November 19, 2012

Limiting deductions will raise taxes in some states much more than others.

The Wall Street Journal explains:
California taxpayers... averaged $33,901 in deductions, in part because they claimed the U.S.'s highest average mortgage break, $15,755.

After California, the highest average itemized deductions—all over $28,000—were claimed by taxpayers in New York, the District of Columbia, Connecticut, New Jersey, Maryland and Massachusetts. All have high state, local and property taxes, which may be deducted from income on federal returns, although other tax provisions already limit some deductions.
Does this make the limiting of deductions less fair than raising tax rates? Don't the same people who have those big deductions also have higher incomes? Aren't these places where everything is more expensive? It's perverse that these are the blue states, and it's the Democrats who want to raise taxes.

82 comments:

LarsPorsena said...

Oh! California. 1/8 of the US population and 1/3 of the welfare cases. The beauty of a Democratic dominated state.

Scott M said...

I suppose it makes it about as fair as making $250,000 the line in the sand for raising taxes without any qualification for region, metro or other cost-of-living considerations.

SteveR said...

I suppose that if you want the federal government to redistibute wealth and being a Democrat essentially says that, then pay more taxes, since you are "rich".

Haiku Guy said...

Another way to look at it is that the deductability of local taxes amounts to a transfer payment from the Federal goverment to these high-tax states.

Why should Red America be subsidizing bloated government in Massachusetts and California?

AJ Lynch said...

Capping the deduction of state and local taxes will make the taxpayer turn his attention onto the high levels of state and local spending. That will put the state and local pols on the spot. So capping deductions is a good thing.

cubanbob said...

Democrats believe in taxes. They should pay them. And the republicans should up the ante and propose to eliminate the tax excemption for municipal and state bond's interest income and tax foundations and non-profit's on their investment income along with require them to pay property and other local and state taxes or lose their charitable tax status. No more free riders.

Hagar said...

The Federal tax system makes no sense whatever, and enacting more "directed" tax policies will only make things worse.

The only thing I want to hear about is a complete overhaul to a very simple straightforward structure.

LarsPorsena said...

Blogger Haiku Guy said...

Another way to look at it is that the deductability of local taxes amounts to a transfer payment from the Federal goverment to these high-tax states.

Why should Red America be subsidizing bloated government in Massachusetts and California?

11/19/12 8:43 AM
__________________________________

You forgot Illinois.

X said...

I don't see why other federal taxpayers should subsidize local & state taxpayer choices to have high local and state taxes.

Pogo said...

If we only a little bit to the current tax code, then everyone will be by definiton a tax criminal in some way, and all their property can be thus confiscated.

Why not?
SCOTUS will support our serfdom.

Tim said...

"Does this make the limiting of deductions less fair than raising tax rates? Don't the same people who have those big deductions also have higher incomes? Aren't these places where everything is more expensive? It's perverse that these are the blue states, and it's the Democrats who want to raise taxes."

In a word or two, "fuck 'em."

The assholes want expansive, expensive government to run all our lives and steal property to redistribute wealth?

Fine.

Start with the assholes who vote for this shit.

Make them pay the bill.

cubanbob said...

And speaking of foundations they should no longer be allowed to charge their overhead to their required annual 15% distribution and all tax credits other than those allowed by tax treaties be abolished. Since according to the proponents of big government and entitlement spending everyone benefits from government spending everyone should pay them.

Tim said...

LarsPorsena said...

"Oh! California. 1/8 of the US population and 1/3 of the welfare cases. The beauty of a Democratic dominated state."

Yes.

So easy to mock, and deservedly so.

But know this: California's present is America's future.

Hari said...

I think it's unclear exactly how this would work without understanding the impact of the AMT. So here's a simplistic question with slightly unrealistic numbers:

Suppose someone does their taxes the normal way and comes up with a federal tax bill of, say, $200,0000. They then get hit by the AMT and pay, say, $225,000.

Now, if the Bush tax cuts expire (and nothing else changes)what happens? Would they do their taxes the normal way and with a higher marginal rate have a bill of, say, $240,000 (with the AMT still at $225,000 and therefore irrelevant); or would the AMT also go up to, say, $250,000?

To put it another way,would people who did not get the full benefit of the Bush tax cuts because of the AMT not get hit with the full impact of the Bush tax cuts expiring? And if so, then these people never really had the full benefit of their tax deductions and would not be hit hard by a reduction in these deductions.

cubanbob said...

Big government and big spending is only popular as long as one doesn't have to pay full freight. Eliminate all deductions other than the standard deduction and tax benefits as income. Everyone benefits and therefore everyone should pay. Once these reforms are in place lets see how popular big government and big government spending really is.

MartyH said...

While we're talking about how screwed up CA is, did you know that the last time CA's unemployment was lower than the national average, Barack Obama had just been elected President...of the Harvard Law Review. Bush had not invaded Iraq-Bush the Elder, that is. CA has the longest streak og any state of above average unemployment-longer than Michigan, or even DC. This state hates workers.

Rusty said...

I think my surtax on all public employees municipal, state , and federal is a fair one. If they are going to lobby to raise taxes then they should have some skin in the game. I think 5% on those employees making less than 100,000 dollars is fair, and 10% on everyone making more than that is fair as well.

