A New Tax Deduction

Quote of the Week

Now that those of us who have been mak­ing steady, on-time pay­ments on our mort­gages for years will be pay­ing off oth­ers’ mort­gages through our taxes, can we claim a tax-deduction for our neigh­bors’ mort­gage inter­est too?

Love it. Peo­ple are angry over this and they are only get­ting angrier. This is not going to end hap­pily for our rul­ing class I don’t think. Remem­ber Newt’s Con­tract With Amer­ica? It’s gonna hap­pen again in 2010. Just wait and see.

One Comment

  • I was lis­ten­ing to National Pub­lic Com­mu­nist Radio this week and heard this ter­rific com­men­tary on why peo­ple are / should be pissed about the mort­gage bailouts, cram­downs, etc. Tran­script below.

    TEXT OF COMMENTARY

    Renita Jablon­ski: This week, Pres­i­dent Obama also revealed more details about his hous­ing res­cue plan. It pro­vides sub­si­dies to finan­cially trou­bled home­own­ers. A recent poll found 55 per­cent of Amer­i­cans think the plan rewards bad behav­ior. The poster boy for that sen­ti­ment might just be CNBC’s Rick San­telli. A recent tirade against what he calls “sub­si­diz­ing the losers’ mort­gages” is still mak­ing the rounds on the Inter­net. Com­men­ta­tor Will Wilkin­son isn’t sur­prised.
    ——————————————————————————–

    Will Wilkin­son: Love him or hate him, Rick Santelli’s now infa­mous on-air rant has touched a nerve. Shout­ing from the trad­ing floor of the com­modi­ties exchange in Chicago, CNBC’s San­telli asked: “How many of you peo­ple want to pay for your neighbor’s mort­gage that has an extra bath­room and can’t pay their bills?” The traders behind San­telli lustily booed, and I’m sure some view­ers watch­ing at home booed along with them.

    Small protests have cropped up in Seat­tle, Den­ver, Kansas and else­where as groups of dis­af­fected tax­pay­ers gather to decry the Wall Street bailouts, the stim­u­lus pack­age, and the newly pro­posed hous­ing reforms. Maybe these are a bunch of ide­o­log­i­cal spoil­sports mad they lost the last elec­tion, but I don’t think this small flame of pop­ulist resent­ment should be so casu­ally dismissed.

    Fair­ness means a level play­ing field and a sta­ble set of rules. The rules struc­ture our deci­sions. They’re inputs to our strate­gies in the game of life. Chang­ing rules mid-game tilts the play­ing field. Those who planned around the old rules aren’t wrong to feel the change is unfair.

    The hous­ing bill, for exam­ple, would help home­own­ers with neg­a­tive equity by reduc­ing their mort­gage pay­ments. This has left many who set­tled for some­thing smaller and more afford­able, or those who decided to rent rather than take a risk on a house, feel­ing a bit ripped off.

    It’s not just that some of us get bailouts, while some of us don’t. It’s that mil­lions of Amer­i­cans who played pru­dently, accord­ing to the old rules, end up foot­ing the bill. And that really does seem unfair.

    It may be that try­ing times call for extra­or­di­nary mea­sures that are bound to leave some of us unhappy. But the more dra­matic an inter­ven­tion into the econ­omy, the more it rewrites the rules and the more it tilts the field. Some peo­ple will be thrown off their game. Some peo­ple are going to cry foul.

    Jablon­ski: Will Wilkin­son is a fel­low at the Cato Institute.

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