standard boilerplate: November 2005

[mattp]

Like I said, Jay, I could be wrong about my assumption that the mortgage deduction proportionally benefits the middle class more than the wealthy, and your first reference appears to make good arguments about how the deduction is larger for wealthier families and may even encourage people to buy bigger homes or borrow more than they should, but neither of your references actually disputes my guess that, as a percentage of income and considered in comparison to other tax planning measures (both with respect to earned and unearned income), the mortgage deduction is probably more important to the middle class. Both references seem to make a good argument that the mortgage deduction costs the US a lot.

 

I'm not a tax policy expert, but my wealthy clients all seem to have bigger fish to fry.

[chucK]

JayB,

Home ownership is the AMERICAN DREAM. You don't believe in removing some burden for good folks in the pursuit the American Dream? Love it or leave it, I say.

 

I like the current proposal. Though it does not completely remove the deduction as you are hoping. It only caps the amount of interest you get to deduct. Does make the mortgage deduction more progressive. I seriously doubt GWB is going to get behind this plan as it reeks of "tax the rich". Though he will probably sell his opposition as helping us middle-class folks like him.

 

 

----------------------------------------------------

Some critique of your posted article. Apologies in advance for the cherry-picking.

 

"There's a cancer at the heart of our increasingly complex tax code."

 

First, the mortgage deduction is not complex. You get a statement from the bank saying how much you spent on interest and property taxes, and you put that on schedule A. For me, that is basically the only thing on schedule A. Oooooh, tough stuff! I sure hope they take this away, so I don't have to wrangle with that sched A form .

 

Plus, what the current reform plan proposes is to limit the deduction. You still get a deduction but under the new plan you would have to make sure that you were under a certain level. Sounds like more complexity to me.

 

I think it's a cynical ploy used by the flat tax people and other tax "reformers" to exploit the common peoples' (those without access to accountant) fears of the complex form, in order for them to give up their tax advantages.

 

The home mortgage deduction is among the single largest such incentives.

 

"among the single largest such"

Note bolded words. Remove the bolded words and you've got a very strong-sounding statement. The bolded words were probably put in to change it from an out and out lie to merely misleading.

 

 

"Clearly, we've gotten some bang for all these bucks. The United States has an enviably high rate of home ownership and a highly developed infrastructure—secondary markets in mortgage-backed securities, online mortgage companies, etc.—that supports the construction and purchase of homes."

 

Sounds good to me! It's the American dream!

 

But the once-modest deduction has evolved into a very large and highly inefficient rent subsidy. The deduction plainly causes distortions. People are willing to pay more for houses and buy bigger houses than they otherwise would because they can deduct the interest from their taxes.

 

This may be true. I think the current plan would be good. It would remove this aspect of the mortgage deduction (if it's true anyway).

 

Then there are home-equity loans. The proceeds from home-equity loans can be used to pay for an addition or repairs, but also for a television or for a trip to Jamaica. And the taxpayer foots a portion of the bill. What does this have to do with encouraging homeownership?

 

I'm unsure of whether this part should be removed. Home equity loans can be used to resurrect an unlivable home. I can see, though, how this could be subsidizing people spending money elsewhere in the economy. Oh the horror!

 

Taxpayers who don't itemize deductions—generally people in the lower income brackets—don't receive any benefit from the home-mortgage deduction.

 

This is a crock of shit. I itemize solely because I have the home-mortgage deduction.

 

And the more you borrow, and the higher your tax bracket, the more valuable the deduction becomes.

 

This would be taken care of with the current proposal which caps only the higher end deductions.

 

Losing the deduction would have the same effect on his personal finances and mentality as a rise in mortgage rates from 6 percent to 8 percent would. A bummer? Certainly. But such moves have happened frequently without causing crises. And if the elimination of the deduction were accompanied by a reduction in rates elsewhere, it would be a wash for many homeowners."

 

Something tells me that middle class people would not be getting rate reductions elsewhere. And what about the effect on the middle class person's main investment, their home? Surely that is going to lose value, perhaps precipitously unless this is done very carefully.

 

" And so it's no surprise that earlier this year, when President Bush penned instructions to the advisory panel on tax reform, he told them to "recognize[e] the importance of homeownership."

 

So you going against GWB there JayB ! Even more shocking, perhaps I am agreeing with GWB!!! Somehow, however, I don't think GWB is going to be supporting the current proposal of capping the deduction for only the huge mortgages.

