27th, 2009 at 1:56 pm
First of all, I contend that the definition of “Rich” is always relative….relative to what? Someone earning $250K is not rich compared to Bill Gates obviously, but is very rich compared to the average American family that makes $50K/yr. I contend that while we can have honest differences of opinion on whether the top 1%, or 1.5% or 2.5% constitute the “Rich”, I don’t think its that hard to say that if you are making 5 times as much as the median income level of the country, you should fall in the “Rich” category. Maybe not in comparison to other lawyers or CEOs, but the govt definitions of “Rich” should obviously take the entire population in consideration.

I am also tired of hearing that you “WORK REALLY HARD AND LONG.” Is it anyone’s claim that the average farm worker or restaurant waitress doesn’t work REALLY HARD AND LONG?? Most people in all income brackets (including the Rich) work very hard and long. Thats not even an issue.

In any case, we’ve always had a progressive tax system where the Rich pay a higher marginal tax and that fundamental fact isn’t changing regardless of all the whinings about “socialism”. Those who think this is socialism don’t understand what socialism is. In fact, the proposed tax brackets are not much different than what it was under Reagan’s time I believe.

And @ Stephen: Why don’t you point out what Mozart was wrong about regarding Europe instead of figuring out “obvious” traits about his reading and traveling habits..
CognitiveDissonance | February 27th, 2009 at 2:14 pm
nkep, my rudeness is by intention, your dumbness by design.
Your turn.
Alex | February 27th, 2009 at 2:20 pm
http://mises.org/story/3360
Stephen Waits | February 27th, 2009 at 2:22 pm
@Stephen

Your link is a good example of my nom de guerre. It criticizes the liberal philosophy while being completely ignorant of the fact that its under the so-called conservative administrations (Bush, Reagan) that our Govt spent WAAY beyond their means and the deficit ballooned. I guess that is good “conservative” behavior — increase deficits…

http://zfacts.com/p/318.html
CognitiveDissonance | February 27th, 2009 at 2:29 pm
CognitiveDissonance – Why should the definition of “rich” take into account the median income of the country. Anyone who lives in San Diego county knows that a $1 here gets you much, much less than the midwest. Also, the same jobs in the midwest pay much less than San Diego. Why should someone be penalized more because they live in an area where cost of living and in turn the salaries are higher?
A homeowner | February 27th, 2009 at 2:30 pm
The Rockefellers and the Astors made it by with a marginal income tax rate of up to 95% of income over 400k.

Somehow, they found their bootstraps and managed to cling to their millions/billions.

I think we’ll get by with a max rate of 39% and a removal of government subsidies (socialism) for home owners.

http://www.truthandpolitics.org/top-rates.php <– a chart of historical tax rates.

This seems like a lot of tears in the lobster bisque if you ask me…
HappyRenter | February 27th, 2009 at 2:36 pm
We make well over $250k. I am a wambulance driver and my wife performs with very small bowed string instruments and business has never been better.

I am all for removal of interest deduction. It will result in a more flat tax, discourage people who can’t afford real estate from buying it and encourage savings.
Solar Path | February 27th, 2009 at 2:38 pm
@ A homeowner:

Thats a good criticism. Perhaps the definition of “rich” should really be relative to the citizens of the county that you live in. Fair enough — thats a decent point. The median household income in San Diego county is about $60K (http://www.onlinecpi.org/downloads/Census_Issue_Brief_2007.pdf). I don’t know what percentile $250K is, I couldn’t find any link on it, but I suspect if not the top 1.5% (as it is nationally), I suspect $250K is in the top 3-4% (my guess).

Does the top 3-4% of earners constitute “Rich”? What do you think??
CognitiveDissonance | February 27th, 2009 at 2:38 pm
“Mudd- Let’s also mention that in general the European “socialist” middle class has good health care, free higher education and a safety net. Here we’re paying taxes in the form of college loans and health insurance. Difference is someone makes a lot of profit here and a lot of people have to do without.”
__________________________

I have lived in Europe. I have family presently living in Europe. I have dear friends living in Europe, and others who did and now live here. I also have family in Canada. You will not find a single person in this large group who feels healthcare is better outside of the U.S. It is not even a close call. Ditto for the quality of education. Trust me, we all got a very hearty laugh of the Michael Moore mockumentary Sicko. He is a great director of fictitous misrepresentations.

