If I were a local politician, I’d like to preserve either the M.I.D. or the state and local taxes – or at least include the property-tax deduction up to $10,000 – and compromise on the other changes
Use the slogan, “If California tanks, the whole country tanks!
“Use the slogan, “If California tanks, the whole country tanks!”
I’d only opine that for folks past the age of 55, instead of being considered a warning, it might be embraced as a mission statement.
Five of eight years to qualify for the cap gains exemption? That [dedacted]! I have/had definitive plans for taking advantage of the 2 of 5 current requirements. This alone will be costing us hundreds of thousands.
Just live longer?
Maybe we should go back to simpler times and just adopt the tax rates/system from the 50’s and early 60’s. Look that up. I mean, 91% top rate seems fair. Yikes. JFK got it down to 70%. Reagan got it down to 50…. and so it goes.
California needs to tank and I live here.
Too much free cheese in the market. Majority of people I know own more than one home. A few years ago they got the mentality in their head to buy a new primary residence and rent out the old residence. Homeowners are no longer treating homes as residential but as a business and investors are treating homes as business units. I’m with Congress, get rid of the deductions and keep businesses out of zoned residential areas. If you can’t afford it then don’t buy it. Eventually people will come to terms that a 5000 sq’ foot lot with a house on it is not worth a million dollars. Then all the businesses owning homes will lower prices. California won’t tank because they can still use the deduction called a loss.
Things looking so foreboding for the generation Z kids. Back in the day, all we had to worry about was the acid kicking in before our graduation ceremony was over.
We had a lot of hysterical, shrill cults too, but they weren’t as politicized. Dumb hippies mostly. But most important, housing hadn’t been financialized like uzbekistan pork bellies. A hippy could secure a pad for his wives and kids.
I’m sitting in a Volvo service waiting room right now. Other customers sitting here look like school teachers on valium, and they’re shaped like a liberty bell. I don’t look like them… that much… do I? My middle-aged service guy looks like he was captain of his high school football team. He says he can’t change the navigation voice for the Volvo.
The manner by which the female voice gives directions seems pointed: “PLEASE… merge to the left lane!” It’s more than pointed. I feel I’m being told what to do by a mean Scandinavian lady who’s sorry she ever agreed to take the job. “You can shut off the voice,” the service dude offers. “Nah,” I say, “I’ll get used to it.”
I have/had definitive plans for taking advantage of the 2 of 5 current requirements.
Think what could happen if our market goes back to the historical norm of a ten-year cycle (five up & five down). The five-year occupancy requirement could turn into ten years naturally.
I think we can count on our homeownership rate to decline, regardless of tax reform:
https://www.the-american-interest.com/2017/11/14/anatomy-homeownership-crisis/
In the discussions about repealing our home mortgage interest deduction as part of the Trump Administration’s tax plan, one frequent argument for repeal is that other countries don’t have one, and their housing markets are doing just fine. The United Kingdom is commonly cited as an especially relevant example; they are like us, with the same common-law legal framework.
This rose-colored view, however, is not shared by the British themselves. Earlier this year, the latest UK national housing survey showed that the homeownership rate has been dropping since 2003 and is the lowest in 30 years; it is also the fourth lowest rate in the European Union. This news was greeted with headlines across the political spectrum, from the liberal newspaper The Guardian to the conservative Daily Telegraph.
The Resolution Foundation, which focuses on UK living standards, reports that, for the last 40 years, each cohort of young families has had lower homeownership than the cohort before it at the same age. The Legatum Institute, whose objective is “to ensure the legacy we pass on to the next generation is one of increasing prosperity and human flourishing,” calculates that the average new home in Britain is about 800 square feet, 60 percent the size of the average new home in Germany, and even at that size too expensive for most homebuyers. It goes on to state that “People’s impulse to homeownership is right and natural. People who own homes have a stake in their community.” Both of these policy research institutes are developing new programs to promote homeownership.
The situation in the UK is relevant to the current political discussion in the United States. The UK had a mortgage interest deduction for more than a century. It was part of the original income tax law enacted in 1842, and it stayed in full force until 1974. At that time, the UK homeownership rate was 50 percent. Then the deduction was phased out. Beginning in 1974, the deduction was limited to mortgages of 25,000 pounds or less. Few homeowners were affected; the average house price in the UK was 10,000 pounds. But house prices were rising and the ceiling was not adjusted for inflation. By 1990 it applied to half of mortgage originations. Between 1993 and 1999, the deduction was reduced from year to year; by 1999 it was gone.
