We're doing a mortgage refi at 3.75% -- someone tell me why that interest should be deductible?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, can we PLEASE not hear that ridiculous "40% of Americans pay nothing in taxes" line ever again? This is one of the most educated regions in the country, people. THINK.

In 2011, 46% of households paid nothing in federal income taxes. Why is it wrong to say so?

Those people still pay sales tax, and in some, but not most cases, state taxes. So they have some taxes, but not federal income taxes.

And in Virginia they pay sales tax on food they buy at a supermarket. That just doesn't seem right.

I didn't realize how high the sales tax rate is in most states. For example, if you live in Texas, you are paying a little over 8%. If you are poor, you are paying that on all of your disposable income because you aren't in a position to save.

I believe Texas has no state income tax.

In terms of income vs. payroll taxes: the distinction is pretty important, because those streams of funding are devoted to very different ends. Payroll taxes are not used to build shared capital and infrastructure, so as a matter of policy it is quite questionable to have a growing portion of citizens not contributing to a common future.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes, can we PLEASE not hear that ridiculous "40% of Americans pay nothing in taxes" line ever again? This is one of the most educated regions in the country, people. THINK.

In 2011, 46% of households paid nothing in federal income taxes. Why is it wrong to say so?

Those people still pay sales tax, and in some, but not most cases, state taxes. So they have some taxes, but not federal income taxes.

Mainly because it is a straw man argument.

The payroll tax burden is very real. And since revenues collected from payroll taxes are currently used to pay for the operations of government, they are de facto income taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, can we PLEASE not hear that ridiculous "40% of Americans pay nothing in taxes" line ever again? This is one of the most educated regions in the country, people. THINK.

In 2011, 46% of households paid nothing in federal income taxes. Why is it wrong to say so?

Those people still pay sales tax, and in some, but not most cases, state taxes. So they have some taxes, but not federal income taxes.

And in Virginia they pay sales tax on food they buy at a supermarket. That just doesn't seem right.

I didn't realize how high the sales tax rate is in most states. For example, if you live in Texas, you are paying a little over 8%. If you are poor, you are paying that on all of your disposable income because you aren't in a position to save.

I believe Texas has no state income tax.

In terms of income vs. payroll taxes: the distinction is pretty important, because those streams of funding are devoted to very different ends. Payroll taxes are not used to build shared capital and infrastructure, so as a matter of policy it is quite questionable to have a growing portion of citizens not contributing to a common future.

Except, in a very real way, they are. Yeah, I know, there are IOUs in there. But government wouldn't operate without payroll tax revenue.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, can we PLEASE not hear that ridiculous "40% of Americans pay nothing in taxes" line ever again? This is one of the most educated regions in the country, people. THINK.

In 2011, 46% of households paid nothing in federal income taxes. Why is it wrong to say so?

Those people still pay sales tax, and in some, but not most cases, state taxes. So they have some taxes, but not federal income taxes.

Mainly because it is a straw man argument.

The payroll tax burden is very real. And since revenues collected from payroll taxes are currently used to pay for the operations of government, they are de facto income taxes.

The payroll tax burden is indeed very real. As is the federal income tax one - at least for the people who 1) do have to pay it and 2) are not wealthy enough to live off capital gains. It is you the one engaging in straw man arguments by ignoring this fact and implying previous PPs said 50% people pay no taxes at all. No one here has said that.

[Anonymous]

It's not that it should be or it shouldn't be. It just is. It's a tax break because the Fed. government wanted to increase home ownership.
Now, if they take away the deduction, housing prices will crash as people wouldn't be able to afford as much.

[Anonymous]

IMO the mortgage dedication is powerful as a psychological motivator for home ownership. (Heck, we hit the AMT so a mortgage dedication of 4% on a smaller downpayment because we've paid most of the house off and re-financed isn't much money at all. ) The mortgage deduction leads to individuals believing that owning a home is a better financial move than renting. Home ownership tends to create more stability, less crime, better communities, more involvement in schools etc etc.
The mortgage deduction also leads into the comfort of borrowing more for a home. State's depend heavily on property taxes which are determined by house value.

