I normally try to stay as far away from politics and legislation as possible. Recently however, with trillions of dollars in deficits, rising cost of living and shrinking middle class, there has been a push by some in Washington to make sweeping changes to the tax structure we Americans have become accustom too over the past few decades.
Yes, we as a country need to curb our spending and become more responsible with how things are done here in the United States. As a Realtor, I am driven to protect the rights of us professionals to continue doing what we do with limited interference. I depend on our legistlators to protect me as well as my clients. As a service, our industry is very vulernable to changes the economy and economic outlook. So, in a sense, I have skin in the game when it comes to making sure all of us act responsibly and in the best interest of everyone.
So, What About Mortgage Interest Deduction - Where Do I Stand?
There was an article in the Washington Post recently that drove a misperception that the Mortgage Interest Deduction (MID) benefits the wealthy. My feeling is, MID primarily benefits the middle and lower income familes who earn less than $100,000. From my research, approximately 91% who claim less $200,000 are MID beneficiaries - many being younger middle-class families
The MID helps families become home owners by reducing the carrying costs of owning a home. The ability to deduct interest on a mortgage can save a significant amount of taxes.
Unlike the very wealthy who have a large portion of their wealth tied up in stocks and the market, most of the middle-class in America have their home as their largest investment. Millions of Americans bought their home with the understanding that mortgage interest is and always will be tax-deductable, and many of them steadily paid down their mortgages to build equity in their home.
By eliminating or reducing MID, equity would be significantly decreased, home pricing would be in free-fall, one of the strongest industries in the United States would stumble and possibly crumble and the financial futures of millions of Americans would be thown into chaos.
And, for people who don't have hundreds of thousands of dollars in savings to buy a home outright, tax benefits like the MID help them begin to build a future through home ownership.
With all the economic pressures our middle class faces today, it is not the time to throw those that work the hardest under the bus.
Labels: Belmont Heights, Belmont Shore, Long Beach, Long Beach Real Estate, Mortgage, Mortgage Interest Deduction, Naples
# posted by
Dave Harbison @ 6:52 AM