The beginning of the repeal process coincides with the beginning of the decline in homeownership rates by age cohort noted by the Resolution Foundation. Renters were having a more difficult time buying a home as lenders required larger down payments. The problem was especially acute for young families. The proportion of homeowners among households headed by a person younger than 25 dropped from 32 percent in 1981 to 10 percent by 2012; among households headed by a person between 25 and 34, the homeownership rate dropped from 62 percent to 43 percent; and among households headed by a person between 35 and 44, the rate dropped from 69 percent to 64 percent. Among older families, the homeownership rate increased.
Republicans began pushing a broad tax cut for businesses and many individuals through the Senate Finance Committee on Wednesday, a measure complicated by a late addition — repeal of the Obama health care law’s requirement that Americans get insurance coverage.
In the House, a separate version without the repeal element cleared a procedural hurdle, setting the stage for a crucial Thursday vote.
Erasing the Affordable Care Act’s individual mandate provided Republicans with more money that they used to make some tax breaks for people modestly more generous. But it raised questions about whether it might prompt some moderate GOP senators to back away from the measure.
The nonpartisan Congressional Budget Office has projected that dismantling the requirement would mean 4 million additional uninsured people by 2019 and 13 million more uninsured by 2027. Worries about leaving more people without coverage were among the reasons GOP attempts to outright repeal much of President Barack Obama’s law crashed in the Senate this summer.
Republicans controlling the Senate 52-48 can afford to lose only two votes and still push the measure through the chamber, since all Democrats seem likely to oppose the package.
In another money-saving move, Hatch changed his bill late Tuesday to abruptly end the personal tax reductions after 2025. Under Senate rules, if legislation bill drives up federal budget deficits after 10 years it cannot be shielded from bill-killing filibusters by Democrats. It takes 60 votes to end a filibuster, numbers Republicans don’t have.
The corporate tax cuts would be permanent. They include dropping the corporate tax rate from 35 percent to 20 percent.
“Keeping the individual mandate tax in place means retaining the status quo, which isn’t working all too well,” said Senate Finance panel chairman Orrin Hatch, R-Utah. “Zeroing it out means we have a chance to provide greater tax relief to middle-class families, through both reduced penalties and lower overall rates.”
The Finance committee was hoping to approve the measure by week’s end. A separate version of the bill cleared a procedural hurdle in the House on Wednesday on a 235-191 party-line vote. The House is expected to pass its legislation on Thursday.
uh-oh….
A key Senate Republican on Wednesday said he would not support the emerging GOP tax plan and another expressed major reservations about the bill, a thunderclap of trouble for party leaders as they attempt to use a slim Senate majority to pass a major overhaul of the U.S. tax code.
Sen. Ron Johnson (R-Wis.) said he was opposed to the new bill because it disproportionately benefits corporations at the expense of other businesses.
“If they can pass it without me, let them,” Johnson said in an interview with the Wall Street Journal. “I’m not going to vote for this tax package.”
no student loan deduction….
no adoption tax credit….
and now this, repealing Obama-care mandate.
https://www.nytimes.com/2017/11/14/us/politics/tax-plan-senate-obamacare-individual-mandate-trump.html
it just gets better and better.
I agree with you jim on point with making home purchases more
expensive and less actual persons enjoying home ownership. Look for corporations to acquire more housing since they can deduct the interest and all expenses and pay only 20% on any capital gain. The value in the future is going to be based on the amount of rent it can market for as well as the cost of building.
Folks, if you can still buy and get 4% fixed for the next thirty years the overall payment is never gonna be lower…prices can go up and down but over 30 years a 2% increase is 60% more interest expense. Lock and Load if you can in the best neighbor hood yo can afford , at the bottom price for that area.
I’m all for getting rid of deductions and other tax expenditures. Just not in exchange for the top 0.1% receiving a major tax reduction and corporations getting tax incentives that don’t expire. Meanwhile, the rest of the 99.9% get higher taxes over the long term and all the tax reductions expire after 10 years.