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Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.

 
Anonymous Coward
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08/26/2007 02:48 PM
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Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
Congress may mull 'carbon tax' on McMansions

[link to www.startribune.com]

Environmental concerns are behind a new bill that would limit mortgage-interest tax deductions, but real estate groups warn that it could affect prices and stability.

By Kenneth Harney, Washington Post Writers Group

Last update: August 24, 2007 – 12:12 PM
To add to mortgage meltdown miseries, the credit panic, plunging home sales and rising foreclosures, here's a new worry: a proposed cutoff of mortgage-interest tax deductions for all houses with more than 3,000 square feet.

One of Capitol Hill's most experienced and powerful legislators is drafting a "carbon tax" bill that would do precisely that. Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee, expects to introduce comprehensive climate change reform legislation once Congress returns next month.

Besides imposing hefty new federal taxes on gasoline, the forthcoming bill will, in Dingell's words, seek to "remove the mortgage interest deduction on McMansions -- homes over 3,000 square feet." Dingell said he recognizes that proposals like these will be highly controversial, but he believes they are essential to achieving the environmental goal of reducing carbon emissions by 60 to 80 percent by the year 2050.

"In order to address the issue of climate change, we must address the issue of consumption," Dingell said in talking points prepared for town hall discussions of the legislation. "We do that by making consumption more expensive."

Houses, like autos, long have been known to be contributors to greenhouse gas emissions through heating, cooling, electrical usage and building materials, plus the highways and roads needed to make far-flung subdivisions accessible to buyers. Home builders insist that they have "gone green" in recent years, and that houses constructed in the past decade are the tightest, most energy-efficient in history.

Aides to Dingell said that because the legislative language on the McMansions and other tax proposals is still being drafted, neither the congressman nor they could elaborate on the details of the plan or why a cutoff point of 3,000 square feet was chosen. The Natural Resources Defense Council (NRDC), one of the most outspoken environmental lobbies active in the climate change debate, had no immediate comment on Dingell's proposal.

Change would affect prices

But realty and building groups were quick to offer critiques. The senior economist for the National Association of Realtors, Lawrence Yun, produced preliminary estimates that terminating mortgage interest tax deductions for all single-family dwellings larger than 3,000 square feet would result in a national median house price decline of 4 percent -- on all homes, not just large houses. Yun estimated that there are at least 10.4 million single-family houses with interior areas of 3,000 square feet or more, making up about 15 percent of the nation's owner-occupied housing stock.

Dingell's plan could also push up foreclosures because every decline of one percentage point in prices leads to an additional 70,000 foreclosures, said Yun, citing industry research. A four-point price drop in a national market already swamped with foreclosures could add 280,000 more to the total.

Linda Goold, the realty association's tax counsel, challenged the Dingell plan on operational grounds. "We strongly support increasing energy efficiency in houses," she said, "but basing [taxation] on square footage rather than actual energy usage doesn't make sense."

Goold also questioned the enforceability of a federal tax increase tied to the dimensions of structures. "Who is going to do the measurements?" she asked. "Different people measuring square footage can come up with different numbers. That's why MLS [multiple listing service] listings usually say the square footage is approximate."

Bill Killmer, policy advocate for the National Association of Home Builders, called the Dingell plan "wrongheaded" in its focus on house size.

"We believe a much better approach would be to look at consumer behavior -- how efficient are the appliances they've installed, how energy-efficient are the windows, insulation, heating and air conditioning?"

The interest deduction is one of the biggest tax benefits in the federal budget, according to the congressional Joint Tax Committee. Between fiscal 2006 and 2010, according to a committee study, the mortgage interest deductions are expected to total $402.7 billion. Other federal studies have documented that the benefits of the write-off are heavily skewed toward higher-income taxpayers who have larger-than-average mortgages.

Over the past two decades, occasional proposals have been made in Congress to rein in the deduction -- say, by limiting it to mortgage amounts below $300,000. But the write-off has never been seriously endangered because it is so popular with taxpayers and has fierce support in the banking, real estate and construction industries.

Nonetheless, Killmer said his trade group takes "any proposal from Chairman Dingell very seriously because of his impressive record of legislative accomplishments" spread over 15 terms on Capitol Hill. "The [environmental] problem he is trying to solve is important -- nobody questions that," Killmer added. "We just don't think this is the right way to go about it."
Anonymous Coward
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08/26/2007 03:02 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
The mortgage-interest tax deduction was ill-conceived in the first place, and only subsidizes the mortgage lending industry at the expense of the general economy.

