Trump Admiin. proposes slashing key middle-class deduction to

>“I’ve seen proposals that drop it to $500,000,” said Rohit Kumar, lead on PricewaterhouseCoopers’ Washington tax policy team and a former senior staffer to Senate Majority Leader Mitch McConnell, one of the six congressional and administration leaders negotiating tax reform.

>After tabling a 20 percent business tax on imported goods and services, known as border adjustability, Republicans need ways to pay for tax cuts so they can minimize the amount those cuts would add to the deficit. The Tax Foundation, a tax policy think tank, estimates that after factoring in negative economic consequences, $308 billion could be saved over the 10-year budget window Republicans are working with by lowering the mortgage deduction.

>Like many issues in tax reform, the mortgage interest deduction divides more along parochial than ideological lines. Conservatives and progressives alike criticize the deduction as inefficient and more useful for wealthy taxpayers than the working class it’s supposed to help put in homes. But its popularity with homeowners in more expensive areas and with the real estate industry have helped it weather past attempts to cut or eliminate it.

>“There’s not a lot of conservative support for the mortgage interest deduction,” said Ryan Ellis, a conservative tax lobbyist.

>One example: In February, Mark Calabria, then a financial regulatory expert with the libertarian CATO Institute and now Vice President Mike Pence’s top economic adviser, and progressive housing activist Diane Yentel penned an op-ed in favor of reducing the mortgage deduction.

>Conservative support for cutting the deduction, combined with smoke signals out of the White House that a reduction could be a part of a broader tax reform package, has the real estate and building industries concerned.

>“[L]imiting the mortgage interest deduction amounts to a de facto tax increase on current or future homeowners while putting homeownership further out of reach for prospective buyers,” said National Association of Realtors President William Brown in a statement. “We would have strong objections over any effort to further cap or limit the deductibility of mortgage interest.”

>Brown added that he hadn’t seen a sure signal that capping mortgage interest would definitely be in a tax reform proposal, though a $500,000 cap was brought up as an option at the White House, according to those who attended the meeting.

>Another part of the calculus for the Trump administration and congressional conservatives: Use of the deduction could dramatically drop if Republicans push through the doubling of the standard deduction that individuals can take instead of itemizing different tax write-offs.

>Reducing the mortgage interest deduction "gets a little tricky because it depends on what else you’re doing on the individual side,” said Kumar, who added that it’s only on the table if Republicans follow through on their goal of doubling the standard deduction.

>By some estimates, doubling the standard deduction could lower by 90 percent the use of the mortgage interest deduction by middle-class Americans, eroding much of the argument for keeping it.

>That’s made the Republican proposal to double the standard deduction a proxy battle over the mortgage benefit. Even though the administration signaled it would keep the mortgage interest deduction in the tax code when Cohn and Treasury Secretary Steven Mnuchin announced Trump’s tax goals this past spring, the National Association of Realtors blasted the inclusion of doubling the standard deductions in those goals.

>House Speaker Paul Ryan reiterated doubling of the standard deduction as a goal in tax reform during a meeting with conservative groups on July 28.

>“By doubling the standard deduction and repealing the state and local tax deduction, [Trump’s] plan would effectively nullify the current tax benefits of owning a home for the vast majority of tax filers,” NAR said in a statement tied to the release of Trump’s tax goals.

>Still, the industry hopes for a near-literal Trump card in the form of the president and his family's deep ties to the real estate industry.

>“I’m not so sure it’s going to translate into legislative language,” said one lobbyist tracking the issue, citing Trump’s real estate business. The same lobbyist anticipated a “broad-based campaign” in opposition to any reduction in mortgage interest this fall if the proposal stays in the tax reform conversation.

Lets pretend that this isnt "someone familiar with his thinking" tier fake news for a moment.
>reducing mortage interest as a deductable to 500k
>Implying the middle class is buying houses worth 500k
For my non american friends, the middle class in America has a wide range of housing options, buying your own home rarely exceeds 400,000 unless you want a house thats actually in "the city" or in an affluent neighborhood. The abundance of land and lack of chinese megacorp investors means living in a suburb in 80% of the country is dirt cheap (comparable to canada or australia). This would exclusively be a tax on the rich but for some reason the article keeps invoking working class and middle class.

>>170527
The author has probably never looked for housing outside of New York city or Los Angeles where a decent home is over 500k. My family got a home in a nice suburb in Minnesota for 400k at the height of the housing bubble.

>>170527
where I live single family homes start at around 0.6m for something small, up through 2.5m for a brand new home in a private managerial class neighborhood. One bedroom apartments are 1600 or so in the crappy part of town where you need bars on your windows, and as much as double that in the nice areas of town.

houses are only cheap if you live in the middle of nowhere

>>170538
https://m.trulia.com/home_prices/
>Average home listing price is under 400k in most of the country
>Average home bought is under 250 in 90%+ of the country
Id chalk it up to urbanites forgetting that half the country isnt in an urban setting again.
https://www.tax.ny.gov/research/property/assess/sales/resmedian.htm
>NY average home list price 556k, literally one county where its more expensive than 556k
Cities drive up costs of real estate. Middle and working class are not the ones buying 600k homes in NYC. They are going out to warwick and jersey for 300k houses and commuting if they are middle class. No idea what working class do, never knew any.

