Anyone know? Elizabeth Warren's position on home-mortgage deduction?

[Trillo]

I've been receiving emails (yes, more than one from apparently-different sources) this morning to sign on to Warren's financial reform. Here's one such referral URL,

http://action.civilrights.org/site/Survey?ACTION_REQUIRED=URI_ACTION_USER_REQUESTS&SURVEY_ID=4461

One of the bullet points says, "Force companies to rely less on debt by ending the tax-deductibility of interest payments".

Does Warren's plan include eliminating the home-mortgage deduction for home purchasers that require a mortgage to purchase?

[still_one]

1. That is hard for me to believe.

[Trillo]

2. You don't believe the text at the linked petition site? NT

[still_one]

6. No. I am skeptical about the comment at the end of the OP implying she wants to end mortgage deductions

That quote is the following:

"Does Warren's plan include eliminating the home-mortgage deduction for home purchasers that require a mortgage to purchase? "

That is not what the petition says.

The closest thing I could find is the following:


" Rosner and other reformers, including Raj Date, an ally of Warren's at the Consumer Financial Protection Bureau during the agency's formative years, had advocated doing away with the convoluted subsidies of the Fannie and Freddie system in favor of a private market with more straightforward tax credits. Rosner advocates a special tax program to help low-income families save for a down payment. He has also argued that the mortgage interest deduction, which rewards families for taking on debt, should be swapped out for a mortgage equity deduction, which rewards families for paying it down."

http://www.huffingtonpost.com/2014/07/14/elizabeth-warren-housing-finance_n_5577687.html

That quote is not directly from Warren, and I would like to her a direct quote from her before I believe she is for eliminating it

[Erich Bloodaxe BSN]

3. That's kind of an odd jump.

Are you wanting her to be for or against eliminating home mortgage deductions? Or for some nuanced, in between action, such as limiting the amount that can be deducted each year, so that people who buy cheap homes can deduct it, but people who buy multi-million dollar mansions only get to deduct some percentage thereof?

[Trillo]

7. I simply read that phrase of the petition,

and wondered what her position was on the home-mortgage interest deduction, and whether that was some arcane legal phrasing that would include homeowner's interest deductions.

I do not know, that's why I'm asking.

[Erich Bloodaxe BSN]

9. And I don't know where you stand on the issue, which is why I asked you directly.

I'm not in Warren's inner circle, so I can't ask her her stance, but you were right there, so I figured you would know what you would prefer.

Personally, I'm for the third possibility - allow home mortgage deductions, but limit them, such that anyone can take deductions up to, say, 10 or 20k a year tops on the home in which they reside if they're paying interest on it. I think I only ever claimed maybe 5 or 6k at the height of my interest payments, but I know I live in a cheap part of the country compared to many.

[Trillo]

13. Limiting higher end ones may make some sense.

I tend to think simplistically in terms of incomes versus expenses. Loan interest is, simplistically, an expense. That said, there may be good reasons to limit them.

Income inequality appears the root of this problem, and how best to approach fixing that is a topic worthy of discussion. The more complicated the law becomes, the more need for specialists in related areas: complexity inherently favors corporations who employ entire staffs of experts, while mere citizens can only rely on themselves.

I haven't looked at the home market in our area for some time, I live in our house, we purchased it for $105K some years ago, and have not considered selling it. Many basic homes in our rural area cost $300K or more these days. That would be very roughly 24K in yearly interest payments, of course depending on interest rates. A city center would probably be a better market to look at than our own. Prior to 2008, modest homes in San Diego (not apartments or condos) 3 bedroom 2 bath homes on a small, city size lot were selling for 1/2 million. So, I'm thinking even your 20K figure would not be high enough to allow middle income folks to retain their home-mortgage interest deduction.

[Erich Bloodaxe BSN]

14. You might be right depending upon what you call 'middle income',

but they'd still retain some percentage of it. Even your multi-million home buyers would still be able to deduct that first 15 or 20k, just not the interest above that. That's why I like setting simple, straightforward fixed limits - almost anybody can follow the simple instruction of 'If you paid more than 20k in mortgage interest on the home in which you live this year, enter 20k on line 20, otherwise enter the amount below 20k that you did pay in mortgage interest on the home in which you live this year', without needing an accountant.

[okaawhatever]

4. IDK but tax regs for corporations are different from individual returns. Also, they ended the tax

deductability of credit card payments but kept the home mortgage deduction.

[Trillo]

8. Yes, there is no more deductibility of credit card interest payments. NT

[PoliticAverse]

5. Homeowners aren't 'companies'.

Here's an article from 2012 that mentions her position on the matter: https://westernmassrealestate.wordpress.com/2012/10/11/senator-scott-brown-indicates-elimination-of-mortgage-interest-deduction-on-the-table/#more-1442

Warren said that she would preserve the popular deduction. However, an opinion piece in the Boston Globe stated that Warren has been wishy washy on this issue as well, but she may be indicating her support for President Obama’s proposal to eliminate the mortgage interest deduction for those making over $250,000. She has been campaigning as a champion of the middle class.

[Trillo]

10. Thank you, that does help.

I think many of us who are not lawyers do not trust that the legal definitions of words are the same as the commonly understood meanings. I'm not sure whether a citizen is a company or not with respect to legal jargon.

[NYC_SKP]

12. I might not oppose eliminating the deduction for the top earners.

And especially when they own seven homes.

[upaloopa]

16. The deduction is only on your principal residence

You can deduct interest on rental property because it is used to generate income.

[Sheepshank]

15. BUT...many families making under $250K (gross or net is not clarified) ........

set up trusts, LLC's and other entities and those entities carry the mortgage and the title to the home for liability reasons. I suppose all of those things could be worked out in the fine print, which isn't in print at this time.

[NYC_SKP]

11. NO NO NO. She's not talking about the home mortgage interest deduction.

She's talking about deductions taken by corporations, it's one of the games they are allowed to play that get's them closer and closer to paying no taxes at all.

http://www.uspirg.org/issues/usp/close-corporate-tax-loopholes

http://dealbook.nytimes.com/2015/02/18/8-tax-loopholes-the-obama-administration-could-close/?_r=0

The sender of your email is legit.

http://www.sourcewatch.org/index.php/Americans_for_Financial_Reform