Wednesday, November 9, 2005
Real estate change?
Yesterday, twice, I was told about a rumor that real estate taxes and mortgage payments either are being eliminated or reduced. If so and if it's just in New York State, then it seems like another zap to the financial well-being of New York residents. If it's country-wide, then it seems nothing less than insane. One of the things that makes Americans strong is the ability to earn our own money and buy our own property without giving fifty percent or more to the state to take care of us. Independence (financial and otherwise) is a cherished underlying principle for most of this country's citizens. So I wonder who's floating this idea/rumor and what's really behind it.

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Permalink | | posted by jau at 9:05 AM


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Anonymous Anonymous — at 7:46 PM, November 09, 2005:
It's a proposal by the President's advisory panel on Tax Reform, formed earlier in the year. Search on news.google.com for 'mortgage deduction' and you'll find a lot of reading. Here's one article:

http://www.sun-sentinel.com/business/sfl-ybreal07nov07,0,1572889.story?coll=sfl-yourmoney

The above does imply that it could in part be a tax increase in disguise:

The panel says that more people will benefit from a tax credit because taxpayers don't have to itemize to take advantage of it. That, the panel claims, will make owning a home more affordable. But with the mortgage interest deduction costing the federal government about $76 billion in tax revenues next year, according to congressional estimates, the elimination of the deduction will also help trim the federal budget deficit and cover some of the nation's costs for Hurricane Katrina and the war in Iraq.

You could do your taxes both ways, I guess, and decide what the effect on your own circumstance would be. Probably mostly driven by what part of the country you live in, some markets $400K is a relatively modest home, whereas in others it might be among the pricier homes. Probably worthwhile to read multiple opinions among the search results and look for actual analysis...
 

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Blogger jau — at 8:39 AM, November 10, 2005:
Thanks! Lots of reading ahead. You don't sound horrified so maybe I shouldn't be either. I'll try to reserve a reaction until I read more. Thanks again.
 

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