In any event, certainly we have problems, no doubt, but i say to anyone who believes life would be so much grander elsewhere, pack your bags and have at it.
RSS | February 27th, 2009 at 2:41 pm
@ RSS:

I guarantee you, for someone without health insurance (and there are many Americans without health insurance) — healthcare options in Europe or Canada are much better. Proof by existence…

BTW…if it were not even a close call, how do you account for the fact that Canadians live longer — somehow just genetically better than us??
CognitiveDissonance | February 27th, 2009 at 2:45 pm
@CD – I’m not sure you read, or fully comprehended the Mises article? Yes, it comes out harsh against Obama, but you would be incorrect to interpret that as support for Reagan/Bush. Please go read “Economics in One Lesson” by Henry Hazlitt immediately.

@RSS – Thank you. This is exactly what all of my European friends tell me as well.
Stephen Waits | February 27th, 2009 at 2:50 pm
I second Mudd’s comments. Having lived in the UK and Europe, healthcare is free but not ‘good’ as Mozart claims. In the UK, those that can afford it go to private (non-NHS) doctors.

In response to ParadoxofThrift (comment 12) who says “…but there is no evidence for your “if you work you’ll be “rich” in the next couple of years” paranoia” – I say look at Europe. Every budget cycle they adjust the tax rates to take more from people who work and give more to people on public assistance. This has created a large number of people who are well educated but perenially under-employed because they live just as well whether they work or not. A recent study in the UK found that a family with two parents and two children who made the median household income had less disposable income than a household with a single unemployed parent and two children. That is not only unfair, it is unhealthy for a society and it is immoral in my opinion. But that is where we in the US are clearly headed.
SR | February 27th, 2009 at 2:53 pm
CognitiveDissonance – the question is too broad as I suspect there are people in San Diego who make from $250k up to tens of millions. If you are asking me if I believe a family making $250k is “rich”, it will depend on where they live. In San Diego, if they own a home, I would not consider this person rich. After house payments, car payments, child care, student loan payments, etc., money will be left for discretionary spending (restaurants, yearly vacations), but I doubt the family is jetting off to exotic locations or spending money on a whim without thinking about whether they can afford it.
A homeowner | February 27th, 2009 at 2:59 pm
To have a proper debate on which health care system is better, one first needs to define the metrics of comparison…anyone want to take a stab? i don’t think relying on a handful of friends and relatives and extrapolating the findings to a national system is very scientific, won’t you agree? I would think metrics like per capita expense, life span, infant mortality are good choices of metrics. Anyone have other suggestions?

@ A homeowner:
Here are san diego county household incomes according to the census bureau.

http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id=05000US06073&-qr_name=ACS_2007_3YR_G00_S1901&-ds_name=ACS_2007_3YR_G00_

Given this data, what category would you put $250K annual household income in?

Nice debates…but gotta go now…have fun.
CognitiveDissonance | February 27th, 2009 at 3:01 pm
I’d like to see numbers south of 78 and west of 15.
pipes_surf | February 27th, 2009 at 3:08 pm
Cog:

- homicide rate in the U.S. was 5.9 per 100,000 people in 2004 versus 1.99 per 100,000 in Canada
- 2006 there were 14.24 fatalities per 100,000 people from auto accidents versus 9.25 per 100K in Canada
- America’s obesity rate is also much higher

There’s a whole lot of factors that can explain the reasons Americans live shorter lives versus our neighbors to the North. One cannot use only life expectancy statistics to conclude Canada’s health care is better.
nkep | February 27th, 2009 at 3:12 pm
CognitiveDissonance – Unlike you, I don’t have a politcial agenda. And please stop with the non-relevant general stats, i live in San Diego and non of that data is appicable here. This is just another topic that verifies my lil thesis that people are now so blind and biased with their own political views, common sense is thrown out the window (on both sides) and if you oppose their view you are either a wack job dem or nut bag repub.

I am fine paying taxes at a higher percentage than the ‘average’ family. But when combining all taxes and I’m donating > 40% of my money to gov’tments that have already have proven, on both sides, that they are children and don’t know how to handle the money they already have, then no, that’s enough. Feel free to throw out any data you want or mention some irrelevant country, it’s all meaningless when you look at this topic from a non-partinship view point (or maybe I’m a wack-nut-jub for thinking this).
justrent | February 27th, 2009 at 3:12 pm
In reference to the MID–Yes, it is, and has been a factor in owning a home for our family. However, I also side with the thought of why save $1 in taxes at the cost of $2-3 in interest payments. And, more importantly, I feel we should all strive to one day actually “own” a home free and clear–until this happens, you have ownership rights, but you don’t actually “own” your home until it is debt free!!!
Local Boy | February 27th, 2009 at 3:20 pm
@ justrent:

don’t know if you don’t want to read or cannot, but as far as I can tell, my post # 58 and # 52 deal with income levels in san diego county (which is where you live).

regarding health care, my comments were responses to other posts.
CognitiveDissonance | February 27th, 2009 at 3:54 pm
@ nkep:

“One cannot use only life expectancy statistics to conclude Canada’s health care is better.”

