You seem to have ducked my 2nd and 3rd questions. Why is that?

And you didn't really answer my first question, either.
1. Property taxes to the municipality.
MID has nothing to do with this.

2. Stability and sense of community.
So if you have a mortgage you are more stable than someone who paid cash? Again - nothing to do with MID.

3. Home ownership builds wealth.
Ha! Only in certain markets. And why should this supposed wealth accumulation be subsidized by MID? And do you really think more societal wealth is built by individuals owning homes as opposed to landlords?

4. Ownership creates equity every month.
Every month? And this is really the same as #3, no?

5. MID.
Only if you have a mortgage ...

6. Home equity lines can be used to pay off other debts while enjoying MID.
So now I should subsidize your leggings and tats as well as your home?

7. Potential capital gains exclusion.
Nothing to do with MID.

8. Long term, buying is cheaper than renting.
Questionable, and highly dependent on individual circumstances. And even when true, is that because of the MID subsidy from other taxpayers?

9. Studies show greater physical and mental well being of home owners.
10. Studies show kids in owned homes do better in school.
11. Greater likelihood of participation in community events, community groups, volunteer organizations.
12. More interest in and participation in local elections.
You're really stretching now! Do you think 9-12 are really benefits of the MID? Or is it more likely that they reflect the socio-economic status of those who can afford a home?

Look, I get that you like the MID. But it costs the rest of us 70 billion or so a year, or ballpark $200 per capita. I can think of a lot of things I'd rather spend that $200 on than people who can already afford to buy a home without it.

I really don't understand how any fiscal conservative can support the MID other than blatant self-interest.

Let me give it a try (where's that darn FC hat?):

If you are a fiscal conservative who thinks that the progressive tax code is far too skewed, almost any policy which reduces the tax burden at the high end is better than none at all. If you are a pro-economic growth conservative, a sustainable policy which results in higher real estate valuations would be good. That is what the MID presently does. Removing the MID would cause short-term economic dislocation, and misallocation of investments, and a fiscal conservative would prefer a less volatile investment environment. A fiscal conservative (and a savvy liberal) normally just accepts the rules as they exist, and adjusts their investments accordingly to take advantage of policies, rather than bellyache.

BTW, JSA is right that home ownership, like marriage, often leads to an entire set of economically "virtuous" behaviors which help teh economy and society as a whole (saving every month, holding a job for decades, staying married, spending on "stuff", etc.). That isn't a case for the MID, but it is a general argument in favor of home ownership.

70% of tax payers take the standard deduction already. I can't remember what Trump wanted to bump it to but I think it was about $25k so the percent would go way up.

Yep, pretty much this. I do wonder, however, you're fairly liberal right? You see this with the MID but do you not also see it with, say, federal student grants and loans, or low income housing assistance?

My wife and I are in the process of buying a house, last night we attended a first-time homebuyer seminar. Many who take these classes in MA do so as a prerequisite to qualify for the various mortgage assistance programs, which have income and mortgage restrictions, which we don't qualify for. Regardless, all these programs help get low income people into homes...which also means that more people are in the housing market, upping competition and inflating home prices. I wonder what the market would look like in MA if, instead of all these low-income programs, people simply bought homes when they could afford it? They keep upping the income and mortgage limits so now you can make $125K (household) and have a $425K mortgage and still qualify for these 'low income' programs...does no one see a problem with this? And people around here wonder why it's an extreme sellers market and houses are selling at $230 a sq ft....

Holy shit! It doesn't "cost" you a fucking thing! It is MY money - not yours, not the government's. "Allowing" a taxpayer to keep more of his/her own money is not a government subsidy. To think otherwise evinces a level of ignorance and/or brainwashing that needs to be eradicated.

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If there are no dogs in Heaven, then when I die I want to go where they went. - Will Rogers

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+1 (and your next post)

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Then lower tax rates and eliminate deductions. The MID is an unnecessary step that doesn't encourage homeownership, it just complicates matters.

