The tax penalty I pay for renting my apartment dwarfs the ACA's tax penalty

[Recursion]

Using the tax code to incent behavior is nothing remotely new.

The average mortgage interest deduction in the US is about $3000 (that's from pre-crash numbers, though, so take that with a huge caveat). I chose to rent rather than buy in DC's market for various reasons (which, in retrospect, seems to have been the right decision), but that put me afoul of our home mortgage mandate, so I paid a $3000 tax penalty this year.

We want people to own rather than rent (even though that's not a particularly great idea in East coast cities). So we use the tax structure to incent that commercial activity, and to punish the lack of that activity. It's not a new idea, and the ACA's hand isn't even that heavy as these things go.

[JDPriestly]

1. Very true. And if you own your home, say you live in your parents' home and it's paid for,

you also pay a tax penalty. Of course, you are better off financially than you would be if you were buying your house and paying your mortgage.

Renters do have to pay more. Our tax system does give incentives to homebuyers and to those who buy insurance.

And in a way the rationale is similar.

We reward people for taking responsibility for a property and for paying for their own healthcare.

Both ends are desirable in our society. That's why.

We want people to own their homes so that they will maintain them. We want people to buy health insurance so they don't have to rely on the government's covering the cost of their emergency care.

In states that don't fully implement the ACA, those that choose not to expand Medicaid, who will pay the cost of care for their indigent or low-income citizens when they go to the hospital for care?

Will the federal government pick up the tab? Or the state? Or will the cost be spread out among those who pay for insurance? I suspect the last alternative is what will happen.

[sabrina 1]

8. Incentives yes. But people are not penalized for not buying a product they

cannot afford. The Mandate is wrong, always was and was always opposed by Democrats, including the President. Commodities in a free society should not be mandatory.

If you want to encourage people to buy a product, and sadly HC is a just a product rather than a right, in this country, then entice them by making it attractive. But no one should be forced to buy a product by being punished if they don't.

Now make HC a right and then everyone chips in to pay for it. Iow a National HC System. I NEVER supported Mandated Ins, not going to start now.

[Recursion]

9. Do you also oppose the home mortgage mandate? (nt)

[sabrina 1]

10. I would if I were being forced to buy a home. Are people forced to buy homes now?

As President Obama said during the Campaign regarding Mandated Ins: 'If forcing people to buy homes would solve Homelessness, we would do that'. I couldn't have agreed with him more, back then. It was one of the reasons I supported him.

[Recursion]

11. I pay a tax penalty for not buying a home. Same thing that happens if people don't buy insurance

In fact, I pay a larger penalty than the non-insured do. Is that "forcing" me to buy a home? Is that "forcing" them to buy insurance?

[Skittles]

2. did you factor in how much they pay in interest?

or how much they lost when the housing market tanked?

[Recursion]

4. Did you factor in how much insured people pay in premiums?

No, because neither of those affect the penalty

[Skittles]

5. ???

I'm not referring to the ACA at ALL

[Recursion]

6. Right, but my OP is making a comparison between ACA's mandate and the mortgage interest deduction

Both having a mortgage and buying insurance incur costs. And they're both activities we are trying to get people to do by tax incentives.

[treestar]

12. But also how much they gain when the market goes up

Housing values generally increase. That is why people take on big loans to buy them.

[sl8]

3. It's not that simple

Last edited Sat Oct 5, 2013, 08:54 AM - Edit history (1)

Did you claim the standard deduction? For 2012 that was $5,950 for single filers, more for head of household and joint filers. You couldn't have claimed that if you itemized.

Even when you have mortgage interest you could claim, it doesn't always make sense to do so:

http://homeguides.sfgate.com/taxes-mortgage-interest-vs-standard-deduction-40780.html

Also, a tax deduction isn't the same as a tax credit. If you can deduct $3000 in mortgage interest, that's subtracted from your taxable income, not from the tax you pay. The reduction in tax will be far less than $3000.

[TheKentuckian]

13. I don't support the deduction. You shouldn't be subsidizing that choice, I wouldn't for vote it.

I see no serious opportunity to gather support from enough home owners to rescind it so we are stuck with it but that doesn't mean I embrace similar logic as a great way to dictate other behaviors. Particularly, when that behavior is forced participation in an irrational market. You want to prop up an irrational market, do so out of the commons like we do for streets, police, fire, food inspection, and national security.

Eventually, I would like to balance this by offering relief to renters in someway. I think if framed correctly, that would be something that folks could support even if they would fight like rabid wolverines against killing their of their deduction might be fine with another being granted even if logically the money floating around has to come from somewhere.

I also don't accept the Roberts court changing clearly expressed legislative intent in yet another episode of going outside their constitutional authority. Throughout the process the responsible legislators were in agreement that they were not applying a tax but rather a fee. The switchover should not be possible by judicial fiat in our system and a fee would have been struck down for equal protection reasons so the judiciary pulled the legislative fat out of the fire by magically transforming clear, repeated, and even strenuously argued intent rather than doing what they were supposed to and return the law to the legislature for revision, which I'm sure is okay with many Democrats because that would mean the reform would be dead because an election had changed the composition of Congress in such a way to make any revision impossible but that is exactly what should have happened under our system and the sole fault of the legislators for their stupid and inept intent, purely for political messaging at the time in a vain attempt to avoid honestly raising taxes as stated by a nonsense political promise that clearly was of little to no importance though it was used to justify a lot of silliness around revenues at the time.

Look, we have been triangulated into supporting the implementation rather than allowing the TeaPubliKlans to rule by conjured crisis and hostage taking. We know this so all trying to sell the shit does is irk nerves, at least for me.