Completely agreed….so I proposed at least 3 metrics of comparison in post # 58. If others have other metrics — here’s another, cancer survival rates — I am completely open to them. What I am opposed to, are comments which are based on the experience of a handful of friends and relatives. That, I think, most will agree, is an unscientific way of evaluating national health care systems.
CognitiveDissonance | February 27th, 2009 at 3:58 pm
@ CognitiveDissonance – so now I’m not rich . What an up and down day. my head is spinning with your ability to google and throw-up more useless census data.
justrent | February 27th, 2009 at 4:29 pm
We must stop feeding the troll. Only then will it starve and die.
Stephen Waits | February 27th, 2009 at 4:45 pm
I’m OK if they do away with the deduction altogether – but I’m not a homeowner right now so I see prices adjusting if this happens. If I were I homeowner I’d be scared that I was next. Might eventually be a zero sum game for Gubberment with RE prices driven down in the higher end.

If this passes hopefully it is temporary or at least they inflation adjust AGI requirements, otherwise more and more people will bump into this as time goes on, similar to AMT.
jbirdfunk | February 27th, 2009 at 5:01 pm
CognitiveDissonance,

Move to Canada with all the other welfare state lovers. You can all sit around and bitch about how much government did or didn’t give you in handouts each month.

Socialism rewards morons like you which is why you like it.

Get a job!
shadash | February 27th, 2009 at 5:03 pm
This was proposed by George W. Bush’s own Advisory Panel on Federal Tax Reform back in ’05.
AK | February 27th, 2009 at 5:07 pm
WSJ’s “The 2% Illusion”,
“Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and “the wealthiest 2%.” Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That’s about 7% of all returns; the data aren’t broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% — about 1.65 million filers making above $388,806 — paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.

Note that federal income taxes are already “progressive” with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He’d also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won’t come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.

But let’s not stop at a 42% top rate; as a thought experiment, let’s go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That’s less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable “dime” of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.”

Sooner or later, everyone will be affected.
And for now, those W-2 “rich” people are really feeling the pain.
gzpandl | February 27th, 2009 at 5:11 pm
In the UK, they did away with the mortgage deduction. People bitched and moaned and still went on to participate in a massive UK housing bubble brought on by a loosening of the borrowing/lending requirements.

I like the idea put out that we do not allow any MID or if we do, just up to the amount that is the country-wide house price average – the amount being reduced by 100K each year until we get there. A staggering number of Americans think they are benefiting from MID when they are not… Ok, maybe in states other than California, but if you paid your mortgage there’s no MID cos you’re not paying any interest.

So I’m just back from the UK where I have family trying to sell homes. They can’t. One set a reasonable price and has barely budged on it over a year. Their house price is a bit on the high side. Some of them have the price low to just right. SO – they should be able to sell right? Wrong. Because now the deposit being required is at least 25% and as much as 45% from some lenders. There are areas where it is now cheaper to buy than it is to rent – but first time buyers cannot buy because they don’t have even 10% of the as little as 120K pounds (x by 1.5 to get to USD) btw, salaries in the UK are much lower for most people than salaries in the USA, but who cares cos we get months of holiday and free health care and most people will get a pension when they hit old age. Yep you can have private health care if you want to pay for it.

My sister wants to move up – but she can’t. People at the top have set a figure and will not budge for even a penny less than that figure. She has a nice home but it has one toilet and a small kitchen. It isn’t going to sell when there are similar homes with more built in storage or better floor plans. We suggested she cut the price even further – clearly undercutting the competition in price. She refuses to do this because she needs equity for moving up. Extra baby so she wants more space – and has the income to pay for it. Why are the people with homes she’d like to buy refusing to budge on price ? Because they bought these houses for maybe 1/10 to 1/2 the current value – yep 10% to 50%. And many of them paid cash or put 20% down. She isn’t in London or one of the crazy price areas. The sellers can afford to wait for a buyer to win the lottery and come to them or someone from the south of england.

I think reducing the MID in the US will encourage higher prices to drop because it reduces the subsidy and therefore limits the payment that can be funded. The process of dropping the MID will not be fun for those concerned… but long term it is the right thing to do.