I love how Mitt Romney got castigated five years ago for wanting to lower income tax rates and get rid of credits/deductions; his great mistake was being realistic and saying 'I don't know what credits and deductions we can eliminate, that'll be up to Congress and negotiations we'll have'. God forbid someone state the obvious that our tax code is a fucking disaster and should be drastically simplified.

Even if the net effect is zero to tax receipts, it'd save tax PAYERS billions in accounting fees and time.

Society has seen home ownership as desirable for a long time. There is the belief that communities of home owners are better and more involved members because they have a vested interest in the area. Most Americans do not save enough so building equity by paying down a mortgage can be seen as a way to increase savings. Homes were also seen as an investment that only increases in value. Because of all these arguable benefits home ownership has been encouraged with government loans, loan guarantees and tax deductions for property taxes, home expenses and mortgage interest. I benefit more than most with the mortgage interest deduction. I have a larger house than I would otherwise because my in-laws live with us and I needed large enough a home for everyone to be comfortable and have their own space. It would be painful for me to loose this deduction. Perhaps the best compromise would be to only allow the first $10,000 of interest, property taxes and points to be deductible. That way middle class homeowners who rely on the deduction to make home ownership affordable could still get it.

He probably lost all tax accountant donations from that. Imagine how many poor tax accountants would be laid off if they actually simplified the tax code.

Fuck 'em. I work in IT for a financial accounting company, part of it is tax accounting. We spend 80% of our time on regulatory nonsense. Strip out the noise, simplify it, lower income tax rates and make it all easier on everyone. It's insane how much money we spend on accounting and regulating our tax collecting system. I'd be in favor of eliminating the IRS and totally gutting the whole system, creating a flat consumption tax, but since that's a pipe dream we need to at least make it so a normal person can pay their taxes without an advanced degree in accounting.

It's so complicated at this point that the only real way to simplify the tax code is to scrap it and re-write. every deduction, exclusion, credit, AMT or whatever else was originally put into the code for a reason, whether to close a loophole, encourage certain types of investments, or just increase government revenue.

It would be a massive project to get agreement on what the tax code should actually be, probably spanning several election cycles, which is why it won't get done.

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Or do as the Canadians do and eliminate the MID but create a tax exemption for the sale of your principal residence.

But isn't this pretty much exactly what needs done? The US has glommed everything in the world into the tax code. When you hit 'send' I think most people are like me, "I hope I didn't screw that up too badly and either cost myself thousands or send my ass to jail." It shouldn't be that way.

We really do need to simplify. Going to three rates or one rate doesn't do that. You need to rewrite it. You still have to go to a chart to see what your tax burden is for your income, I'm really good at arithmetic but I'd still use the chart to figure out my 15% flat tax if that was what it is.

One of my long time bitches is that not a single person in the US knows what they pay in all taxes every year. Can't be done. My gut feeling is that my overall personal tax rate isn't too high. But how would I know if I don't know how much I pay in all taxes. I might see the number and shit a brick, decide to cut off hungry children from food stamps and start dragging sick people into the street to die.

It is much like a computer program that has been around for 100+ years with 20 generations of developers working on it. No one knows exactly what it does and when you go to make a change or fix you slap it in somewhere and just hope it doesn't screw it up too badly.

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I'm beginning to think that we are much more fucked than I thought.

So true, the average mortgage balance in the US is under $150,000. At 5% interest, that means the average person has less than $10,000 of interest deduction from their mortgage.

The only reason the mortgage deduction will remain is because there are millions of dollars given to politicians from special interest groups.

Again: WHY??? Who is making home-buying decisions based on some tax exemption that saves a few grand? All these feel-good 'incentives' to do things the 'right' way are fucking stupid, they just complicate tax systems. I can guarantee you that for every page of the 74,000 page tax code it costs taxpayers at least 100 million dollars in either federal spending, to enforce that page of regulations, or lost GDP due to company and individual compliance costs.

Eliminate deductions and credits, eliminate every line of carve-outs and exemptions, create a simple tiered system and make tax collecting, accounting and regulating simple for everyone.
https://www.mercatus.org/...costs-tax-compliance

The study finds that Americans face up to nearly $1 trillion annually in hidden tax-compliance costs, while the Treasury forgoes approximately $450 billion per year in unreported taxes.

