4 ms·
This seems backwards to me. Wouldn't a better option be to deduct interest on any house worth less than 750k or some lower number as that would help the middle
by icsllaf 8y ago
This seems backwards to me. Wouldn't a better option be to deduct interest on any house worth less than 750k or some lower number as that would help the middle class much more while also encouraging smaller home purchases and affordability?
- Fjolsvith 8y agoI think that's what the parent is saying - "up to 750k".
- zdragnar 8y agoCorrect. The $750k number is the cap on the debt for which you can deduct paid interest from. So, if you borrow 1 million dollars to buy a house, you only get to deduct 3/4 of the interest now, instead of the full amount. Interest on smaller loans continues to be fully deductible. Doubling the standard deduction may have a perverse inventive against borrowing less (or simply buying cheaper homes) as, depending on your situation, it may be better than itemizing. I think it's debatable whether the mortgage interest deduction really plays heavily into a noticeable amount of people's decision to buy or not; unless you are having a hard time deciding to buy or rent, there are a lot of other, larger factors. Finally, I believe that doubling the standard deduction and eliminating a number of other deductions is a small, first step towards creating a simpler tax code- such a code wouldn't be as useful for social engineering (help middle class buy more small homes) but there are plenty of benefits, too.
- maxerickson 8y agoIt certainly factors into what people are willing to pay each month, which is the actual thing they think about when they are figuring out how big a mortgage they can handle.