As an individual incentives toward renting would make us more agile, more able to pick up and move to another part of the country, or follow various job opportunities for a year or two. It could actually be better for us as individuals but the communities and states would suffer with an increased transient population.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes, can we PLEASE not hear that ridiculous "40% of Americans pay nothing in taxes" line ever again? This is one of the most educated regions in the country, people. THINK.

In 2011, 46% of households paid nothing in federal income taxes. Why is it wrong to say so?

Those people still pay sales tax, and in some, but not most cases, state taxes. So they have some taxes, but not federal income taxes.

In 2010, the top 50% of of tax payers made 87% of this nation's income. The bottom 50% (whose adjusted gross income was less than $33K/year) took in only 12% of this nation's income. The top 1% of income earners had an effective tax rate of 23% in 2010, while the middle class had an effective tax rate of 16-20% Why are you harping on those who make nothing for not paying their fair share?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, can we PLEASE not hear that ridiculous "40% of Americans pay nothing in taxes" line ever again? This is one of the most educated regions in the country, people. THINK.

In 2011, 46% of households paid nothing in federal income taxes. Why is it wrong to say so?

Those people still pay sales tax, and in some, but not most cases, state taxes. So they have some taxes, but not federal income taxes.

In 2010, the top 50% of of tax payers made 87% of this nation's income. The bottom 50% (whose adjusted gross income was less than $33K/year) took in only 12% of this nation's income. The top 1% of income earners had an effective tax rate of 23% in 2010, while the middle class had an effective tax rate of 16-20% Why are you harping on those who make nothing for not paying their fair share?

See:
http://www.usatoday.com/money/economy/story/2011-10-06/income-tax-nonpayment/50676912/1

"WASHINGTON – Amid complaints that nearly half of tax filers in the U.S. won't pay federal income taxes this year, this has been lost: Those making $75,000-$100,000 a year are the fastest-growing share of people who don't pay federal income taxes.

Last year, some taxpayers mailed their returns at the last minute to the IRS. Others paid nothing at all.

Not working poor people — but those who are firmly middle class. They still make up less than 1% of the total number of income tax filers who pay no tax at all, but their overall number has exploded, from fewer than 5,000 not paying taxes in 1996 to nearly 500,000 in 2009, the most recent year of available data."

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, can we PLEASE not hear that ridiculous "40% of Americans pay nothing in taxes" line ever again? This is one of the most educated regions in the country, people. THINK.

In 2011, 46% of households paid nothing in federal income taxes. Why is it wrong to say so?

Those people still pay sales tax, and in some, but not most cases, state taxes. So they have some taxes, but not federal income taxes.

In 2010, the top 50% of of tax payers made 87% of this nation's income. The bottom 50% (whose adjusted gross income was less than $33K/year) took in only 12% of this nation's income. The top 1% of income earners had an effective tax rate of 23% in 2010, while the middle class had an effective tax rate of 16-20% Why are you harping on those who make nothing for not paying their fair share?

See:
http://www.usatoday.com/money/economy/story/2011-10-06/income-tax-nonpayment/50676912/1

"WASHINGTON – Amid complaints that nearly half of tax filers in the U.S. won't pay federal income taxes this year, this has been lost: Those making $75,000-$100,000 a year are the fastest-growing share of people who don't pay federal income taxes.

Last year, some taxpayers mailed their returns at the last minute to the IRS. Others paid nothing at all.

Not working poor people — but those who are firmly middle class. They still make up less than 1% of the total number of income tax filers who pay no tax at all, but their overall number has exploded, from fewer than 5,000 not paying taxes in 1996 to nearly 500,000 in 2009, the most recent year of available data."

If Congress wants to eliminate tax breaks for middle class families, or cap the total deductions, I'm all for it. I think we should be clear about two things:

1. The source of the problem is tax credits and deductions, not the income tax rate. This is a bipartisan issue that has nothing to do with tax rate fairness.

2. The total dollar amount of the problem of those 476,624 people in the 75-100K bracket with zero taxes is at most a $7 billion issue.

3. The thing that is designed to prevent this particular problem at upper incomes is the AMT. Yet the same conservatives complaining about taxes hate the AMT. So effectively you complain about the number of people getting off without paying taxes due to excess deductions, AND you complain about the thing that keeps people honest about deductions. Which is it???

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, can we PLEASE not hear that ridiculous "40% of Americans pay nothing in taxes" line ever again? This is one of the most educated regions in the country, people. THINK.

