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SOAK THE RICH, PART II - ELIMINATE HOME MORTGAGE DEDUCTION
Just got through reading a story from the Los Angeles Times dated 12/10/2012 that indicates that Fiscal Cliff negotiations may include reducing but NOT eliminating the mortgage deduction (click here to read it).
BACKGROUND (EDUCATE YERSELF): When the federal government first began collecting income taxes from us in 1913, the mortgage interest deduction was allowed at that time, along with any other consumer interest, including credit card interest deductions and auto loan interest deductions. In 1986, the tax code was modified to eliminate the credit card and auto loan deduction, but the mortgage deduction was specifically kept because then-president Reagan said he wanted to keep it was a way to help common folks achieve the American dream of home ownership. Those who say that the mortgage interest deduction was NEVER meant to help Americans buy and afford homes would appear to be INcorrect. More recently, the home mortgage interest deduction was limited to mortages on up to $1,000,000 and you can read about that here. I was not able to find out when the $1,000,000 limitation went into affect, but it was fairly recently.
Statistics have shown that mortgage interest helps those with household incomes over $100,000 much more than those below that income level. In fact, 78% of the $83,000,000,000 (83 billion dollars) went to those with household income above $100,000. Fair enough. I would not personally call those making $100,000 a year, especially in places like Los Angeles, New York and San Francisco, "rich". I would call them upper middle class, so let's go with that. The mortgage deduction really helps upper middle class citizens own homes - these are the homes that are built (think contractors) and maintained (think plumbers, electricians, etc.) by lower and middle income earners. Wonder what reduction in the mortgage interest deduction would do to those lower earners? The law of unintended consequences would rear its ugly head again (it almost always does), should reductions in mortgage interest deduction go into affect, in my opinion.
Statistics have shown that mortgage interest helps those with household incomes over $100,000 much more than those below that income level. In fact, 78% of the $83,000,000,000 (83 billion dollars) went to those with household income above $100,000. Fair enough. I would not personally call those making $100,000 a year, especially in places like Los Angeles, New York and San Francisco, "rich". I would call them upper middle class, so let's go with that. The mortgage deduction really helps upper middle class citizens own homes - these are the homes that are built (think contractors) and maintained (think plumbers, electricians, etc.) by lower and middle income earners. Wonder what reduction in the mortgage interest deduction would do to those lower earners? The law of unintended consequences would rear its ugly head again (it almost always does), should reductions in mortgage interest deduction go into affect, in my opinion.
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SOAK THE RICH, PART I - STATE DISABILITY INSURANCE
"What an Outrage: Millionaires Get Unemployment, Too" Click on the article and read it, then read my comments below. The article is from the December 2012 AARP Bulletin, Page 8 (yes, I'm THAT old).
The AARP is irrationally opposed to millionaires who PAY THE MANDATORY UNEMPLOYMENT INSURANCE PREMIUM (aka State Disability Insurance, or SDI), and then when they get laid off, have the NERVE TO ACTUALLY TRY TO COLLECT on the insurance that they PAID for! What an outrage! Shouldn't they just shut the F*CK up and pay their mandatory unemployment INSURANCE premiums, and then when they are laid off, shouldn't those D*MN millionaires just forego collecting on the SDI they already paid for? Is this where our society is headed - Soak the rich, no matter what?
Surely, the 1 percenters don't understand how insurance works - collect on an insurance policy after they paid their premiums - how dare they? And what's next? How about having our wise and willful government confiscate the auto insurance pay-out of millionaires when they get into an accident? Isn't that the same thing? Just have the millionaires who reliably pay their auto insurance, then when its time to collect (i.e., their car is damaged by others), what right do those D*MN millionaires have to collect on their auto insurance policy? Doesn't our government need it more than the millionaires need it to fix their car? Whew. Glad I'm not a millionaire - the new public ENEMY number one, apparently.
New Legislation Proposed?: The geniuses at the AARP note that lawmakers are proposing legislation to make the millionaires continue to PAY for unemployment insurance, but NEVER be able to COLLECT. The legislation is called "The Ending Unemployment Payments to Jobless Millionaires Act" (hey, at least the name is accurate for once!), and it is said to have wide support. At least our representatives should have the B*LLS to remove the word INSURANCE from the SDI unemployment insurance payroll deduction line item on everyone's paycheck, should the legislation get passed into law. Maybe they could just call it the Unemployment Tax - just what it would become.
This is all part of an unwise trend towards Means Testing benefits and entitlements that would otherwise accrue to those who either:
(A) earn a big paycheck, or
(B) are frugal and have saved and invested for a lifetime.
Read this fine article about the trend in Means Testing and Wealth Taxation by clicking here. Even though the article in "National Affairs" was written in the Fall 2011, it still applies today and gives a thorough treatment of the subject. Don't be ignorant - read the article and decide for yourself.
In case you don't understand how SDI works, here are some quick statistics for California. The bottom line is that millionaires pay a maximum of $1,009 per YEAR in SDI, and can collect up to a maximum of $1,067 per week.