As a higher income CA+fed tax payer I’m already taxed up the wazzoo and I rent – so I thought the person quoted was more than a little hysterical on the subject.

IF I were to buy a house, it would make me far more likely to do a cash only deal and skip the mortgage/trust deed bit altogether.

when I first came here, there actually was a credit for renting on CA taxes. It applied to lower incomes – which being here for less than 12 mths, we actually qualified for. It may still exist.

I expect to be one of the 250K filers and I will point out the obvious, if I’m going to get crucified and disallowed for everything for hitting 250K in income, then golly gosh darn it, you think I’m going to actually realize 250K in earnings? You think I just might sit on those gains rather than sell? Interest from savings has been more than halved due to the manipulation of the rates. My schedule B numbers are going to be a lot smaller this year. You think I might actually sell some of the losers to balance the gainers? I really do not mind paying taxes – that might sound strange but its true. Fair is fair. You get some, you pay some. What pisses me off is that about 43% of californian’s – number from memory, don’t pay any damned taxes and I have to waste hours if not man-days trying to figure out how much I owe so that I can pay the right amount, or go to some tax huckster, and pray they don’t play fast and loose so that I’ll get audited and end up owing even more.

No 13 – who needs the write off- your spelling and logic suck. You only get to save money on the interest you pay. It is a mortgage deduction not a tax credit. ie you’re saving less than a dollar on your taxes for every dollar you pay in interest and property taxes and you give up your standard deduction money to take the MID money.

to the we need a bigger mortgage deduction crowd – why can’t you just pay your fair share of taxes and/or pay your debts? You don’t NEED a bigger deduction, you need to live within your means. You’re bigger deduction just costs you a bigger interest payment – money you are paying to someone else to get a smaller amount of money from the tax pot.

and to the rich don’t pay taxes they pay CPA guy – just how many of these rich people do you personally know? Are you one of them? IF so, cough up, we need taxes to pay for our elected officials generous pension benefits. You know, the ones we don’t get and have to pay into a 401k to compensate for – that pot that’s now commonly known as the 201k thanks to the home debtors of America refusing to keep their side of the contract and pay for the homes they couldn’t afford to live in. BTW – that pot has gone down about 50% – any one want to make my losses whole there?

250K sounds a lot – it is a lot – until you compare the taxes you pay to the state, and to the feds, FICA, soc sec, etc. I think about 40% goes straight to the various taxes so you get 150K ish left to pay for the rent, college loans etc. Its a lot of money – its not so much when you compare it to what house prices in nicer areas are now. Throw in a ferrari and well its not enough for a new one every year, not if you wish to actually drive it.

In addition to cutting back on MID, why not reinstate the pay back the IRS for the money you cheated the lender out of when you walked from your home loans? Why not institutionalize affordable lending to income ratios? And if you can’t afford it without the subsidy of my tax dollars, then learn to do without.

I don’t own a house. Why should I be paying for you to have your name on one you can’t afford either?

One final point – in the UK, the cost of insuring your mortgage payment against unemployment just went up to 5% and the number of reasons for not paying you should you become unemployed also increased significantly. CA now has 10%+ unemployment. Just how likely do you think it is that they’ll actually implement this MID reduction plan now? They’ve already started paying people to buy houses they can’t afford – with the interest free loans and tax credits – do you really think their desire to sock it to the rich b**tards will trump their desire to keep on juggling the chain saws?
T | February 27th, 2009 at 5:20 pm
The White House’s budget for fiscal year 2010 calls for tax hikes on wealthy Americans. In this case, that means couples making over $250,000 a year and individuals $200,000 a year. Under the budget plan, these households (about 3 percent of the total) would experience tax increases of $318 billion over the next 10 years. Here’s a look at where California stands on the list and how they voted in the last presidential election.

5. (Tie) Massachusetts
% of Households Earning $200K+: 6.2%
Total Households: 2,449,133
Households Earning $200K+: 152,348
Median Income: $57,681

Election Results:
Obama: 62%
McCain: 36%
5. (Tie) California
% of Households Earning $200K+: 6.2%
Total Households: 12,200,672
Households Earning $200K+: 757,411
Median Income: $56,311

Election Results:
Obama: 61%
McCain: 37%
Nathan | February 27th, 2009 at 5:41 pm
I have not had a mortgage since my first apartment purchase 30 years ago. I have lived in homes that I purchased cash while slowly fixing up and moving up. I will buy my next and final home cash. And I take my interest deductions on my rental properties.
Will Pierson | February 27th, 2009 at 5:49 pm
First of all, high income does not mean rich. This city is full of phony wealth, but the tide is going out and we’re seeing who’s wearing shorts.

