Have a 3000sq foot home? Bye bye mortgage deduction

[ChicosBailBonds]

Well, at least that's what Democrat John Dingell is proposing


http://www.baltimoresun.com/business/bal-bz.harney24aug24,0,3151474.story

[Murffieus]

Chicos----I agree with Dingell on this one-----there is no reason why anyone needs a home in excess of 3,000 sq feet------and with the energy situation the way it is, why encourage those bigger homes which burn more natural gas and use so much electricity (air conditioning). I'm not into the "emission" issue on this----but just from the standpoint of reducing dependence on finite resources (heating oil and nat gas).

I also agree with him on significantly increasing the gas tax----but i would add a tax credit to offset that for mileage to and from place of work. The demand for crude oil and its byproducts (gas & diesel)is causing us nothing but problems worldwide----Iran, Al Quida, Venuzuela, and now Russia-----each of these entities would fall flat on their face and therefore their terrorism or cold war tactics would diminish if the price of crude oil dropped substantially!

Lower crude oil prices means less hostility and confrontation around the world!

[ChicosBailBonds]

It screams class warfare to me.

What if that 3000 square foot home was decked out with solar panels?  Are they counting basement square footage also?  What if the family has 10 kids and needs that size house?

It's just silly to me.

[Pakuni]

It screams class warfare to me.

What if that 3000 square foot home was decked out with solar panels?  Are they counting basement square footage also?  What if the family has 10 kids and needs that size house?

It's just silly to me.

While I don't necessarily agree with the proposed legislation as it's currently written - nor do I think it has a snowball's chance of passing - it's not class warfare. It is, for all intents, a consumption tax. Do gasoline taxes, which hit wealthy Hummer drivers harder than Ford Focus drivers, scream of class warfare? What about property taxes?

And nobody "needs" a 3,000-square-foot home. I'm pretty sure plenty of very large American families have survived, and currently are surviving, without massive, energy-sapping residences. If a family feels they cannot survive under such circumstances, don't have 10 kids.

Stunningly, I sort of agree with Murff here. We as a country can't p*** and moan about energy costs and reliance on foreign oil then turn around and consume at a rate vastly higher than the rest of the world. And it seems a not unreasonable argument to make that the best way to discouage wasteful behavior is to punish it.
Maybe 3,000-square-feet isn't the right number, but certainly there is a number  - maybe 5,000 - that's not unreasonable. And let's be honest, if you can afford a 5,000-square-foot home, you probably don't need another tax break. And if that tax break is what you need to get into that 5,000-square-foot home, then you can probably downsize a few hundred square feet and manage to get by.

[ChicosBailBonds]

Yes but those people are ALREADY incurring increased costs because of the size of the house.  Why in the hell are you doubly penalizing them?  That's the biggest problem I have with it.  The consumption tax is already paid for by the amount of energy they are using.  If you want to be fair about it, then tax the utilities higher so if you use more than X to heat your home then you pay extra.  The idea of taking away a mortgage deduction because your house is 3000 square feet is a farce on every level (and no, I don't have a 3000 square foot home nor would I ever need one).

I agree, it has no chance in hell of passing but I applaud Dingell everytime he opens his mouth...SCREAM LOUDLY JOHN DINGELL, SCREAM LOUDLY so all can hear you.

[Pakuni]

Yes but those people are ALREADY incurring increased costs because of the size of the house.  Why in the hell are you doubly penalizing them?  That's the biggest problem I have with it.  The consumption tax is already paid for by the amount of energy they are using.  If you want to be fair about it, then tax the utilities higher so if you use more than X to heat your home then you pay extra.  The idea of taking away a mortgage deduction because your house is 3000 square feet is a farce on every level (and no, I don't have a 3000 square foot home nor would I ever need one).

I agree, it has no chance in hell of passing but I applaud Dingell everytime he opens his mouth...SCREAM LOUDLY JOHN DINGELL, SCREAM LOUDLY so all can hear you.

For fairness sake, I think any legislation like this would have to be grandfathered. And that being the case, if someone makes an informed decision to purchase a (insert size here) home, knowing full well they will not receive any tax break on their mortgage as a result, I don't see that as a penalty. They are choosing to buy a home under those circumstances.
And the logic of the double penalty is lost on me. Consuming large amounts of energy is not a penalty. It's a lifestyle choice. Are we supposed to feel sorry for Hummer drivers because they pay so darn much for gas? Do we sympathize with the guy who puts out 20,000 Christmas light because his January electricity bill is so big? Is he being "penalized" for putting up all those lights? I would argue he is not, just like paying a higher heating bill is not a "penalty" for owning a larger home.
This is not akin to a progressive tax which penalizes someone for doing something beneficial to society, i.e. being productive and earning money. There's no overriding societal benefit in using excessive amounts of non-renewable energy.
Also, I don't see not giving someone a tax break as a penalty. Nobody is entitled to a tax break. It's more a matter of not giving a benefit to those who choose to live in a certain size home, not penalizing them for it.