In 2011, 46% of households paid nothing in federal income taxes. Why is it wrong to say so?

Those people still pay sales tax, and in some, but not most cases, state taxes. So they have some taxes, but not federal income taxes.

In 2010, the top 50% of of tax payers made 87% of this nation's income. The bottom 50% (whose adjusted gross income was less than $33K/year) took in only 12% of this nation's income. The top 1% of income earners had an effective tax rate of 23% in 2010, while the middle class had an effective tax rate of 16-20% Why are you harping on those who make nothing for not paying their fair share?

See:
http://www.usatoday.com/money/economy/story/2011-10-06/income-tax-nonpayment/50676912/1

"WASHINGTON – Amid complaints that nearly half of tax filers in the U.S. won't pay federal income taxes this year, this has been lost: Those making $75,000-$100,000 a year are the fastest-growing share of people who don't pay federal income taxes.

Last year, some taxpayers mailed their returns at the last minute to the IRS. Others paid nothing at all.

Not working poor people — but those who are firmly middle class. They still make up less than 1% of the total number of income tax filers who pay no tax at all, but their overall number has exploded, from fewer than 5,000 not paying taxes in 1996 to nearly 500,000 in 2009, the most recent year of available data."

Please. People who are whining about the 46% of American not paying federal income taxes aren't concerned about the middle class non-payers when they vomit that stupid statistic all over the place. They are (in their minds) referring to the big, bad poor people who aren't paying income taxes and are getting welfare all while paying for their ipads and alcohol. And they CERTAINLY aren't referring to the millionaires who get off with a 0 dollar tax bill.

[Anonymous]

Stop being poor Or place a restriction on how long you can pay zero and get money back, problem solved. Most asian immigrants can do it in one generation.

[Anonymous]

Millionaires pay huge amount of taxes , 10% of millions in investments is much more than 30% of 250k. If anything the incentive to invest and put that money in the stock market help slow joe the government worker's tsp plan.

[Anonymous]

Millionaires pay huge amount of taxes , 10% of millions in investments is much more than 30% of 250k. If anything the incentive to invest and put that money in the stock market help slow joe the government worker's tsp plan.

[Anonymous]

Anonymous wrote:IMO the mortgage dedication is powerful as a psychological motivator for home ownership. (Heck, we hit the AMT so a mortgage dedication of 4% on a smaller downpayment because we've paid most of the house off and re-financed isn't much money at all. ) The mortgage deduction leads to individuals believing that owning a home is a better financial move than renting. Home ownership tends to create more stability, less crime, better communities, more involvement in schools etc etc.
The mortgage deduction also leads into the comfort of borrowing more for a home. State's depend heavily on property taxes which are determined by house value.

As an individual incentives toward renting would make us more agile, more able to pick up and move to another part of the country, or follow various job opportunities for a year or two. It could actually be better for us as individuals but the communities and states would suffer with an increased transient population.

I just learned this afternoon, that in Germany, people prefer to rent rather than to buy. They have 40% home ownership compared to 70% in the United States. All in all the Germans are doing better than a lot of countries economically. While I would need to know more, that suggests the possibility that it's not just renting that makes communities more transient.

[Anonymous]

Anonymous wrote:

Anonymous wrote:IMO the mortgage dedication is powerful as a psychological motivator for home ownership. (Heck, we hit the AMT so a mortgage dedication of 4% on a smaller downpayment because we've paid most of the house off and re-financed isn't much money at all. ) The mortgage deduction leads to individuals believing that owning a home is a better financial move than renting. Home ownership tends to create more stability, less crime, better communities, more involvement in schools etc etc.
The mortgage deduction also leads into the comfort of borrowing more for a home. State's depend heavily on property taxes which are determined by house value.

As an individual incentives toward renting would make us more agile, more able to pick up and move to another part of the country, or follow various job opportunities for a year or two. It could actually be better for us as individuals but the communities and states would suffer with an increased transient population.

I just learned this afternoon, that in Germany, people prefer to rent rather than to buy. They have 40% home ownership compared to 70% in the United States. All in all the Germans are doing better than a lot of countries economically. While I would need to know more, that suggests the possibility that it's not just renting that makes communities more transient.

I fail to follow the logic here. Help, please?