If you want to encourage home ownership, consider a mortgage-principal tax deduction.
LS

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08/26/2007 03:03 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
good. mcmansions are the reason why urban sprawl has reach epidemic levels. plus, if you can afford 3,000+ square feet, than you can afford to get less of a tax break.
Anonymous Coward
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08/26/2007 03:06 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
Smoke and mirrors again?
mathetes

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08/26/2007 03:56 PM

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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
good. mcmansions are the reason why urban sprawl has reach epidemic levels. plus, if you can afford 3,000+ square feet, than you can afford to get less of a tax break.
 Quoting: LS

3000 ft is not a mansion! Our house is 2900 ft and we pay 6000 a yr in property taxes. All this will do is put the nail in the RE market
For I would not, brethren, that ye should be ignorant of this mystery, lest ye should be wise in your own conceits; that blindness in part is happened to Israel, until the fulness of the Gentiles be come in.
Anonymous Coward
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08/26/2007 03:58 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
Poor rich people.
Oh, the humanity, the horror.
Anonymous Coward
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08/26/2007 03:58 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
Why are the Democrats always behind tax increases? What possible reason could anyone have to vote for a Democrat anyway?
logdog
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08/26/2007 06:01 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
Why are the Democrats always behind tax increases? What possible reason could anyone have to vote for a Democrat anyway?
 Quoting: Anonymous Coward 2298
Last time my taxes raised was 1983 Ronnie Raygun raised 33,500 and under tax bracket from 14% to 15% ! Then at same time over doubled my F.I.C.A. taxes ! 3.25 million $ bracket and over went from 79% to 39% When Raygun took office 4 Billionares now 1400 !When Raygun took office 50 lobby's now over 35000 lobby for corp. Raygun took office under TILLION in DEBT when he left almost 4 TRILLION ! DUMB ASS GO LISTEN SADDAM HANITY
Webbot

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08/26/2007 06:04 PM

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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
when are people going to wake up and start hunting down democrats with wild dogs? Not like republicans are much better but a lesser of two evils that is for sure.



THERE IS NO MANMADE GLOBAL WARMING!!!!!!!!!!


THIS NEW TAX IS THE VERY REASON ALL THE GLOBAL WARMING HYSTERIA EXISTS!!!!!!!!!



WAKE THE FUCK UP ASSHOLES
The first step is admitting your an asshole
Humpty
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08/26/2007 06:07 PM

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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
good. mcmansions are the reason why urban sprawl has reach epidemic levels. plus, if you can afford 3,000+ square feet, than you can afford to get less of a tax break.
 Quoting: LS


in our area it is also the people that want an acre or two and put a normal sized house on it

I don't support this type of tax

but a tax on an excess of energy used per occupant would make more sense
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PottsieCat

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08/26/2007 06:25 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
good. mcmansions are the reason why urban sprawl has reach epidemic levels. plus, if you can afford 3,000+ square feet, than you can afford to get less of a tax break.
 Quoting: LS


Urban sprawl exists because decent AFFORDABLE housing within the city doesn't exist the young family starting out. There isn't any mass transit for most of those suburbs and there's none in the hinterlands, so they must drive. That's useful for the Big Oil Pigs, and the automobile industry, but not useful for the rest of us.

By the way, I live in north Texas, just outside the DFW metroplex, and there are NEW houses here that are 3,400sf that were priced well below the median price. They aren't well-built, as far as I'm concerned, but they are built.

Does Dingell intend to grandfather those existing homes?

Another thing...why not REWARD those who build smaller, more highly efficient homes? Reward those who upgrade the efficiency in their existing homes? Nope. That wouldn't help them steal more of our money. This is another tax bid, and that's all it is.

Carbon tax.

They know the weather is changing because something from off-planet is affecting it, but they are still going to make us pay TAXES on that 'something.' It's a ruse.
"Until you are willing to organize your friends and neighbors and literally shut down cities - drive at 5mph through the streets of major cities on the freeway and stop commerce, refuse to show up for work, refuse to borrow and spend more than you make, show up in Washington DC with a million of your neighbors and literally shut down The Capitol you WILL be bent over the table on a daily basis." Karl Denninger

Don't blame me; I voted for Ron Paul.