As for taxes, it makes me sick when people of lower income think it’s fine to raise taxes on the higher incomes. WHO DO YOU THINK REALLY PAYS THE TAXES IN THIS COUNTRY ANYWAY? (Hint: it’s not the lower income.) If you want to make more money, then find a new job. If you don’t want to find a new job, then stop complaining, and please don’t ask for other peoples’ tax dollars.

Finally, as a renter, I don’t care if they do away with FID. That will just bring home prices down further. I’ll wait. I’ve got all day. I’ve got my down payment ready. I’ve got upgrade money ready. I’ve got money for furniture ready. If Obama wants to help the fictitiously wealthy, he’s not going to solve any economic crisis. The people with money will just sit on the sidelines and keep their dollars out of circulation.
The Blur | February 27th, 2009 at 5:56 pm
JtR: Excellent post to bring out the comments. I am squarely in the “phased out MID” bracket, but I’m OK with that, since the policy of proping up home prices is bad policy IMO (sorry NAR).

Mr. T (comment 71): We are sadly a culture of whiners, jealousy and envy. The “poor” envy the “rich”; the “rich” envy the “more rich”. Whoever is richer than you obviously does not deserve it, and the government should take it from them. We seriously covet. We do not like living within our means; we want the unlimited means to which we are entitled as a matter of “justice” or whatever. (And, we’re lousy spellers).

CPA: I can’t speak for the other rich bastards whom (according to you) pay no taxes, but we (my immediate family) are obviously part of the “stupid rich”, since instead of paying a CPA to pay no taxes, we pay 40% of our total (not net, gross) income in taxes between the Fed (income, self-employed FICA and Medicare), California and County (property); not counting sales tax and other taxes out there. Ask Wesley Snipes about not paying taxes. See how he made out.

Nathan: Yes, Calif voted Obama, but California has far more low to no tax payers looking for some redistribution to come their way, than the other way around.
Smithers | February 27th, 2009 at 6:27 pm
Hey, Jim. Bill at CR snaked you again!

And no, I don’t intend to comment on the HMID. People are sick of hearing it.
Rob Dawg | February 27th, 2009 at 7:13 pm
Yes, Calif voted Obama, but California has far more low to no tax payers looking for some redistribution to come their way, than the other way around.

And considering that California has one of the nation’s lowest returns on its payment of Federal tax dollars, I guess all of those bums will be disappointed.
Blissful Ignoramus | February 27th, 2009 at 7:29 pm
It means that the Republicans will be back in power sooner than anyone ever expected.

Which is why I don’t see it flying.
Mr. B | February 27th, 2009 at 8:17 pm
Mozart, I am recommending a name change.
How about MARXart as in Karl… How long have you had the propaganda job?
braided breath | February 27th, 2009 at 9:34 pm
“but either me or my wife will quit working;”

Great, one more job available in this tough economy for somebody that needs it.

The MID isn’t /that/ big a deal. It’s worth about $1000 per month on a $500K loan, but of course since we are all bidding against each other for the same properties all the MID really does is jack up the prices by the cash subsidy. . . . we’d be better off without it but to change it too abruptly would be immensely unfair to people who were counting on it (ie. everyone).
Troy | February 27th, 2009 at 10:00 pm
Troy is spot on. It’s one thing to complain about taxes, it’s another to whine about the fact that you leveraged everything you could to buy into the bubble. If you need a 33% deduction over a 25% deduction just to “survive”, clearly you bought a house you couldn’t afford. At 250K income, you’d have to have bought at least $600K house with 20% down. You shouldn’t have.
sdbri | February 27th, 2009 at 11:07 pm
I’m getting tired of all the “rich” bashing going on right now. Poor people don’t pay taxes, I know, I’ve been poor. And I don’t care how much you pay your CPA, if you make $250K a year, a huge chunk of your income is going to keep people like Mozart’s bong lit.
Rudolpho | February 27th, 2009 at 11:35 pm
@ CognitiveDissonance

Nine posts. 10:31am – 3:58pm. Five and one half hours of an eight hour normal workday. Four and one half if lunch is excluded. Still – better than half of the day.

The question is – Who’s time were you using researching your stats and posting your answers all day. All this rhetoric would seem to indicate that it is not your own but more than likely someone else’s (employer).

Generally, an efficient use of time allows one to accumulate wealth. Thereafter, wealth can create wealth.

