EPTUS Politics Mega-thread - Page 4702
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Read the rules in the OP before posting, please. In order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a re-read to refresh your memory! The vast majority of you are contributing in a healthy way, keep it up! NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious. Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action. | ||
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zlefin
United States7689 Posts
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pmh
1399 Posts
On August 11 2016 05:31 KwarK wrote: Not really a huge incentive unless you were itemizing already. The first $12,600 of interest doesn't save you a dollar in tax. After that it saves you $0.25 on the dollar if you're in the 25% bracket etc. It's mostly a benefit to the rich who buy more expensive houses. The median US house price is $189,000 so if we assume you still owe 100% of the home value and that you're paying 5% interest you still wouldn't get a cent in tax credits unless you were itemizing. And the poor don't itemize. It's a gift to the rich. 5% mortgage rate in usa? Oh wow that is high seeing that the banks lend for 0% themselves. In northern europe it is now down to just above 2%. Thought usa would be similar. But yes, deduction of the interest mostly benefits the rich. Still think its a good system but they should limit the max amount of deduction to a certain number. | ||
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Blitzkrieg0
United States13132 Posts
On August 11 2016 05:46 pmh wrote: 5% mortgage rate in usa? Oh wow that is high seeing that the banks lend for 0% themselves. In northern europe it is now down to just above 2%. Thought usa would be similar. 5% should be overshooting it by at least a percentage point if not almost two. | ||
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DeepElemBlues
United States5079 Posts
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KwarK
United States43469 Posts
On August 11 2016 05:46 pmh wrote: 5% mortgage rate in usa? Oh wow that is high seeing that the banks lend for 0% themselves. In northern europe it is now down to just above 2%. Thought usa would be similar. I was ballparking really high to make a point with both the interest rate and the amount still owed on the home. If you had already paid off 70% of the cost of the home and your interest was 3% then simply to get above the standard deductible would take a balance of $420,000 still owed which mean a $1,400,000 home. A home worth less than that would, if you had a 3% mortgage and 70% paid off already, not surpass the standard deductible. That was my point, that even if we assume the most favourable circumstances, it still doesn't help anyone but the rich. If we assume realistic circumstances it doesn't help anyone but the super rich. The mortgage interest deduction has so much overlap with the standard deductible that it gives very little benefit to people who aren't buying extremely expensive houses (or itemizing but again, the poor are far, far less likely to itemize). | ||
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Plansix
United States60190 Posts
On August 11 2016 05:52 DeepElemBlues wrote: Anyone paying a 5% rate on a mortgage they took on in the last ~15 years should hand over power of attorney to someone who isn't going to let them get hosed anymore. Really, I wish everyone would just get their own advocate when taking out a 30 year mortgage to assure they don’t get screwed. But we are the nation that handed out no income, no job loans. Those heady days. | ||
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KwarK
United States43469 Posts
On August 11 2016 05:52 DeepElemBlues wrote: Anyone paying a 5% rate on a mortgage they took on in the last ~15 years should hand over power of attorney to someone who isn't going to let them get hosed anymore. No thoughts on the 100% still owed on the home? My point was that even with 100% of the value of the home still owed and a ridiculous 5% mortgage that's still only $9,500 of interest a year on a median home which falls short of the standard deductible. The more realistic you get the percentage still owed and the interest the more ludicrous the idea that anyone but the rich are really getting much benefit from the deduction becomes. People buying median homes do not really get shit out of the deduction. Or you could think of it that they get so much good stuff from the standard deduction that it overlaps entirely with the interest deduction. But either way the result is the same. The interest deduction is essentially a gift to the rich. | ||
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ragz_gt
9172 Posts
On August 11 2016 05:58 KwarK wrote: No thoughts on the 100% still owed on the home? My point was that even with 100% of the value of the home still owed and a ridiculous 5% mortgage that's still only $9,500 of interest a year on a median home which falls short of the standard deductible. The more realistic you get the percentage still owed and the interest the more ludicrous the idea that anyone but the rich are really getting much benefit from the deduction becomes. People buying median homes do not really get shit out of the deduction. But it is discounting what they could be itemizing but wasn't because standard deduction. My interest is less than that, but my other expense didn't warrant deduction before, combined with mortgage interest it did. | ||
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WhiteDog
France8650 Posts
Housing is just a safe investment, it doesn't give a lot of return. | ||
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KwarK
United States43469 Posts
On August 11 2016 06:06 ragz_gt wrote: But it is discounting what they could be itemizing but wasn't because standard deduction. My interest is less than that, but my other expense didn't warrant deduction before, combined with mortgage interest it did. Sure, and if all your deductible expenses make it to $12,601 then you get to deduct that extra dollar and save your $0.25. Which means that the more you surpass the $12,600 by the better it becomes. Itemizing isn't very good for someone who itemizes $13,000 but it's great for someone who itemizes $50,000. The median family income is around $50,000 though so the odds of all of their deductible expenses adding up to $50,000 is pretty low though. That'd have to be an awful lot of healthcare expenses, charitable giving, school expenses etc. I stand by my claim. Sure a poor family who itemizes $13,000 gets to write off taxes on that extra $400 for a saving of $100ish in taxes but that's not really going to be comparable with the benefits a richer family get from it. Or to put it another way, if the mortgage interest deduction were replaced with a general lowering of tax brackets or a raising of the standard deduction with the same $ value there would be a net benefit to the poor and a net detriment to the rich. | ||
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puerk
Germany855 Posts
the situation is: there is a large incentive to save, there is government funding to match, and employer matching aswell but those incentives only exist because the assumed rate of use for them is very very low furthermore: there is no demand for capital, there are no worthwhile investments for the huge amounts of capital you want to see saved, the system only works for a few, not because it is set up unfavourably for individuals, but because it has a limited aggregate demand in a global economy where interbank interest rates and government bonds are below 0 as they are in europe, advocating for more saving on the individual basis to somehow improve the financial situation of all (not a single) individuals is doomed to fail by default yes it works for you, but only because of the other 250m that currently are not doing it to the extent you advocate | ||
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jello_biafra
United Kingdom6639 Posts
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DarkPlasmaBall
United States45225 Posts
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TheTenthDoc
United States9561 Posts
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oBlade
United States5823 Posts
He's a Trump supporter but nonetheless crazy/an idiot. He appears to be sticking to the corner where the window frames are, he seems to be working around those rather than in the middle of the open. | ||
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Falling
Canada11388 Posts
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Zambrah
United States7393 Posts
This reminds me somewhat of Rapunzel. "Trump! O Trump! Let down your long toupe!" | ||
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GGTeMpLaR
United States7226 Posts
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oBlade
United States5823 Posts
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DarkPlasmaBall
United States45225 Posts
On August 11 2016 06:56 oBlade wrote: https://www.youtube.com/watch?v=sP493LmSJrE He's a Trump supporter but nonetheless crazy/an idiot. He appears to be sticking to the corner where the window frames are, he seems to be working around those rather than in the middle of the open. Obviously he wants a cabinet position. | ||
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