[JayB]

Do you think the present policy is consistent with your beliefs about what constitutes a fair and just tax code?

 

I am not personally concerned about people's philosophical notions of what constitutes fairness, and focus instead on what I think will lead to optimal economic growth, gains in real-income, and maximum government revenue with minimum market distortions - so I'm not really attacking it from that angle, just pointing out that people who are in favor of progressive taxation have also criticized the mortgage deduction.

[chucK]

I think fair and just is one person, one vote.

 

It amazes me how so many people vote for politicians whose primary goals include redistributing wealth away from those voters.

 

I mainly favor "progressive" strategies because of self interest. Though repugnance of letting people die in the street is part of my equation, the practical side is that I'd like my environment to not be a jungle where I need to carry a gun just to keep desperately poor people from trying to rob/kill me for subsistence.

 

I guess I fall in the "teach a man to fish, and you'll feed him for a lifetime" crowd, rather than the current conservatives who seem more like the, "if we take away his food, he'll have to learn to fish, or die" type.

[archenemy]

So, how long is your guys' commute?

[chucK]

[Crux]

...These people are pigs.

Best served well done. (BBQ now in progress.)

[cj001f]

So, how long is your guys' commute?

It's the 12 hr commute to vacation that has been anxious.

[mattp]

If the Democrats and foreign leaders and anybody else with any integrity can't stand up, in response to Bush's speech this morning, and point out how he continues to lie about his efforts to lead us into the Iraq war, the fact that the Democrats saw "the same intelligence as I did," the relationship of this war to a global effort to control terrorism, the arguments of those who criticize him for lack of a plan, and (almost certainly) his/their intentions now, they are irresponsible pathetic losers.

[JayB]

Iraqi insurgents urge Sunnis to vote, warn Zarqawi

Sun Dec 11, 2005 6:03 AM ET

 

 

FALLUJA/RAMADI Iraq (Reuters) - Saddam Hussein loyalists who violently opposed January elections have made an about-face as Thursday's polls near, urging fellow Sunni Arabs to vote and warning al Qaeda militants not to attack.

 

In a move unthinkable in the bloody run-up to the last election, guerrillas in the western insurgent heartland of Anbar province say they are even prepared to protect voting stations from fighters loyal to Abu Musab al-Zarqawi, leader of al Qaeda in Iraq.

 

Graffiti calling for holy war is now hard to find.

 

Instead, election campaign posters dominate buildings in the rebel strongholds of Ramadi and nearby Falluja, where Sunnis staged a boycott or were too scared to vote last time around.

 

"We want to see a nationalist government that will have a balance of interests. So our Sunni brothers will be safe when they vote," said Falluja resident Ali Mahmoud, a former army officer and rocket specialist under Saddam's Baath party.

 

"Sunnis should vote to make political gains. We have sent leaflets telling al Qaeda that they will face us if they attack voters."

 

The shift is encouraging for Washington, which hopes to draw Sunni Arabs into peaceful politics in order to defuse the insurgency.

 

The Baathist warning to al Qaeda raises the possibility of a wider rift between secular Saddam loyalists and fundamentalist militants, who have been cooperating in their efforts to drive out U.S. forces.

 

But it is far too early to suggest any breakthroughs will ease insurgent violence that has killed thousands.

 

Some insurgent leaders appear to be setting conditions for Sunni voters, who will choose from among 231 political parties and coalitions for a parliament that will appoint the first full-term government in postwar Iraq.

 

GRUDGING BACKING FOR POLLS

 

Former Baathists who have embraced militant Islam, like Jassim Abu Bakr, are still fiercely opposed to U.S.-backed leaders and say any Sunni politicians who move too close to them will lose their support.

 

"We are telling Sunnis that they have to vote for nationalist parties and even if they win we will be watching very closely to keep them in line," said the Falluja militant, 28.

 

In Falluja, renowned as Iraq's "City of Mosques", Sunni Muslim spiritual leaders made clear there would be no repeat of the boycott of January's election which left their minority angrily marginalised.

 

Fiery speeches delivered in Friday prayers have been toned down, with increasing calls for Sunnis to vote.

 

Iraq's election commission said on Sunday there would be 154 polling stations open in Anbar next Thursday, far more than in the election in January. Eighty-four of them will be in Falluja and the surrounding area, it said.