FUCK. THAT.

Exactly...and as anyone who's tried to re-write old code knows, you're better off abandoning the old system and starting over, because the current mess is unworkable. 74 THOUSAND PAGES, and if you read any one of them you'll feel like crawling into a hole and giving up. There's a whole system in place to interpret the code (tax accountants), another whole system related to enforcement and compliance (IRS), companies like H&R Block and PWC that are there precisely for individual and corporate tax compliance purposes, the thousands and thousands of lawyers who help individuals when the compliance monster comes calling, and all the periphery services and systems like TurboTax and TaxSlayer for individuals, my company for corporations.

It's all INSANE, and it costs all of us huge, huge money, people have no idea just how much this whole compliance and collection system we have in place costs us.

the tax exemption on cap gains on principal residence is a good thing IMO, because it allows you to keep your money and roll it into your next home when you sell, even if you don't immediately purchase a new home. Otherwise, the tax bill on selling a house would be ginormous.

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WTF is wrong with this guy? In short, the author is saying tax deductions are unfair to poor people because they don't get to reap the benefits BECAUSE THEY DON'T PAY ANY INCOME TAXES.

The article is so illogical it's almost hard to respond. You can tell me you don't like the tax structure. You can complain that the rich aren't paying their fair share. But don't try and tell me that the tax structure is unfair for the people who don't pay taxes.

So true. And as far as I am concerned the problem with home affordability is the stupid low interest rates we have had for about forever now to prop up crummy economies.

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Dreaming of systems so perfect that no one will need to be good T.S. Eliot

Eh, you and I disagree on this piece of it in principal though...I don't think cap gains should be taxed at all. I already paid taxes on that money, I paid taxes on my home purchase, I pay local and state taxes for the property I own. If that property appreciates in value then I should reap the benefits, just like if it loses value I'm underwater.

I totally disagree with the principal of pay taxes on something I've already paid taxes on.

And on the flip side, cheering for really affordable housing via policies that would cause a housing collapse is hardly a step forward. The economy is hardly "crummy", no matter how emphatically whiners on this board pound their chests. The MID could certainly be unwound (as could many policies), but virtually every market in the world is primed and limited by free market forces and government policies. Unwinding long-standing policies that have driven investment for decades requires more impartial judgment.

When I worked as a fund accounting we sent off boxes and boxes of our daily and monthly accounting books to be stored, then at tax time we'd recall them for the PWC auditors to look through, and we'd send the hundreds of pages of fiscal YE stuff to the client for their tax department. Every company, seven years of all that data, and I just worked on one small account while I was there. Now that I work on the IT side I see just how many of our resources--people and projects--are dedicated to compliance/regulatory changes, we charge our parent company and clients millions every year for the tax changes we make, they spend millions testing and implementing, etc etc. Just to make sure that corporation are in compliance, I can't even imagine what it's like on the personal accounting side.

But you aren't, you are only paying on profit derived from that investment. BTW, the word is "principle" and (funny enough), you pay zero tax on the "principal".

P.S. Off-topic, both the student loan program and many/most housing subsidies are extremely flawed. Not having any program at all is also extremely flawed. While we can dream that zero government intervention would fix everything, our present partisan gridlock keeps flawed programs from being fixed or replaced.

Ok, but when these issues come up and we conservatives say 'see how much compliance costs? See the cost of the regulatory burden? See the unintended consequences?', the argument against is always 'it'll hurt poor people'.

Except the market is already fucked up because of policy intended to help poor people. All these bubbles that slowly percolate or burst entirely started as a means to help low- and moderate-income people. And then it cost a lot of people and companies a lot of money on compliance. And then the market was off-balance because of the new policy so it naturally corrected itself, usually with higher prices for the goods/services/market that's been impacted. Then tweaks/new policy was implemented to support the old one that wasn't working so well any more. Wash rinse repeat.

So this is why I'll never support these government efforts to 'help the poor'. They don't work, poor people remain poor after the market corrects and everyone else suffers because of it.