Article at CATO arguing in favor of ending the deduction. Ending this deduction would definitely put a squeeze on some people in the short term, but in the long term it makes sense to me to end it. Perhaps phasing it in would be the best thing to do. Start with second homes, move to homes over $500,000, and then slowly work to everyone over a period of time.
At this point, almost any change that simplifies the tax code is a good change.
[H/T: Insty]
It may simplify the tax code, but do you think the government would lessen its squeeze on the taxpayers who shoulder the lion's share of the burden of supplying the government with its funds? I totally disagree with the writer. What he calls affluent citizens are sometimes those who are actually working people trying to get ahead. They aren't all trust fund kids. Some of them have student loans and are first generation college graduates. They may not have inherited anything. Why penalize them? If they can work and pay for a home by taking out a loan, who are we to take that break away from them? Why suppose that all homeowners aren't doing all they can for their families and also contributing to their communities through volunteering their time and donating their money? Hey, and if they have worked hard enough to pay for a 2nd home, I salute them. Maybe they can get me a deal on a rental...And how difficult is it to fill in some numbers on a tax form for the interest deduction? Years ago we used to be able to claim interest paid on credit cards. Are you trying to put accountants out of work?
ReplyDeleteI agree with you that most people taking this deduction (including me) are not "affluent millionaires", but are just regular folks.
ReplyDeleteIf phasing this deduction out was part of a large overhaul of the tax system that ultimately resulted in lower marginal rates and a flatter tax base, I would support it.