[rocky_warrior]

If you interested in a nice scholarly discussion about the Mortgage Interest Deduction in general (forget square footage) - the following is a must read.

http://www.taxpolicycenter.org/UploadedPDF/1001084_Encouraging_Homeownership.pdf

[ChicosBailBonds]

Yes but those people are ALREADY incurring increased costs because of the size of the house.  Why in the hell are you doubly penalizing them?  That's the biggest problem I have with it.  The consumption tax is already paid for by the amount of energy they are using.  If you want to be fair about it, then tax the utilities higher so if you use more than X to heat your home then you pay extra.  The idea of taking away a mortgage deduction because your house is 3000 square feet is a farce on every level (and no, I don't have a 3000 square foot home nor would I ever need one).

I agree, it has no chance in hell of passing but I applaud Dingell everytime he opens his mouth...SCREAM LOUDLY JOHN DINGELL, SCREAM LOUDLY so all can hear you.

For fairness sake, I think any legislation like this would have to be grandfathered. And that being the case, if someone makes an informed decision to purchase a (insert size here) home, knowing full well they will not receive any tax break on their mortgage as a result, I don't see that as a penalty. They are choosing to buy a home under those circumstances.
And the logic of the double penalty is lost on me. Consuming large amounts of energy is not a penalty. It's a lifestyle choice. Are we supposed to feel sorry for Hummer drivers because they pay so darn much for gas? Do we sympathize with the guy who puts out 20,000 Christmas light because his January electricity bill is so big? Is he being "penalized" for putting up all those lights? I would argue he is not, just like paying a higher heating bill is not a "penalty" for owning a larger home.
This is not akin to a progressive tax which penalizes someone for doing something beneficial to society, i.e. being productive and earning money. There's no overriding societal benefit in using excessive amounts of non-renewable energy.
Also, I don't see not giving someone a tax break as a penalty. Nobody is entitled to a tax break. It's more a matter of not giving a benefit to those who choose to live in a certain size home, not penalizing them for it.

It's a double penalty because the energy costs of heating or cooling a house that large are already going to be greater than a 2000 square foot home or a 1000 square foot home.  I just don't understand the logic of arbitrarily removing that deduction for the size of the house.

There could be plenty of 3000 foot homes that are more energy friendly than a 2000 foot home based on insulation, solar energy, etc.  When politicians start drawing arbitrary lines in the sand it's usually fraught with problems...i.e. anyone that makes X is taxed higher.  The problem with that is X may be the same number but different value in each state.  $100K in So. Cal is a lot different than $100K income in Omaha for example.

[ChicosBailBonds]

If you interested in a nice scholarly discussion about the Mortgage Interest Deduction in general (forget square footage) - the following is a must read.

http://www.taxpolicycenter.org/UploadedPDF/1001084_Encouraging_Homeownership.pdf

The fair tax plan actually calls for the total elimination of the mortgage deduction for everyone.  I know that sounds scary, but it is an interesting plan that would help to equalize the playing field for the vast majority of citizens.

http://www.fairtax.org/site/PageServer?pagename=about_faq_answers

[Pakuni]

Yes but those people are ALREADY incurring increased costs because of the size of the house.  Why in the hell are you doubly penalizing them?  That's the biggest problem I have with it.  The consumption tax is already paid for by the amount of energy they are using.  If you want to be fair about it, then tax the utilities higher so if you use more than X to heat your home then you pay extra.  The idea of taking away a mortgage deduction because your house is 3000 square feet is a farce on every level (and no, I don't have a 3000 square foot home nor would I ever need one).

I agree, it has no chance in hell of passing but I applaud Dingell everytime he opens his mouth...SCREAM LOUDLY JOHN DINGELL, SCREAM LOUDLY so all can hear you.