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Anonymous Coward
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08/26/2007 06:36 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
"interest tax deductions for all single-family dwellings larger than 3,000 square feet would result in a national median house price decline of 4 percent -- on all homes, not just large houses."


Hey! We're gonna get these price reductions anyway when the SHTF.
Anonymous Coward
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08/26/2007 06:39 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
"Goold also questioned the enforceability of a federal tax increase tied to the dimensions of structures. "Who is going to do the measurements?" "

It's already there, the legal square footage for every house. The tax assessor has it.
jlazarus

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08/26/2007 06:49 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
good. mcmansions are the reason why urban sprawl has reach epidemic levels. plus, if you can afford 3,000+ square feet, than you can afford to get less of a tax break.
 Quoting: LS

Actually, that depends on where you live. There are lots of places (not on the coasts) where a 3000 sq foot house is very reasonably priced, and does not necessarily mean that one can 'afford to get less of a tax break'. Many people who are NOT wealthy - but who own 3000 sq ft houses - depend on that tax break.
I will accept any rules that you feel necessary to your freedom. I am free, no matter what rules surround me. If I find them tolerable, I tolerate them; if I find them too obnoxious, I break them. I am free because I know that I alone am morally responsible for everything I do. ~ Robert Heinlein
PottsieCat

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08/26/2007 06:50 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
"Goold also questioned the enforceability of a federal tax increase tied to the dimensions of structures. "Who is going to do the measurements?" "

It's already there, the legal square footage for every house. The tax assessor has it.
 Quoting: Anonymous Coward 79317


We had to have our place re-measured because it was incorrect. The selling agent knew that because she had previously measured the house for new flooring. That all came up in disclosure.

All records at the tax assessor's office are not correct.
"Until you are willing to organize your friends and neighbors and literally shut down cities - drive at 5mph through the streets of major cities on the freeway and stop commerce, refuse to show up for work, refuse to borrow and spend more than you make, show up in Washington DC with a million of your neighbors and literally shut down The Capitol you WILL be bent over the table on a daily basis." Karl Denninger

Don't blame me; I voted for Ron Paul.


Silence is consent.
zazzman
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08/26/2007 06:55 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
DEMOcrats!!!
observant
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08/26/2007 07:05 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
the impact of mcmansion sprawl has made affordable housing obsolete, eliminated farmland and open space, put heavy burdens on small communities w/ burgeoning populations and children to be educated, add to traffic congestion, infrastructure, etc....

3,000 is not a mansion but that is a big, roomy house. It really is more space than needed.

Most of these houses are energy gluttons, with vaulted 2-storey vestibules or family rooms, upstairs hallways big enough to carve out 2 more rooms, cavernous closets, and a bathroom for every bedroom.

Nobody NEEDS all that -- and they waste evergy heating and cooling over-large areas, live in a development that was once rural space, and thus miles from shopping, gas, doctors, etc, so they have to drive miles in their SUVs to get milk. Of course many drive vehicles that are big and gluttonous too.

there should definitely be a tax burden on this over consumption - in NJ, we call it property tax. But I think that the tax burden for new developments should not fall on pre-existing homeowners. In other words, the hefty property taxe would be assessed to the new homes (b/c they are putting the burden on the community) and the pre-existing homes would have no tax increase.

I also think there should be a gas tax surcharge at the pump for large luxury SUVs (escalades, explorers, etc) w/ poor gas mileage.

The people whose lust for more, bigger, better, should also bear bear the burden for the effect their materialism has on their community and the planet.
PottsieCat

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08/26/2007 07:07 PM
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Re: Here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses greater than 3,000 sq. ft.
<<<I also think there should be a gas tax surcharge at the pump for large luxury SUVs (escalades, explorers, etc) w/ poor gas mileage.>>>

In a way, there already is. Have you bought a tank full of gas for one of those suckers? Gotta take out a loan!
"Until you are willing to organize your friends and neighbors and literally shut down cities - drive at 5mph through the streets of major cities on the freeway and stop commerce, refuse to show up for work, refuse to borrow and spend more than you make, show up in Washington DC with a million of your neighbors and literally shut down The Capitol you WILL be bent over the table on a daily basis." Karl Denninger

Don't blame me; I voted for Ron Paul.


Silence is consent.

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