Wealthy benefit disproportionately from the mortgage interest deduction

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Source: http://fivethirtyeight.blogs.nytimes.com/2011/07/13/despite-benefit-disparities-middle-class-supports-mortgage-deduction/

[mawilson 2,133]

Poor schmucks don't own homes.

[Gary and Alla 3,694]

They also buy more expensive homes that employ more people to build them.

If you do not like the tax situation then support the FAIR TAX, it eliminates all these breaks for the rich. Same rate for all!

[dalegg 143]

Two things I find interesting about this story.

First, about 1/4 of people making over $100,000 a year still aren't buying a home. Unless they already own their home, that's pretty bad.

Second, the level of "wealthy" has now been lowered to just $75,000.

"But not only do the wealthy disproportionately claim the mortgage interest deduction. They disproportionately benefit from it, as well. Twenty percent of tax filers report an income of $75,000 or more. In 2009, these tax filers reaped 60 percent of the financial benefits from the deduction. Tax filers with an income of $20,000 to $40,000, on the other hand, make up 23 percent of all returns."

Maybe we should bring back sub prime loans to solve this problem, eh?

[LaL 418]

Two things I find interesting about this story.

First, about 1/4 of people making over $100,000 a year still aren't buying a home. Unless they already own their home, that's pretty bad.

Is that bad? I actually thought that was pretty good?

[dalegg 143]

Is that bad? I actually thought that was pretty good?

I think it's bad. If you can't purchase a home with a $100,000 salary then either housing prices are either still too high in a lot of areas of the country, or people are in serious debt, or there are just that many people who don't believe in owning. None of which is good.

[mawilson 2,133]

I think it's bad. If you can't purchase a home with a $100,000 salary then either housing prices are either still too high in a lot of areas of the country, or people are in serious debt, or there are just that many people who don't believe in owning. None of which is good.

Sometimes renting is cheaper than paying property taxes and mortgage interest.

[LaL 418]

or 25% of that group have either paid off their mortgages, choose to rent. i guess I just don't see that as bad - of course I could be reading the chart wrong!

Edited July 17, 2011 by LaL

[Mr. Big Dog 10,747]

Sometimes renting is cheaper than paying property taxes and mortgage interest.

Plus, there are a number of folks in that income range that want to remain flexible in terms of location. If you know or even feel that your career path has frequent moves attached to it, then why buy?

[Trompe le Monde 1,107]

I think it's bad. If you can't purchase a home with a $100,000 salary then either housing prices are either still too high in a lot of areas of the country, or people are in serious debt, or there are just that many people who don't believe in owning. None of which is good.

Where I live anyone who earns that salary will only be able to afford a crappy condo in an okay area on a conventional mortgage, and that's with prices declining 30-50% since the crash. And guess what? Prices are are still coming down. Where I live, not buying over the past 6-7 years has been a smart move.

Edited July 18, 2011 by Trompe le Monde

[dalegg 143]

Where I live anyone who earns that salary will only be able to afford a crappy condo in an okay area on a conventional mortgage, and that's with prices declining 30-50% since the crash. And guess what? Prices are are still coming down. Where I live, not buying over the past 6-7 years has been a smart move.

Even with interest rates being as low as they are? I live in OC and I'm pretty confident that if I was going for a 30 year loan today with $100K, I'd get a house.

[Trompe le Monde 1,107]

But prices are still coming down. Sure, you could buy something, but it wouldn't be a good investment...especially if you weren't in it for the long term.

[mawilson 2,133]

Even with interest rates being as low as they are? I live in OC and I'm pretty confident that if I was going for a 30 year loan today with $100K, I'd get a house.

How much can you afford with a $100k salary? A $400-500k home? In NYC, that's a tiny studio.

[spookyturtle 9,465]

How much can you afford with a $100k salary? A $400-500k home? In NYC, that's a tiny studio.

My trailer was only $1999. Used.

[mawilson 2,133]

My trailer was only $1999. Used.

Parking a trailer in NYC will cost you $1000 per month.