For fairness sake, I think any legislation like this would have to be grandfathered. And that being the case, if someone makes an informed decision to purchase a (insert size here) home, knowing full well they will not receive any tax break on their mortgage as a result, I don't see that as a penalty. They are choosing to buy a home under those circumstances.
And the logic of the double penalty is lost on me. Consuming large amounts of energy is not a penalty. It's a lifestyle choice. Are we supposed to feel sorry for Hummer drivers because they pay so darn much for gas? Do we sympathize with the guy who puts out 20,000 Christmas light because his January electricity bill is so big? Is he being "penalized" for putting up all those lights? I would argue he is not, just like paying a higher heating bill is not a "penalty" for owning a larger home.
This is not akin to a progressive tax which penalizes someone for doing something beneficial to society, i.e. being productive and earning money. There's no overriding societal benefit in using excessive amounts of non-renewable energy.
Also, I don't see not giving someone a tax break as a penalty. Nobody is entitled to a tax break. It's more a matter of not giving a benefit to those who choose to live in a certain size home, not penalizing them for it.

It's a double penalty because the energy costs of heating or cooling a house that large are already going to be greater than a 2000 square foot home or a 1000 square foot home.  I just don't understand the logic of arbitrarily removing that deduction for the size of the house.

There could be plenty of 3000 foot homes that are more energy friendly than a 2000 foot home based on insulation, solar energy, etc.  When politicians start drawing arbitrary lines in the sand it's usually fraught with problems...i.e. anyone that makes X is taxed higher.  The problem with that is X may be the same number but different value in each state.  $100K in So. Cal is a lot different than $100K income in Omaha for example.

I simply don't buy the notion that someone is "penalized" because they choose to live in a larger house and therefore pay higher energy costs. That's akin to arguing that I'm penalized for driving Mercedes because its maintenance costs are greater than those for a Toyota. It's not a penalty, it's a cost of living one incurs as a rsult of lifestyle choices, And when one makes a conscious, voluntary decision to engage in a costlier lifestyle, how can you argue they're being penalized? I just don't see it.

Re: $100K in Omaha vs. $100K in California, that's evened out by a free market in which salaries are adjusted for local costs of living. Therefore two people doing the exact same job in different parts of the country won't often earn the same salary. I'd bet dollars to donuts the trash collector in Laguna Beach earns a heck of a lot more than the trash collector in Council Bluffs.

[ChicosBailBonds]

I'd bet dollars to donuts they make more than the Council Bluffs trash collector does as well, but enough to make a go of it...I don't think so.  One just has to use a cost of living index to see that though salaries are different from city to city, that doesn't mean they are equivalent.  Anyone that has looked at other job offers from other states can tell you that with a rather quick view of how your salary in option B is going to work vs where you are today...even if it's a "lateral" move.


You Mercedes example in my mind is a good one.  If I were to buy a Mercedes and then suddenly the gov't decided it was going to throw a German tax on it because it was a German car, I'd be pissed.  I'm already paying higher maintenance fees because of what the car is, why are they doubling down on me?  Or an SUV tax or anything else.

These types of taxes are a great way to scuttle an industry and tamper with the economy.  These guys never learn.  It's a one size fits all by them which usually produces terrible results.

I'll give you an example of the home I grew up in.  About 2500 square feet in a town about 15,000 when we moved there...it was considered the sticks.  Now it has about 140,000 people, people commute to LA from there all the time, no longer considered the "sticks".  That house had NO air conditioning, no ceiling fans, it would top 100 degrees constantly during the summer.  The energy bills were very low because it simply had no way of cooling down.  The winters were mild so very little heating involved.  The house across the street was about 1800 square feet, with AC, with a swimming pool.  Their energy costs were at LEAST quadruple each month to my parents.  Say Dingell gets the bright idea to move down to 2500 square feet with his hairbrained idea.  That house across the street that went crazy on energy is exempt but this house wouldn't be?

Stupid idea in my opinion without some serious caveats to it which lead to loop holes which leads to all kinds of other silliness.

[mu_hilltopper]

I've read this thread with interest and gone back and forth, but I think Chicos has a point .. sq footage is much too arbitrary .. and so unenforceable.

I'd think they'd go the standard route when talking about deductions.  Tons of deductions have upper limits.   Generally speaking, high mortgage interest = bigger home = wealthier people.  If you want to stick it to them, just limit the mort interest deduction to, say, $15k.  (total guess on large mortgage/year.)

[Murffieus]

Well however its handled----but anything over 3,000 sq feet is ridiculous----why should others have to pay more for energy because someone else wants to show off a house most of which he doesn't need or use!

I raised 6 kids in a 2,400 sq foot home (5 berooms) and we had more than enough room!

[77ncaachamps]

It screams class warfare to me.

What if that 3000 square foot home was decked out with solar panels?  Are they counting basement square footage also?  What if the family has 10 kids and needs that size house?

It's just silly to me.

People in California are able to fit a family like that into a Condo.

Why waste...just because you can. It's irresponsible to do so.

