Here comes the housing market crash!

Lowering the deduction for interest will increase the cost of homes, depressing sales, and causing sellers to start lowering their asking prices. This could start a downward spiral, and the fastest-growing segment of the economy will start shrinking. Etc.

This is an interesting blurb of news and, at least by the way it's presented, extremely scary to the average joe. Unfortunately, hit and run shots like these only lend credibility to the feeling among Senators that "Bloggers 'Probably Not' Considered Journos" when constructing a reporter shield law.

It wouldn't have taken much more effort and it would have been much more honest to link to the LA Times story on the very same subject. It contains much more real information, including the fact that the deductable personal mortgage limit is currently at $1,000,000. The panel looking into this is proposing lowering the limit somewhat, but nobody is proposing the elimination of mortgage interest deductions.

If the panel's recommendations were accepted and the tax code was changed, the effect would be felt almost totally by people holding mortages debts well above $311,000 and probably above $500,000.

Hardly a need for a Chicken Little alarm.

It is a Republican myth that the federal government is run by the President and the Congress merely exists to facilitate this endeavor by passing the legislation he asks for.
Well, what's mythical is that this is the way it should be.
In reality, the congress should be setting the agenda, passing appropriate legislation and then making sure that the administration carries out the Congressional goals.
But even under the mythic scenario, it won't be the President who will writing and voting on the laws covering deductions from income and tax obligations. So, it's not helpful to pretend otherwise. Mainly because it lets Congresscritters who are up for election in 2006 off the hook.

Hey Mr. Underline, where do you live that your house isn't worth more 300k? This is a Republican dream move because it takes advantage of the Blue state verses Red State kind of stuff here. Blue states tend to have higher populations, and higher property values. So this kind of tax increase will kill people in Blue States. Meanwhile Red states tend to have lower populations and lower property values and they will be unaffected by the change. It's a win win for the radical Republican base. They get to give the wealthy more money while passing the bill onto those living in the Blue states.

Hey Mr.(?) Jamison, it's the deductible portion of mortgage debt they are talking about, not home value.

If you read the LA Times article more carefully, you'll see the the panel is sensitive to the fact that homes cost more in Southern California than they do in some other parts of the country. Once again, if they lowered the deductability limit to $500,000, only those people who have a mortgage larger then $500,000 would be affected. And even those people would be affected only to the degree that their mortgage exceeds $500,000. For instance, if you had a $600,000 mortgage, you'd be able to deduct the interest on the first $500,000 of it.

You can twist and spin this any way you want, but you can't make the average joe believe that people holding $500,000+ mortages and up are "working-class" people. The democrats have decried the tax cuts for the rich. This seems like a modest attempt to increase taxes on the rich.

hello bloggers!

I worked today, came home and did housework. finally turned on the tv news and it's all about the freakin bird flu. every channel.

then I get online and it's all about AL GORE.
I've been rough on Gore over the years. Being a rock fan, I didn't like Tipper trying to put labls on records. and I think Gore was too sure he would win and he went too far with that special id card to buy guns. people in the south like their guns.

but I do like Al Gore. I'm interested in his tv channel. he's truly an environmentalist. did you guys get that petition from DFA regarding our expectations from candidates? one was that they admit that it was a bad idea to go into Iraq.
I LOVE IT!!

I think this bird flu thing is way hyped.
I saw a news show earlier about how people getter sicker- bigger illnesses if they go into a hospital. The last time I went to the Dr was
7-19-05. I am going to try and wait til at least 7-19-06 to go back. I will only go if Im half dead. damn blood sucking Drs. strange that I am a Howard dean fan.

Am i the only person here!!??

I hope the focus gets back to Iraq sometime soon.
I read an article that maybe cheney and bush have had a spat. maybe it's about who's assistant is in trouble.

Well, I am glad that Jim Dean sent me that petition. ANYBODY can see that it was definately not worth it to go to Iraq. no waffling. it's so obvious.

well my husband just got home from hunting deer- the most beautiful animal and the healthiest meat you can eat. I told you them southern guys like their guns. he hunts but he aint no redneck.
gotta go! bye bye bloggers!

Just heard it argued on a radio talkshow that even if a majority of Americans want impeachment (as revealed in a poll just released), no House effort should be made in that direction until after the 2006 election.

