November 01, 2005

Connie Mack Again!

The Tax Panel report is in.

Daniel Gross, at Slate:

On the one hand, gutting the mortgage-interest deduction seems progressive, because the deduction now favors the well-off: The mortgage deduction gets more generous the more expensive the home you buy, and the more income you have. And property taxes are generally a function of home size and value. On the other hand, regional variations in home prices and state and local taxes would heavily skew the burden of these tax changes onto blue-staters. Who has the most to lose if the mortgage deduction is capped at $313,000, and if you can no longer deduct local taxes from your taxable federal income? People who live in places where (a) real estate is expensive; (b) states and/or cities tax income; and (c) property taxes are high, to support local schools and services. In other words, people who live in California, Seattle, the entire Atlantic seaboard from Maryland up to Maine, and well-off suburbs of Chicago. If you live in a $300,000 McMansion in a state with no income tax, like, say, Texas or Wyoming, these changes aren't likely to affect you at all. But if you just bought a $700,000 house in Takoma Park, Md., you're screwed three ways.

Why, the Treasury Secretary is so happy he can hardly stand it!

Via The Liberal Avenger.

Posted by binky at November 1, 2005 04:20 PM | TrackBack | Posted to Economics


Comments

Alleged "Pro-Growth" tax plans = Economic vampirism.

'Nuff said.

Posted by: StealthBadger at November 1, 2005 09:13 PM | PERMALINK

Well, it is (more or less) Holloween. What does an economic vampire suck?

Posted by: baltar at November 1, 2005 09:33 PM | PERMALINK

Well, I'd agree with the panel in that the AMT has to go. And most politicians desperately want it gone. Yay! Now if they'd only find time to leave a fundraiser to so that they could get down to Congress and trash it ... But I'm not at all sure about this mortgage-interest response is a good way to replace the revenue that'll be lost by getting rid of the AMT.

Posted by: Armand at November 2, 2005 09:34 AM | PERMALINK
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