 

Most election posters back two Sunni politicians, Saleh Mutlak and Adnan al-Duliami. Iyad Allawi, a secular Shi'ite and former prime minister who ordered a U.S.-led offensive that devastated Falluja last year, has some appeal, insurgents said.

 

The influential Sunni Muslim Scholars Association urged their large community to boycott the "illegal" polls in January.

 

Nearly one year on, the group has so far been officially neutral but some of its members have called participation in the polls a "religious duty".

 

Ramadi remains a trouble spot. Just a few days ago U.S. helicopters were exchanging fire with determined insurgents.

 

But Saddam loyalists have turned against Zarqawi, a Jordanian militant whose fighters travel to Iraq from across the Arab world to blow themselves up in a bid to spark sectarian civil war.

 

"Zarqawi is an American, Israeli and Iranian agent who is trying to keep our country unstable so that the Sunnis will keep facing occupation," said a Baathist insurgent leader who would give his name only as Abu Abdullah.

[Squid]

Wow, a rousing success of American foreign policy. Definitely worth the lives of thousands of American troops.

 

A bargain at any price.

[mattp]

Yeah. Mission accomplished. I guess we can go home now, right Jay?

[JayB]

Sorry to ruin your hollidays/ongoing narrative with such negative news.

 

Might as well get all of the depressing stuff out of the way at once though.

 

"Survey finds hope in occupied Iraq:"

http://news.bbc.co.uk/2/hi/middle_east/3514504.stml

 

"Poll: Most in Afghanistan Say Life Better"

http://www.latimes.com/news/nationworld/world/wire/sns-ap-afghanistan-poll,1,912294.story?coll=sns-ap-world-headlines

 

There's still hope that the entire country will decay into anarchy in time for the '06 mid-terms though! Keep your fingers crossed.

[Squid]

We're turning a corner!!

[mattp]

That's great Jay. I'm sure glad we can rest easy over the holidays. Now tell me what to think about this:

 

 

1. Bush said that those Democrats who criticize him now saw the same intelligence he did before they voted to go to war. He knows they didn’t see the same intelligence as he did, and the vote was to authorize war powers while he was supposed to continue diplomatic efforts from a position of strength.

 

2. Bush said that those who are criticizing him now argue that if we depart from Iraq the terrorists will stop targeting the U.S. Not one of his critics has ever said that as far as I know.

 

3. Bush said that he accepted responsibility for intelligence failures, but declined to admit that his administration didn’t use the intelligence they had. For example, the Uranium purchase that they had been told had not occurred, or the aluminum tubes they had been told were not for centrifuges, or the weapons inspectors having told them that the nuclear weapons program had been halted, etc.

 

4. He said that the Duelfer Report concluded that “Saddam was using the oil-for-food program to influence countries and companies in an effort to undermine sanctions with the intent of restarting his weapons programs” but Duelfer in fact has said that the sanctions program had forced Hussein to STOP the weapons program.

 

5. Bush said that the terrorists attacked us before we went to Iraq and that they now resolve to continue to attack us and they say they intend to continue to use Iraq as a base of operations. He forgot to mention there was no Iraq Al-Queda connection BEFORE we invaded.

 

6. Meanwhile, Connie Rice this week continued to deny we had sent prisoners to special prisons in Europe for special treatment, didn’t she? Does anyone here believe THAT?

 

 

DO you, Jay, believe that he is telling us what their real plans are at this point (to the extent that they have any)?

[JayB]

What to you think the administrations real plans are? Their stated plans may be found here:

 

http://www.whitehouse.gov/infocus/iraq/iraq_strategy_nov2005.html

[mattp]

Sorry to ruin your hollidays/ongoing narrative with such negative news.

 

Might as well get all of the depressing stuff out of the way at once though.

 

"Survey finds hope in occupied Iraq:"

http://news.bbc.co.uk/2/hi/middle_east/3514504.stml

 

"Poll: Most in Afghanistan Say Life Better"

http://www.latimes.com/news/nationworld/world/wire/sns-ap-afghanistan-poll,1,912294.story?coll=sns-ap-world-headlines

 

There's still hope that the entire country will decay into anarchy in time for the '06 mid-terms though! Keep your fingers crossed.

 

So you are saying that anybody critical of the President doesn't support the troops or is rooting for the terrorists? There's a place for you on Bush's team.