It was claimed that an attempt for impeachment hearings now would give The Populace false hope because such hearings would be rejected by the Bush-controlled House. I say the Dems better show The Populace what all is happening and give them some REAL hope pretty soon, or this so far mythical 2006 election turn-out will fizzle!

Take note: It takes a long time to motivate the varied personality types who make up The Populace. I believe an attempt to initiate impeachment -- even if it failed -- would help the populace learn and understand that the majority of this current Congress and Senate are a huge part of the problem. I don't think the majority of Americans understand much about the workings of government. There are three whole age groups of citizens who weren't around for the Nixon impeachment, and who may need to learn about this from scratch, just as their parents and grandparents did. That group learning process needs to get started NOW!

Back in the Nixon situation, Nixon stalled the investigation and legal process for YEARS! The more resistence the Nixon administration exerted, the more irritated the public got. We need to expose that resistence from the Bush Team; it needs to be illustrated clearly and consistently BEFORE the 2006 election; it will serve as feeling/emotional impetus for voter turn-out! The voters MUST be made to realize that Bush's machine in the Houses of Congress are as corrupt as he is -- and their resistence to impeachment hearings (mere hearings!) will do that!

The Dems are fools if they think there will be some kind of high voter turn-out and desire for impeachment if the citizenry isn't given a pre-2006 experience of how frozen and inaccessible this Bush-dominated government has become! Start now, not necessarily for an easy win, but to begin the VERY necessary education of the electorate and to begin to publicize the seriousness of the behavior of the Bush Machine!

Bush tax cuts versus Bush hatcheting tax deductions: So I got a $130 tax refund. Now he takes away my MUCH larger mortgage and healthcare deductions. PUHLEASE IMPEACH HIM!

Forgot that!

Did you guys see the new polls out tonight?

The man's numbers are so low, ABC just ran an special on it!

My favorite "poll question":

Who do you think should led the country in 2006 Election?

Republican 39%
Democrats 48%

I feel good tonight - whereas, tomorrow is another day........I feel good tonight!!!

It is amazing! Jesse posts a link to the MSNBC website while the non-believers post a link to the LA Times website. It looks like the LA Times readers cherry-picked the parts that made their point, but ignored the parts about healthcare and the alternative minimum tax.

We are missing the big picture. The whole goal of the regressive movement is to create a PERMANENT ARISTOCRACY. This so-called "tax reform" is just an attempt to raise taxes on the poor.

Bush asked his tax reform panel to propose ways to make the Tax Code simpler and more conducive to economic growth. He also stipulated that its recommendations should not cost the Treasury any money.

Here's the situation: The stuff talked about in the L.A. Times neither simplifies the tax code nor creates demand in our economy.

The juggernaut in the room is the elimination of the alternative minimum tax. The "rich" would have every incentive to use their tax shelters and pay no taxes whatsoever.

Eliminating the alternative minimum tax, the panel estimates, would cost the government about $1.2 trillion in revenue over 10 years. The panel offered NO estimate of the revenue to be gained by scaling back the mortgage deduction, but according to the White House, abolishing it outright would fall somewhat short of $1.2 trillion.

Since the "rich" won't be paying taxes anyway, the limit on mortgage interest deductions is worthless.

Since the "rich" won't be paying taxes anyway, the limit on employer-provided heath benefit deductions is worthless.

Where will the lost revenue come from? There will either be more record deficits or massive cuts in public investments. Either way there will be a cry for the national sales tax. A national sales tax is a tax increase on the poor.

This is just one of many steps into creating A PERMANENT ARISTOCRACY.

Can someone say non-fixed interest?

"Hide the Salami" an appeal to the ethnic vote?! I heard Dean say this on Letterman and cannot believe it of my own party.

Incredibly insensitive comment Mr. Dean, especially given that Democrats do not support 100% the civil rights of Gay Americans.

No one would think mentioning a comment about fried chicken as an appeal to the African American vote funny whatsoever - for some reason Democrats are okay with such things where Gay Americans are concerned.