Perhaps you fall into Smithers’ comment number 75 envying the rich.
Uncle Taxman | February 28th, 2009 at 6:35 am
Canada does not have MID. Yet their level of home ownership is just as high as the United States. MID is a relic. It is a market distortion. It entices people to make irrational decisions. We should suck it up and abolish it immediately. The earlier we get rid of it the quicker we get on the path of recovery.
Grateful | February 28th, 2009 at 7:05 am
Also, a bit of history. Interest on most types debt was deductible early last century. But not many ordinary people took a deduction since almost all debt at the time was held by corporations. There was no consumer debt, at least not the way we know it today. Little by little, various types of interest stopped being deductible. The only deduction that survived was the MID. Again, this was a political bait foisted on us to get our votes. The MID is the political equivalent of free ice cream for everyone — hooray. But anyone with common sense more developed than a sixth grader can understand why the MID is a bad idea economically. The longer we insist on our right to free ice cream, the quicker we’ll drop dead of a fiscal heart attack.
Grateful | February 28th, 2009 at 7:14 am
@ Post 83:

Or perhaps a Grad Student…

I like it how the standard rhetorical ploy of “if you can’t argue with facts and figures”, “lets attack the debater” is being used. — doesn’t fool anyone that you aren’t debating the points…but could that be because you don’t really have the facts on your side?
CognitiveDissonance | February 28th, 2009 at 7:17 am
CognitiveDissonance,

Try working in the real world before knowing everything.
shadash | February 28th, 2009 at 9:05 am
87 comments, this one struck a nerve!
doughboy | February 28th, 2009 at 9:25 am
“Little by little, various types of interest stopped being deductible. The only deduction that survived was the MID. Again, this was a political bait foisted on us to get our votes.”

I think it would probably be more accurate to say that politicians viewed the prospect of eliminating the MID the same as trying to wrangle an angry rattlesnake naked and without implements. Any elected official who even suggested the possibility would be out of work at his/her next election.
GeneK | February 28th, 2009 at 11:49 am
I’m all for getting rid of the MID. It should be removed from housing all together.

On a second note, I’m in the $50k/year bracket and I don’t think the rich should have to subsidize the poor. My father, who is a high income earner as a trustee in bankruptcy despises the progressive tax system. On a daily basis he sees the tax returns of those that abuse the system (aka – welfare state). It raises a false sense of entitlement and provides for little motivation to work or excel.

The tax system needs a major overhaul and should be replaced by the flat tax. Then you can pretty much eliminate the IRS and its fear mongering, which in turn cuts government spending. Although I’m sure the government would find something else to waste that saved money.

Lastly, Barney Frank = THE DEVIL
Poorhouse | February 28th, 2009 at 12:25 pm
If we’re turning the conversation to reform of the basic tax system, I’m on the side of scrapping the income tax for a consumption/VAT tax, with provisions to exempt certain basic purchases such as food, a primary residence and healthcare (I suppose some exemptions could be capped, if necessary to deal with public sentiment that someone who buys a 20-bedroom monster mansion shouldn’t get the same 100% exemption as someone who buys an 800 sq ft condo). No distinction between those who rent or buy. Just so long as we don’t end up with consumption *and* income taxes.
GeneK | February 28th, 2009 at 1:08 pm
CognitiveDissonance – classic, knew you were a grad student..would guess you are studying philosphy, in your fourth year for a two year program, living off of student loans…my second guess was you worked for the govt. man i’m good.
justrent | February 28th, 2009 at 2:12 pm
Something like MID is easy to add, and hard to take away. On the surface it makes appears to make housing more affordable, but in truth it makes housing more expensive. If you already owned property and it were offered you’d support it. If you did already own property, and you were a dummy, you’d sud support it also- hence it would get enacted.

After its been in effect, if you already own property, you’d be against getting rid of it, and if you were a dummy and didn’t own property, you’d be against getting rid of it, hence, a populist president wouldn’t want to get rid of it.
Jay Jay | February 28th, 2009 at 4:23 pm
The depth and strength of analytical thinking from some posters (#92, #87) is fantastic. In reality, I have a MSEE from Stanford, worked in the high-tech industry (is that a real job??) for just a bit over 10 years. Earned 6 figures for the most part of that 10 years…now getting a PhD in EE. Strictly speaking a PhD is a Doctorate in Philosophy…so yeah man justrent…you are good bang — on…such signs of raw intelligence!! Well done…
CognitiveDissonance | February 28th, 2009 at 4:36 pm
cd – lets go grab a beer sometime, you sound like a ton of fun.
justrent | February 28th, 2009 at 4:43 pm
Cognitivedissonance,

Don’t lie we all know you run the AV equipment for all the real people that make decisions. Have fun in your dream world.
shadash | February 28th, 2009 at 6:06 pm
pizza port anyone — they got good beer. shadash…what will you give me if I am not lying — maybe 10 public mea culpas?? Wanna take me up on the challenge?
CognitiveDissonance | February 28th, 2009 at 6:18 pm
CD – Do you complain that the poor pay the same amount as the rich for their pizza and beer?

