Editor’s note: Here’s one that will take a big bite out of our region’s economy, highly dependent on real estate and second home buying. It’s good to see our government getting serious about the deficit, though. Of course, “the devil is in the details.”
At 70, Frank White isn’t a typical first-time home buyer. But a key reason he ditched his Altadena apartment and bought a three-bedroom house in nearby Pasadena has been common for decades: He wanted the tax break.
“I pay very high taxes, and I have no deductions,” said White, who owns an apartment rental business with his two brothers. Now, after purchasing the $500,000 home in November, he’s looking forward to writing off the interest on his 30-year mortgage.
But the longtime tax break could face major changes as Washington policymakers search for ways to reduce the deficit as part of the debate on the so-called fiscal cliff. And that’s sending shivers through home buyers such as White and much of the housing industry.
“My deductions are important to me, what few I have,” White said. “We need to go after the corporations that don’t pay a … cent. Let’s go after those guys first. But leave me alone.”
The home mortgage interest deduction is one of the most cherished in the U.S. tax code. It’s also one of the most expensive, estimated to cost the federal government $100 billion this fiscal year.
The rest of the article is here.
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If there is any way to put the tax burden on the middel class it will happen. Republicans have been spoiled by getting their way for the rich these last 30 years that I really don’t think the middle class stands a chance. It’s unfortunate. I remember when we could deduct interest on our credit card accounts and auto loans. Remember that?
The last time I checked the number of pages in US Tax Code was over 70,000. I think it is time to start over and keep the good and get rid of the rest. The way the tax code has been done is to heap new laws onto old ones, which either adds or subtracts to existing law. It is so convoluted if a person has the means and the passion they could find a way not to pay a single cent towards US or State infrastructure. In my opinion this is theft by putting the burden on others to pay for share of keeping a functional civil society going.