5 ms·

The MID can be thought of as a tax subsidy that renters (who tend to be poorer) pay to land holders (who tend to be wealthier). Either the tax code needs to cha

The MID can be thought of as a tax subsidy that renters (who tend to be poorer) pay to land holders (who tend to be wealthier). Either the tax code needs to change to subsidize renters, or just leave everyone on their own...

sokoloff 8y ago
Renters also receive the benefit of the subsidy on landlord mortgages (that would otherwise increase costs to landlords which would tend to constrain supply). The poor pay less in taxes. It would not surprise me to find that if you could trace the entire effects perfectly that poor renters are net beneficiaries of the policies particularly now that the owner-occupied MID has effectively been eliminated for houses on the low end and it was previously capped on the high end already. Now, it mostly directly benefits landlords, which I’m sure is entirely a coincidence... (Our income tax system is based on taxing income/profits, meaning that eliminating business interest, including commercial mortgages, as a deduction is incongruous and a non-starter.)
- dredmorbius 8y ago
  Renters also receive the benefit of the subsidy on landlord mortgages (that would otherwise increase costs to landlords which would tend to constrain supply). False, by the same logic of land value taxes. The supply of land is fixed and cannot respond to changes in supply or demand. Or to changes in cost structure, including both taxes and subsidies on the land itself (excluding improvements). Landlords eat LVT. And they pocket the mortgage subsidy. Tax codes pick and choose among taxable and exemt income and costs all the time. Your objection is patently absurd.
  - sokoloff 8y ago
    Is it your position that increasing the annual expenses on properties available for rent by 1-2% or so of market value will have absolutely zero effect on rents? That seems to mismatch with fairly well-established economic doctrine, possibly to the extent of being Nobel Prize worthy if proven.
    - dredmorbius 8y ago
      It's entirely congruent with economic theory dating to Smith, Ricardo, and George, and finds agreement from economits across the political spectrum, to an extent that's remarkable in a frequently divided discipline. Its lack of Nobel-worthiness is based on its obviousness, not novelty. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax https://www.economist.com/free-exchange/2015/04/01/why-henry-george-had-a-point https://www.economist.com/free-exchange/2015/04/01/why-henry... The main sticking point is that the wealthy enjoy teir free money. https://www.economist.com/the-economist-explains/2014/11/10/why-land-value-taxes-are-so-popular-yet-so-rare https://www.economist.com/the-economist-explains/2014/11/10/...
      - sokoloff 8y ago
        By and large, renters don't rent unimproved land. They typically rent dwellings. Those dwellings are typically funded by loans taken out for the purpose of a profit-making endeavor, meaning they are tax-deductible loans (just like when an airline buys an airliner or an automaker builds a factory).
        dredmorbius 8y ago
        It's the provisioning of those structures that LVT dirctly inentivises. I've provided you seveal refeences, please do read them. The Wikipedia article explains and diagrams the dynamic very clearly.
        sokoloff 8y ago
        I've read a fair amount about land value taxes. I have no objection to them as a means to efficiently raise property tax revenue. This thread is about the deductibility of mortgage interest for owner-occupied vs rented properties.

sokoloff 8y ago

Renters also receive the benefit of the subsidy on landlord mortgages (that would otherwise increase costs to landlords which would tend to constrain supply). The poor pay less in taxes. It would not surprise me to find that if you could trace the entire effects perfectly that poor renters are net beneficiaries of the policies particularly now that the owner-occupied MID has effectively been eliminated for houses on the low end and it was previously capped on the high end already. Now, it mostly directly benefits landlords, which I’m sure is entirely a coincidence... (Our income tax system is based on taxing income/profits, meaning that eliminating business interest, including commercial mortgages, as a deduction is incongruous and a non-starter.)

dredmorbius 8y ago
Renters also receive the benefit of the subsidy on landlord mortgages (that would otherwise increase costs to landlords which would tend to constrain supply). False, by the same logic of land value taxes. The supply of land is fixed and cannot respond to changes in supply or demand. Or to changes in cost structure, including both taxes and subsidies on the land itself (excluding improvements). Landlords eat LVT. And they pocket the mortgage subsidy. Tax codes pick and choose among taxable and exemt income and costs all the time. Your objection is patently absurd.
- sokoloff 8y ago
  Is it your position that increasing the annual expenses on properties available for rent by 1-2% or so of market value will have absolutely zero effect on rents? That seems to mismatch with fairly well-established economic doctrine, possibly to the extent of being Nobel Prize worthy if proven.
  - dredmorbius 8y ago
    It's entirely congruent with economic theory dating to Smith, Ricardo, and George, and finds agreement from economits across the political spectrum, to an extent that's remarkable in a frequently divided discipline. Its lack of Nobel-worthiness is based on its obviousness, not novelty. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax https://www.economist.com/free-exchange/2015/04/01/why-henry-george-had-a-point https://www.economist.com/free-exchange/2015/04/01/why-henry... The main sticking point is that the wealthy enjoy teir free money. https://www.economist.com/the-economist-explains/2014/11/10/why-land-value-taxes-are-so-popular-yet-so-rare https://www.economist.com/the-economist-explains/2014/11/10/...
    - sokoloff 8y ago
      By and large, renters don't rent unimproved land. They typically rent dwellings. Those dwellings are typically funded by loans taken out for the purpose of a profit-making endeavor, meaning they are tax-deductible loans (just like when an airline buys an airliner or an automaker builds a factory).
      - dredmorbius 8y ago
        It's the provisioning of those structures that LVT dirctly inentivises. I've provided you seveal refeences, please do read them. The Wikipedia article explains and diagrams the dynamic very clearly.
        sokoloff 8y ago
        I've read a fair amount about land value taxes. I have no objection to them as a means to efficiently raise property tax revenue. This thread is about the deductibility of mortgage interest for owner-occupied vs rented properties.