I think the point that was intended to be made by this post is that Republicans routinely present tax adjustments as "cuts" when, in fact, the purpose is the shift where the revenue is collected from and, if at all possible, increase the amount collected.
For example, the argument for removing the capital gains tax that used to be levied on the increased value of a residence over time (between the time when a young family bought their own house and the time they decided to sell because their kids had grown and moved out) was prompted by the assumption that this tax (anywhere from 15%to 25%) was discouraging people from doing what they other wise might and an awareness that the failure to sell these houses was depriving the realtors, appraisers, mortgage writers of business and profit that could be taxed just as well. Indeed, it was expected that "churning" the housing market would produce more tax revenue than was lost by cutting the capital gains tax.
That selling off the family homestead and buying a new residence at an inflated price might not actually be a wise decision on the part of people who were nearing retirement was of no concern to the people who came up with these strategies. Their bottom line criterion is "how can we collect more money for the federal government while making it look like people's taxes are being cut?"

Basically, these proposals are all dishonest and should disgust us because lying to people is evidence of gross disrespect.

Observations:

1) I predicted in 2004 Presidential race that Bush would come up with all sorts of devasting tax policy changes. He would claim that he lowered taxes because of changes to the rates (for the upper brackets that is) while coming up with all sorts of draconian measures to cover the deficit.

2) This will burst the housing bubble as well as sending many people in Chapter 13 bankruptcy making the problem of surplus housing worst. Watch home prices go down, down, down ...

3) Millions of Americans will lose their health care coverage. The Republicans will try to force HSA's on working/middle income people even though they hate them. Only wealthy people looking for a tax shelter likes HSA's. At the very least, expect your employee health care contribution to increase 2-4 times.

4) These measures will result in a severe recession. There will be no easy way out of recession as interest rates can't be cut in the face of inflation due to rising energy costs. Also, the economy is structurally weak due to the outsourcing of quality jobs.

5) The Democrats can wipe the Republicans out in 2006 / 2008 by simply running on a platform to restore these deductions, rolling back Bush's tax breaks on dividends and the decreased rates for the upper brackets.

6) Eliminating these deductions changes the tax issue from a theoretical discussion about eliminating deficits to a real painful problem for 80-90% of the nation. People will demand rolling back tax breaks for the wealthy, eliminating corporate subsidies and ending the Iraq war. They will see their prosperity being traded off for an extreme agenda that benefits wealth & power.

Pee-wee, you still haven't shown how the panel proposal "is just an attempt to raise taxes on the poor." Those are your words.

You can argue all day long that the rich won't be paying the proposed increases (I'll disagree), but you're SOL arguing the poor or working-class will pay one dime more due to these proposals. And that is my point.

Jesse's original article stated: "Do you own a home? Do you ever use health care? Then Bush wants you to pay more." The facts don't support that statement or your conclusion either.

If the panel's recommendations were accepted and the tax code was changed, the effect would be felt almost totally by people holding mortages debts well above $311,000 and probably above $500,000. Hardly a need for a Chicken Little alarm. Posted by _________ on October 12, 2005 at 02:26 PM

In other words, only homeowners in CA where the median home price is $568,890

"In other words, only homeowners in CA where the median home price is $568,890"

If the mortgage deductablity limit was lowered to $500,000 and you bought a house in CA for the median price of $568,890, you would not be affected unless your Loan-to-Value ratio was above 87%. At 90% LTV, only $12,000 of your half million dollar mortgage would not be deductable.

Oops. Forgot to end the BLOCKQUOTE. You can tell what is quoted and what my comments are by context.
Sorry.

History always repeats itself when its lessons are never learned. If the alternative minimum tax is eliminated, the rich WILL use their tax shelters. It's legal.

As for the panel's proposals; they are just a smokescreen for eliminating the alternative minimum tax. They also ignore the rise of non-fixed interest loans. If none of the proposals affect the middle class or the poor, why do we need tax reform?

Why are we selling this as a tax increase on the rich when we are only talking about deductibles? When the rich stop paying taxes they won't need deductibles.

The panelists (along with most regressives) keep bringing up the NATIONAL SALES TAX. A national sales tax is a tax increase on the poor!

None of the proposals actually simplifies the tax code. What is the purpose of "tax reform"?

I will maintain that "tax reform" is a scam. The last time we had "tax reform", tips made by waitresses became taxable income (tax increase on the poor).