Make your voice heard, and maybe Obama will implement a “pizza and beer redistribution” program.
Smithers | February 28th, 2009 at 7:08 pm
OK, Pizza Port – Tuesday, March 10 – 5pm.

http://www.pizzaport.com/index.htm
Jim the Realtor | February 28th, 2009 at 7:14 pm
Sounds like a great plan…I won’t be able to get there until 5:20-5:30ish…but I am putting it on my calendar…Sounds good?

Shadash..you in? and please do tell me if I can prove you wrong and prove I am not lying what you will do.
CognitiveDissonance | February 28th, 2009 at 7:25 pm
Unfortunately I will not be able to attend. On Tuesdays I have soccer games to play.
shadash | February 28th, 2009 at 7:40 pm
come after the game, I’ll wait for you…or suggest a different date… or say you are backing out of the challenge…
CognitiveDissonance | February 28th, 2009 at 7:43 pm
Um it kinda feels like I’m getting challenged to a fight. A little weird.
shadash | February 28th, 2009 at 7:58 pm
don’t be silly shadash… you said I am lying (#96), I said I will prove I am not… JtR was nice enough to set a date in PizzaPort, why are you implying anything like a “fight”.

It does seem sad, however, that you are happy to accuse me of lying and not having a job and all that kind of stuff, but are unwilling to let me prove you are wrong by meeting in a public place!
CognitiveDissonance | February 28th, 2009 at 8:04 pm
How about Thursday the 12th?

Sharkbite Red all around.
Jim the Realtor | February 28th, 2009 at 9:03 pm
“For example, someone in the 35% marginal rate bracket buying a million dollar home and putting 20% down would have an $800,000 mortgage. At 6% interest, they’d be paying interest of $48,000 a year, or $4,000 of their $4,797 a month mortgage payment.

Currently, 35% of that payment – $16,800 – is tax savings, but under the new plan, only $13,440 would be, a $3,360 difference”

For the record I wanted to bring attention with my handle/screen name. It speaks for itself. I know several people with higher degrees that are basically derelicts when it comes to anything other than being a career college student(read: cannot afford dinner out). I also know super savvy entrepreneurs without 4 year college degrees who have created multi-million dollar per month (gross revenue) businesses that are creative geniuses. Guess which ones I want to hang out with?
Educated Derelict | February 28th, 2009 at 9:28 pm
LOL. Nice that this conversation finally degraded (upgraded?) into a happy hour. Nice.

So how much is the top 1.5% earners gonna pay of the final bill? How much is the bottom 25%?

Class Warfare, YAY!
WB | February 28th, 2009 at 9:36 pm
The MID “means” several hundred dollars a month to us. A not-inconsequential amount, but not anything that would threaten our home ownership. We’d have to eat out less, my next car probably wouldn’t have leather seats and my wife might have to make do with one less movie channel on our cable service. Obviously I’d rather have it than not have it, but seeing it disappear from the current tax system would bother me for another reason.

I bought my first house “the old fashioned way.” Lived below my means, saved every penny, put 20% down on fixed rate mortgage. Since buying, I’ve been irritated by people who lived like there’s no tomorrow but complained that “nobody could afford a home anymore,” annoyed by people who took on debt they couldn’t afford then whined when they couldn’t pay it, and am now really ticked off by suggestions that such people shouldn’t have to pay what they owe. I’m all for things that make it harder for people to do those things that have irritated, annoyed and ticked me off, but things that would make it harder for people to do the things I did are another matter. I’d rather see the playing field leveled by improving things for renters.

There are three locations on that pizza website. We are talking Carlsbad, right?
GeneK | February 28th, 2009 at 10:03 pm
Thursday 12th, Carlsbad PizzaPort Works for me…

Shadash, you in this time?
CognitiveDissonance | March 1st, 2009 at 6:23 am
@CD

See http://www.cnbc.com/id/29441906.

Not in great detail but factually correct. A good short read nonetheless.

