>Remember when you could deduct your car interest payments from your taxes? History!
>
>I heard this morning on the news that President Bush is in the process of reducing or eliminating deductions from home mortgages. That should cool off the market a bit. Coupled with the new bankruptcy laws which go into effect next Tuesday, it will be next to impossible to declare bankruptcy.
>
>Rather interesting – no new taxes but increased revenue due to reduced deductions!
>
>This might put home ownership on a level with renting! However, a new home here costs about $5000 a month, while you pay half that amount to rent an older house.


I have really mixed feelings about this one.

I tend to agree with the idea of using tax policy to support social programs. So having a home-owner's tax deduction seems like a good idea. I'm certain (without any specific facts to back it up) that this deduction has also been revenue positive in the past in that it has generated more economic activity (home building) than it cost in lost tax revenue. And since I also believe in rent subsidy programs for the lower class, I suppose I should also believe in ownership subsidy programs for the upper class.

OTOH, I owned homes in Iowa and Texas and favorable mortgage rates and the relatively low cost of the house meant interest/tax payments did not even meet the standard deductibles. So I saw no tax break from home ownership. With the pricing of housing on both coasts being what it is (a 1400 sq ft house in a not-so-good section of Novato is advertized at $700,000!!!!) the lower and middle classes are precluded from buying anything other than slum houses. The result, a HUGE (especially in CA) tax break for those with the means to qualify for $5,000 mortgage payments. I make a respectable amount of money, but can't even dream of owning anything worth owning without having a two hour plus commute (with no mass transit).

So how do I feel??? I don't know but, for the first time in history, conceptually, I might almost be on Bush's side on this one < gag retch puke >.

And yes, I do know what it would do to millions of home-owners who will no longer be able to afford their house payments. I don't know what implementation ideas he has (I just know history is NOT on his side for having good implementation ideas on anything) and so for the practical impact, I would have to oppose this < that feels a little better >.