>>170545
>Urbanite forgets there is life outside of the city
If you want to be anecdotal my 2k sqft home is 5 minutes from everything, fish market, butcher, weekly farmers markets and regular grocery stores, 30 minutes from entertainment, low crime rate. 120k then another thousand bulding a fence. What exactly is in the city that makes it so important to live there that you are willing to go over half a million for a shoebox?

do democrats are on charge now.... keep squeezin the middle/working class, jerks.

>>170549
if you want to live in the middle of nowhere go for it, but a huge number of Americans do not

>>170553
I dont think you know what "middle of nowhere" means. I am literally in a city on the main drag, just because it isnt LA or NYC doesnt make it middle of nowhere. But you missed the end of my post. What makes living there worth it? Do you enjoy the living conditions of a sardine?

>>170527
if you live in rural area or suburbs of small cities then good for you but just because not everyone is affected doesn't mean a good chunk of the middle class isn't.

I don't get why it's suddenly asking too much that the American middle class be able to afford homes in their own major cities.

>>170555
>Do you enjoy the living conditions of a sardine?
I enjoy not having to commute.

>>170576
I think you misunderstand. The issue Ive taken with the article is the repeated invocation of middle and working class(the poor if we stop being polite) as the victims of this change to the tax code. A 500k dollar house is not the middle class, or even upper middle. By American standards $150,000 household income is upper middle class and that gets you 350k worth of house if you have great credit. Your average American family is closer to 65k with "middle class" being between 95k-149k houshold income. Living within a major city, on your own plot of land, is going to be expensive, far beyond the means of a middle class family. Whether this is morally right or wrong is a different argument altogether. If you dont want to commute then thats that, nothing to speak to on my end, just different priorities.

>>170527
>bought 1840 sqft house in northern California for 220k.
There are very few houses in my college town that exceed 500k. This would only affect upper middle class and above.

Performance of the stock market reflects executive compensation moreso than anything else. Our stock market continues to break records but our actual economic growth is quite steady, real wages remain stagnant, and unemployment is at 5%. It's not just at 5%, we have millions of jobs that too few Americans are qualified to serve as candidates.

The sane solution for any modern economy here would be to exclusively increase the income tax and corporate tax rate in order to reduce the deficit and subsidize discretionary spending that protects the working class and maximizes their social mobility. The middle class and working class spend a larger portion of their income and they are more likely to spend it domestically. When they start businesses they set up as an llc so small businesses escape taxation anyway.

After decades of growth in executive compensation, we've milked that path for all it's worth. Growth in wages and protections for the middle class and working class should be our priority. Each dollar spent there does more to improve standards of living, does more to tool Americans to occupy millions of job openings for skilled labor that already exist, and more of the money in the paychecks for the middle class immediately finds its way back into the US economy. And we have historic precedent. In the 1950s when our economy became a hyperpower, our top marginal tax rate was 91%.

>>170579
How is the middle class not a victim of this when it's just going to mean more middle class are going to be pushed out of affording homes in metropolitan areas?

>Median house price for my county is $1,375,000
>tfw can't afford to buy a house
>tfw also live in the middle of nowhere

RICH FUCKS GET OUT OF MUH STATE

>>170592
Thats pretty irrelevant when the change to tax deductions is still about ~100k away from changing anything for even the uppermost crust of the middle class, its the same as any county/neighborhood of weathy folks pricing out everyone else. I will personally never understand the desire to live in a metropolitan area and I personally think more people experiencing life out in the smaller 50k-100k population cities would be pleasant for almost everyone involved. Victim isnt really a way I would describe it so I might be a terrible person to talk about this with. Do you have a job that requires you to work in a city?

>>170592
Because that is solely defined by supply and demand. Supply of space near cities is fixed. Demand of said space tends to grow. This is simply reality. If you want affordable housing you might have to move.

>>170599
Just under two thirds of Americans would disagree with your sentiment.

>>170606
>supply and demand=good city planning
Now I'm no city planner, but you sure don't sound like one either.

>>170607
>Ill buy that lot for 100k
>Counter at 120k
>Another bid, 150k
>...
>Sold 600k
Its not city planning. Its much wealthier people than us outbidding us. Why sell a house for 400k when someone else will buy it for 600k?

>>170612
You kinda need people across the income scale to have reasonable access to your city center. Having a city where it's more difficult for the working poor to live in, means inflated the price of the goods they create and services they offer. This is fine for things being made and sold to people living within your city. Because it's self regulating. But if you have industries that sell goods elsewhere, they may want to take their campuses to a place where they don't have to pay for their employees' inflated cost of living.

You also benefit from people being property-obliged to live there. Without it, you encourage renters. Renters don't create value for themselves by paying to live somewhere. They have no obligation to stick around when the going gets tough. And enough of them makes your roadways very difficult to manage.

Have you considered that the customer is not always right?

>>170624
>You are now aware of a major point why Detroit failed
You need to take a more pragmatic approach to understand my point. You are laying out basic conditions to make the ideal city, but ignoring that such an ideal requires an ideal man or men leading the city in the city's best interest. Its little more than daydreaming about a utopia. Some cities will be fine by right of being major harbors or having different natural qualities that cant be moved. Others, for example Cleveland, are going to be buttfucked when Lebron James retires. Besides, its not as if not owning a home in the city limits is the same as not being able to own a home at all. It just means that, when in a bidding war for this particular lot, someone who makes triple what you do wants it and is willing to double your offer for it. Youll just have to commute like the rest of the middle class if you want to own a little slice of land