If AMT is in play for a taxpayer – any additional itemized deductions other than charitable and a few other exceptions ultimately make no difference. Increase the itemized deduction and the AMT picks up the slack. It makes for nothing but worthless record keeping by the taxpayer (client in my case).

The AMT computation is one that can sometimes require your Stanford MSEE/SoCal PhD-EE training! It may require a philosophy exercise as well.

Here is the one that will warm your heart though… http://latimesblogs.latimes.com/washington/2009/02/charitable-cont.html …Note that this reduction (admittedly not a real estate related deduction) will probably hurt the folks you mention at post 45. Contributions are not in play for AMT so this decrease could have an effect on those all the way down to $200,000 of income before itemized deductions. Translation – potentially less non-profit help for the lower income hard-working from the “rich”. The “rich” unfortunately includes the middle class technology engineer with a spouse working as a primary school teacher.
Uncle Taxman | March 1st, 2009 at 7:23 am
cd – i think your years of self proclaimed analytical thinking have caused you to lose the ability to interpret sarcasm…no body want’s to have a beer with you dude. get back to your wizard of warcraft video game and way to kill this thread – thread dead.
justrent | March 1st, 2009 at 7:26 am
I wouldn’t mind going. I coach basketball until 6:00 on Thursdays at the Oside rec. I can get there by 6:30 though.

I think it would be fun to put some faces with names and have a beer or 2.

I’ve always liked pizza port.
keithl | March 1st, 2009 at 7:55 am
And I thought a Prop 13 repeal would be a tough sell! I think there would be a revolution if the exemption is eliminated.
Dr. Detroit | March 1st, 2009 at 9:18 am
After reading a number of these posts, the most disappointing thing is that citizens are taking after citizens here. These are stressful times, and it is not the Vegas lawyer making 250,000 or the EE grad student who is at fault for all of us feeling
a. overworked
b. overstressed
c. and feeling ripped off
d. Not Rich

There are some great culture fissures occurring, a microcosm is apparent in this thread. The split is between those who believe in the ideology of individualism. You want to do it yourself, you’ve done it yourself, and you are going to do it yourself. To heck with everyone else. This belief system belies the reality that we are all interconnected – if kids in your local elementary school don’t see a doctor then the likely hood of your kid getting sick increases, if your neighbor defaults on his house, then the value and enjoyment you get out or yours goes down (As you stress on whether or not to mow his lawn, too). This interconnections go on and on – just look at the low crime rates in Europe vs. how unsettled we are about crime in our own towns – and how many people we have in prison. These rates are related to a lack of a social safety net and poor educational system. So you pay one way or another. Me? I’d prefer to pay for schools, unemployment insurance, and welfare than police and prisons.

Second, the American culture defines work with value as a human. To the person that has on an “electronic leash” and worked on the holidays, I don’t care how much money you make, you are losing valuable time with your family that you can never get back. That the American work ethic (and labor laws) allows such exploitation feeds into the breakdown in trust and goodwill we are experiencing amongst ourselves (Well, I suffer and/or deserve more b/c I sacrifice to my corporation more than you do).

I could go on, but let me just return to my original point: That average citizens are taking off after each other is disappointing. We really need to be focusing on the corporations and individuals that have been taking us for a ride:
the military industrial complex (600 billion a year every year for our military). 2 trillion for the fiasco in Iraq. Billions more in corporate welfare. Give aways of America’s natural resources for corporate profit. Bernie Madoff, Dick Cheney (Billions to his former Corp. Haliburton), the Wall Street Bankers. These are the people we should be angry at. There is more than enough to go around for all of us, but when those greedy SOBs take and take and take, there isn’t any left for the rest of us.
I just hate to see those of us in the cell tearing each other apart, when it is the warden’s fault we are here.
stephen | March 1st, 2009 at 6:11 pm
Or stephen, it could just be what happens when folks jumps up on their soapbox and get off topic in the comments section of a blog. Seems to me that happens in good times and bad.
Kingside | March 1st, 2009 at 9:34 pm
I suspect that Jim occaisionlly puts up entries he knows are going to end up in soapbox land (MID, Obama’s bailout plans, etc.) so we’ll get it out of our systems and behave ourselves better when he posts his empty home tour videos.
GeneK | March 2nd, 2009 at 7:11 am
I’m completely in favor of eliminating the interest deduction.

It essentially would increase the price of debt within a window, making debt more expensive. People would react by wanting less of it.

Why would anyone except maybe a banker think this was a bad idea?
Bernie | March 3rd, 2009 at 1:18 pm