Some want to argue specifics while ignoring the big picture. Some want to create their revisionist history to believe in the current scam of the day. Some want to believe that "this time it will be different."

The ultimate goal of the regressive movement is to create a PERMANENT ARISTOCRACY. Creating a tax free environment for the haves (repeal of alternative minimum tax) or increasing taxes for the have-nots (national sales tax) are steps in that wrong direction.

How does EMPLOYER-paid health benefit deductions primarily help the wealthy?

While we're on the subject of taxes, in last year's election for TX-17, Arlene Wohlgemuth (R)vs. Chet Edwards (D), the DSCC ran a series of ads saying that Wohlgemuth wanted a national sales tax, along with an increase in the state sales tax (currently 8.25%).

Obviously, ideas like that cost Wohlgemuth her seat, and allowed Edwards (one of the Dems affected by the redistricting) to stay in Congress.

Let that be a lesson to each and everyone of us.

It's a midddle class tax hike....call it what it is.

The Republicans have to raise taxes, but won't admit it. So they are going the backdoor approach...screwing the middle class...hoping we are too stupid to realize that this proposal is going to finance the permanent tax cuts for the rich and the cost of the failed Iraq quagmire.

Forget the war on terrorism...it's the war on the middle class that they want to win.

Lots of angles out there, lots of economic spin that's lost on me, so I'll venture a more general and overarching observation here. In W's 6 years, when has he ever maneuvered in a way that benefits the average American over the long term. I can't think of one incident in which the average joe, or his kids have prospered under this admistration's radical reshaping of law. Every appointment, every important decision, every new law or undermining of existing law has been secretive and involves the president's inner circle. Could someone please name one time that our leader has looked ahead - fiscally (the debt that now shackles our nation will not disappear in our lifetimes), environmentally (slash and burn, drill and spill), militarily (we are now the target of every country on the planet's spite and wrath), diplomatically (a word lost on poor W), politically (W and his croneys have brought politics to an all-time sleazy low), or otherwise? In this light, how can I believe his new tax policies will be forward thinking, productive, or even fair?

Posted by _________,

How come you don't have enough balls to even use a made up nick on a blog? If your that ashamed to even try to make up a name, which most likely in your case would be "whiney republican", I wouldn't try to make a post. What's busting your gonads right now is that fact is fact, your president just raised taxes which he, and like his father before said, would not do! Just like father and son, "No New Taxes", it must run in the family.

However, I think raising the taxes is a good thing, but ONLY on the ones who should be paying them, you know, the ones making over $1 mil. and up a year! Or better yet, what about the top 10% which don't hardly pay shit while the poor and middle class shoulders all the burnden. You sorry ass sacks of shit republicans ought to be shipped out of this country, and dropped smack in the middle of Iraq, right after we pull out the military. Hows it feel to be on that sinking boat, and you've got another three more years before it hits the bottom of shit creek! Especially since right now there's several spilling there guts before congress, and cutting deals so they don't go to the pen with Rove, Libby, Cheney, DeLay, Frist, and all the other corrupt GOP. Yor hearing that great Flushing sound as your party goes right down the toilet. The republican party right now reminds me of a dog turd in a rain storm, eventually you'll dwindle right down in size, and be washed right down the sewer where you belong!

Will Matney, Ohio

(By the way, I'm proud to say who I am and don't try to hide it!)

Dear __________,

You make some very obvious conclusions on the above proposals. It is equally as obvious to say that the reason many on this forum reject this proposal is because of who is proposing it. As a mortgage broker in Wisconsin, I have very few mortgages written over $500,000. A $3,000 principal and interest payment is not something "working class" Americans are participating in in my world.

Sincerely,

Mr. Obvious

This is exactly why we need to get rid of the income tax.

As long as the feds can get into your wallet unfettered, they will take ALL they can.

And don't belive it when Dems or Repbs say "This will only affect the rich." Ladies and gents, "The rich pay less percentage of their income in taxes than most middle and lower middle class tax payers!"

ALERT:
ANYONE that isn't SOMEBODY! is not in the scope of Republican Policies. As God said, they pray that the NOBODYS WILL BE WARM AND FED,but will not lift one finger to make it so.