The vast majority of people complain about their taxes. I have plenty of clients that pay more tax than I make. Some I honestly think do get screwed over, because Congress hates single people with no kids that don't own a house. Others just make me angry when they complain about it. I can't complain. My federal income tax over my working life so far totals about ($6,000), so I've profited.
The loopholes in the tax code are what let the wealthy pay less. Simplifying and removing deductions - which benefit the wealthy FAR more than the middle class - is exactly the way you increase revenues without raising rates. Right now, a mortgage interest deduction saves a wealthy person $0.35 on the dollar, while it saves a middle class person $0.25, while it saves a non-itemizing person $0.00. Limit that and you broaden the base from which tax is collected.
I think that depends on where you live. 500K in Los Angeles really doesn't get you what you would expect. A lot of lower-middle class people with 500K mortgages here. If they have a couple of kids going to college, etc. - then a a tax hike could be worrisome. On a philosophical level or moral level - I would be okay with eliminating the deduction totally (and I would be hurt by it). It could be unfair, though, to people who assumed the tax deduction as part of their normal income. So living in SoCal, I think a 500K cap is not too high. I would get rid of it for HELOCs though. Most people spent their HELOC on SUV's, vacations, etc.
wow what a ignorant post.. I think bbob and another poster above me is incocrect. You are clearly ignorant on what is the norm in a city like New York, LA, SF, or SD. So please dont comment on something that you clearly have no idea about and stop being self centered and basing everything off of you and your experiences. We do not have a choice. This is where our jobs are and what continues and and contributes to the economy. Stop being so narrow minded. Just because you cant afford a 500k home or you cant imagine owning a 500k home it doesnt mean there are not issues around it. A 500k home is the norm out here. A 500K home only buys you a 3 bedroom 1400 square foot home in the suburbs or a even smaller condo near the city. Almost all my coworkers, families, friends etc, etc all have homes or mortgages worth at least 500k. All these people have to work their butts off to support their families and any tax increase is definitely going to make tought times even worse.
i agree with you.. from the plan described in the article it does seem like the rich gets a reduction in their tax braket and alot of the middle class which rely on mortgage deductions, etc get screwed. Hmm doesnt make much sense to me.
What do you not understand about having many more options when you are wealthy? When you are a multi billion dollar company, you can navigate your company around the pitfalls that are brought before them. We are already sending millions of jobs overseas. Why not send all of our multi billion dollar corporations too? In the end, its those who can not afford the squeeze who take the biggest hit. Raising taxes and closing loop holes will not fix the problem. It will not generate significant revenue and it will not reduce the deficit. For every dollar raised, our government will spend 2. Does it really make sense to turn on the greedy corporations to feed the greedy corrupt government because it fits your ideological side?
how much money would you say those people in those $500K homes make. just curious, i always wondered how the average person can live in a place like san diego
A 30 year $500,000 loan at 5% interest has a monthly payment of around $2700. Making $150,000/year (before taxes) should allow you to comfortably make that payment.
avg salary out here in San Diego I believe is around 45k with the median house hold income around 55k. People live out here paycheck to paycheck. I believe the people making this amount buy the condo's in the 250k-350k range. Half their paycheck goes to their mortgage and the rest to food and other expenses. It's definitely tough for a lot of folks living out here in San Diego. The people that buy the 500k+ homes are just your average engineers, sales, biotech industry jobs that make anywhere from 65k-110k a year. With a 500k mortgage about half your paycheck still goes towards your mortage.
Spending cuts could also help the economy if the cuts are targeted intelligently. An example I made up. You are over your head in debt so you decided to cut back on expenses. Sounds wise. So you kick your wife's freeloading brother out of the motel he has been living in on your dime and make him move to the cheaper youth hostel, which you are still willing to pay for. Hell, while you are at it you also elect to switch his insurance (which you also pay for) from a plan that lets him pick his own doctor from most any doctor available to one with a more limited selection (though the doctors are still board certified). You'll notice that my example is actually in support of the assertion I made, instead of an attack on a straw man. That would have been something along the lines of: You are over your head in debt so you decided to raise revenues. Sounds wise. So, after work you went over to your wealthier neighbor's house a took the money out of his wallet that he had left on his table. The only difference is, my straw man is much more in line with the actual Democratic ideal than your straw man is in line with the Republican plans that are being discussed.
A 500K home is the cost of a VERY SMALL single family home in the subburbs. How many people make 150k out here? The avg household income is only 55k out here. Also dont forget to add property tax, HOAs, utlities to your monthly cost. I would say the cost of home ownership for a 500k home (loan) is approaching 3200-3500 a month. Plus again not everyone makes 150k. I am guessing the person that buys the 500k is making a house hold income of rougly 100k/year Let's say after income taxes (state income tax is another 10% in CA), social security, etc your take home pay is rougly 65k-75k. That's ~5500-5700 a month. So more than half of your paycheck goes towards maintaing a place to live for you and your family. Then throw in you are supporting your kids, college funds, retirement, emergency funds, etc etc its really not living that comfortable if you ask me.
A lot of people would also cite the deduction as a MAJOR factor in buying a house in the first place. They may only be a couple of years into their mortgage (perhaps also encouraged by Obama 8K tax credit). To completely take away the deduction would be grossly unfair to those people. I do agree that since we are headed down the "austerity" path, that a cap can make sense. The difficulty is finding a fair one-size fits all number.
This is the Republican ideal. Imagine we are a business. Ok? So, instead of looking of ways of increasing our revenue, we say that the only way we can make money is to cut expenses! So we fire half our staff, and suspend those pesky liability plans. OH S***, the other half of our staff was involved in a traffic accident? Now we are screwed. But at least we stuck to our arbitrary stance of not increasing revenues at all, no matter what.
Did I write anything that wasn't true? I simply responded to a question pgabriel asked. Someone making $150,000 a year should be able to comfortably handle a $2700 monthly house payment. Someone making $100,000 would not necessarily be able to comfortably afford that payment.
Sounds like bad decision making if people making that much are paying that much for housing and have all of those obligations.