[Pakuni]

I've read this thread with interest and gone back and forth, but I think Chicos has a point .. sq footage is much too arbitrary .. and so unenforceable.

How is a firm number qualify as arbitrary? If a progressive income tax and valued-based property taxes aren't too arbitrary to enforceable, then certainly a set-in-stone square footage is not. Property taxes in particular are far more arbitrary than this.

   Generally speaking, high mortgage interest = bigger home = wealthier people.  If you want to stick it to them, just limit the mort interest deduction to, say, $15k.  (total guess on large mortgage/year.)

Except the truly wealthy, by and large, don't have mortgages.

[mu_hilltopper]

"How is (does) a firm number qualify as arbitrary?"    While indeed a finite number, the definition of arbitrary lends itself to choosing that number based on less than scientific or statistical bases.   How was 3500 sq feet chosen?  With a nice fat round number like that, you can assume that Dingell chose that number as a house he thought was a "McMansion" and therefore seemed too luxurious. 

It wouldn't be arbitrary if it was somehow calculated specifically based on family size or other factors, like climate or as some mentioned, energy efficiency.

And yes, the truly wealthy don't have mortgages.  Nor are they benefiting from mortgage interest deductions. 

[ZiggysFryBoy]

how would Algore weasel out of this situation in his mansion.  Could be by "mortgage deduction offsets"?  maybe spend a few nights a year in a doublewide in the outskirts of Nashville??

[ChicosBailBonds]

It screams class warfare to me.

What if that 3000 square foot home was decked out with solar panels?  Are they counting basement square footage also?  What if the family has 10 kids and needs that size house?

It's just silly to me.

People in California are able to fit a family like that into a Condo.

Why waste...just because you can. It's irresponsible to do so.

My wife grew up in California with 8 brothers and sisters and two parents....11 people all told.  I don't consider their house a "waste" excessive.

[augoman]

creeping ever closer to socialism, we now want to regulate the square footage of living space acceptable per person?  the taxes on utilities, the high cost of same, and the property tax on assessed value already do this- not to mention impact fees and permit fees.

[ChicosBailBonds]

creeping ever closer to socialism, we now want to regulate the square footage of living space acceptable per person?  the taxes on utilities, the high cost of same, and the property tax on assessed value already do this- not to mention impact fees and permit fees.

Wait until they start charging us by the mile we drive.  It's a proposal that has hit California twice and lost twice, but it will come up again.  Basically a GPS system on your car and you are taxed based on how much you drive.  And the left screams about Big Brother on the right...wholly smokes, as long as it's in the name of "GLOBAL WARMING" it's ok apparently.

Yikes.   And those poor bastards out here who bought homes they could afford which are 50+ miles away from work, well that would just stick them big time.  Or how about the poor bastards that had a 10 mile drive but their company moved to a more tax friendly county and hd/she has a 40 mile drive...too bad.

Again, it's been shot down twice but I have NO DOUBT it's coming eventually.  Hopefully the good citizens will cry foul just like they did whe Gray Davis pulled his crap with the car renewal fees if it does come to pass.

[augoman]

another example of the arrogant few telling everyone else what's good for them and trying to legislate same..., while at the ssame time screaming that their liberties are being taken away by the patriot act.

[muwarrior69]

Every time we exhale we put CO2 into the air; I expect a breathing tax in the for seeable future.

[warriorchick]

It would make more sense to get rid of the mortgage deduction for second homes.  The only reason that was written into in the first place is because most congressmen have at least two homes - one in the DC area and one in their home district.

[ChicosBailBonds]

Every time we exhale we put CO2 into the air; I expect a breathing tax in the for seeable future.

Which plants, trees, etc need.  So I'm happy to keep putting out carbon in large amounts....but yes, you can bet your arse carbon taxes are coming because the politicians need to scare up the world in order to tax you in some way.  Wait until they go after your 401K down the road.

[Jay Bee]

As a single man with a primary residence with 3,500 finished sq feet, I say "kiss my a$$" with your judgments. Everyone's situation is different.

If you want to simplify the tax code & remove the deduction along with a multitude of other changes, let's talk.

No one "needs" a lot of things. Go pay an extra tax for using a phone to check Scoop, you hypocrites!

2%'ers unite!

[Benny B]

Every time we exhale we put CO2 into the air; I expect a breathing tax in the for seeable future.

That's some great necro there, 69.

[ZiggysFryBoy]

As a single man with a primary residence with 3,500 finished sq feet, I say "kiss my a$$" with your judgments. Everyone's situation is different.

If you want to simplify the tax code & remove the deduction along with a multitude of other changes, let's talk.

No one "needs" a lot of things. Go pay an extra tax for using a phone to check Scoop, you hypocrites!

2%'ers unite!

how many wide is that trailer bro?

[Aughnanure]

The fair tax plan actually calls for the total elimination of the mortgage deduction for everyone.  I know that sounds scary, but it is an interesting plan that would help to equalize the playing field for the vast majority of citizens.

http://www.fairtax.org/site/PageServer?pagename=about_faq_answers

Hahahahahahahaha. No, no it wouldn't at all.

[Aughnanure]

Well however its handled----but anything over 3,000 sq feet is ridiculous----why should others have to pay more for energy because someone else wants to show off a house most of which he doesn't need or use!

I raised 6 kids in a 2,400 sq foot home (5 berooms) and we had more than enough room!

This is a key point. YOUR energy consumption habits directly impact your neighbors. DIRECTLY! You are not a freaking island.

[Aughnanure]

Which plants, trees, etc need.  So I'm happy to keep putting out carbon in large amounts....but yes, you can bet your arse carbon taxes are coming because the politicians need to scare up the world in order to tax you in some way.  Wait until they go after your 401K down the road.

Hurry up before that slippery slope paranoia gets you.

[WellsstreetWanderer]

Chicos----I agree with Dingell on this one-----there is no reason why anyone needs a home in excess of 3,000 sq feet------and with the energy situation the way it is, why encourage those bigger homes which burn more natural gas and use so much electricity (air conditioning). I'm not into the "emission" issue on this----but just from the standpoint of reducing dependence on finite resources (heating oil and nat gas).

I also agree with him on significantly increasing the gas tax----but i would add a tax credit to offset that for mileage to and from place of work. The demand for crude oil and its byproducts (gas & diesel)is causing us nothing but problems worldwide----Iran, Al Quida, Venuzuela, and now Russia-----each of these entities would fall flat on their face and therefore their terrorism or cold war tactics would diminish if the price of crude oil dropped substantially!

Lower crude oil prices means less hostility and confrontation around the world!

I'm sorry but who the heck are you to decide what somebody else needs? It is no one's business what someone's square footage is as long as it doesn't violate zoning codes. Oil and gas aren't finite according to a friend who is a world renowned geologist and expert. there would be very little problems  with Russia and OPECif we build the damn pipeline. What is it with people who want to ban everything they don't want or like? 32 oz. sodas, guns, certain dogs, French fries etc. etc., etc.  Sheesh

[reinko]

I'm sorry but who the heck are you to decide what somebody else needs? It is no one's business what someone's square footage is as long as it doesn't violate zoning codes. Oil and gas aren't finite according to a friend who is a world renowned geologist and expert. there would be very little problems  with Russia and OPECif we build the damn pipeline. What is it with people who want to ban everything they don't want or like? 32 oz. sodas, guns, certain dogs, French fries etc. etc., etc.  Sheesh

You realize this post is over 6 Years old right?

[muwarrior69]

Which plants, trees, etc need.  So I'm happy to keep putting out carbon in large amounts....but yes, you can bet your arse carbon taxes are coming because the politicians need to scare up the world in order to tax you in some way.  Wait until they go after your 401K down the road.

Since I am retired they are already going after my 401K; its the taxes I pay on my social security income that I take offense.

[tower912]

6 year old thread resurrected by a spammer.   Clearly illustrates why the mods don't want political threads. 

[4everwarriors]

Followin' up on f*ckin's thought, then, what trailer park you at, kin?

[madtownwarrior]

ah, another brilliant gem from my favorite dumbest poster...

Chicos----I agree with Dingell on this one-----there is no reason why anyone needs a home in excess of 3,000 sq feet------and with the energy situation the way it is, why encourage those bigger homes which burn more natural gas and use so much electricity (air conditioning). I'm not into the "emission" issue on this----but just from the standpoint of reducing dependence on finite resources (heating oil and nat gas).

I also agree with him on significantly increasing the gas tax----but i would add a tax credit to offset that for mileage to and from place of work. The demand for crude oil and its byproducts (gas & diesel)is causing us nothing but problems worldwide----Iran, Al Quida, Venuzuela, and now Russia-----each of these entities would fall flat on their face and therefore their terrorism or cold war tactics would diminish if the price of crude oil dropped substantially!

Lower crude oil prices means less hostility and confrontation around the world!

[rocky_warrior]

6 year old thread resurrected by a spammer.   Clearly illustrates why the mods don't want political threads. 

Yup, this is no good at all.  Took 6 years, but finally locked.