Another tax I think is fair is a tax of one cent a word on all legislation. The tax to be borne by those who propose said legislation.

BarrySanders20 said...

Rather than eliminate any particular deduction, just cap the total itemized deductions at some amount (say $50,000) and cap tax credits at some amount (say $10,000). Taxpayers can allocate among that various deductions to include home mortgage, state income taxes, property taxes, charitable contributions, etc. but cannot exceed $50,000 total. This will minimize the power of the rent-seekers who lobby for the continuance of their deduction and force them to compete with other rent-seekers for the limited itemized deduction dollars. High-tax blue staters might force refrom of state and local taxes if they cannot deduct the full boat of high state & local income taxes, real estate taxes, and home mortgage interest.


Also, get employers out of the health insurance racket to eliminate the untaxed health insurance benefit as part of compensation. This has encouraged overconsupmtion and, together with the lack of incentive to use less care and use more efficient providers, resulted in excessive prices for health care. Employer-sponsored health insurance is another $15-$25,000 deduction from what would otherwise be taxable income. Forcing people to recognize this as taxable would encourage people to seek less costly care.

Then lower tax rates for all.

Rent seekers be damned.

Fr Martin Fox said...

It's tempting to enjoy the thought of socking it to the rich backers of Obama with higher taxes--and trying to fine-tune those tax increases to maximize their pain...

But the fact remains that steeper progressivity is bad policy. We used to have steeper progressivity, and Democrats and Republicans both worked to level them. Now we're going back.

Big Mike said...

There's one question I ask Democrats. It's a three-parter. Part 1 is how many wage earners does it take to support one person on Social Security? Part 2 is how many tax payers does it take to support one person on welfare. Part 3 is how many tax payers does it take to support one government worker.

Mostly they don't get it. Yet the numbers are real, and the equations don't have any sympathy, so we are headed for a crash unless a few key Democrats start acting like responsible adults.

Rusty said...

Big Mike said,

"Mostly they don't get it. Yet the numbers are real, and the equations don't have any sympathy, so we are headed for a crash unless a few key Democrats start acting like responsible adults."


What's the spread on that?

MadisonMan said...

Eliminate all deductions, and have a simple, flat tax. What could be easier?

I also like the idea of businesses getting out of the health-care benefit business. Give the extra money to your employee and let them do the work themselves.

Joe Schmoe said...

In the Democrat world, forcing a company like Hostess to close is considered a victory for the union forces that all lost their jobs as a result.

For reasons that evade me, wealth reduction is now chic and desireable. If you get rid of the mortgage interest and property tax deductions, not only would CA and NY blue staters pay more federal taxes, but their home values would also likely trail in appreciation as a result. Apparently win-win for them.

Fr Martin Fox said...

MadisonMan said:

"I also like the idea of businesses getting out of the health-care benefit business. Give the extra money to your employee and let them do the work themselves."

That would mostly solve the conflict over Mr. Obama's contraception mandate, as employers would no longer be in any way complicit in what their employees' purchase in their health plans. The problem of Mr. Obama coercing the policy-holders themselves would remain, however.

Tim said...

"But the fact remains that steeper progressivity is bad policy. We used to have steeper progressivity, and Democrats and Republicans both worked to level them. Now we're going back."

Yes.

And, the fact remains, voting for Obama is bad policy.

Eight of the ten richest counties in America voted for Obama.

They own this.

So, send them the bill.

Maybe suffering the direct consequences of their bad policy choices will cause them to learn something.

Immunizing people from their failures does nothing to promote accountability or learning. It only perpetuates failure.

Seeing Red said...

I'm in a blue state, elections have consequences.

Fr Martin Fox said...

Tim:

Yes, but the whole country suffers as a result.

Also, the stupid GOP doesn't help it's cause when it destroys whatever credibility it has left. The GOP used to be the party of smaller government and less spending, as well as lower taxes. The stupid Republicans have lost credibility on the first two, if they vote for this, they lose the third.

Hey, but they can always blame the pro-lifers and the Tea Party! Look, a squirrel!

Seeing Red said...

People forget, Father.


Those who do not remember history......

My generation should have, but they've spent far too long having it easy.

Seeing Red said...

Mitt had a plan like this, cut deductions, don't raise marginal tax rates.

Seeing Red said...

I don't think they'll wake up. Look at Hurricane Sandy. They won't learn their lesson.

Tim said...

"It's tempting to enjoy the thought of socking it to the rich backers of Obama with higher taxes--and trying to fine-tune those tax increases to maximize their pain..."

But Obama said, "vote for revenge."

O.k.

So:

1) Capital gains above $100,000 taxed as regular income;

2) Mortgage deduction limited to 80% of the average cost of homes within the taxpayers zip-code;

3) Mortgage deduction limited to owner-occupied residence, i.e., no deductions for second, vacation or rental income properties;

3) Estate tax 100% on any amount over $1 million, including life insurance, annuity and pension beneficiaries;

4) Tax as income any amount paid by an employer for health care coverage over the amount of the average policy available in the taxpayer's state exchange, no exclusions, i.e., public and private union employees aren't excluded;

5) No income caps for SS and Medicare taxes;

6) Means test all SS and Medicare beneficiaries, sliding scale phase out of benefits to 0% at 200% of average retiree annual income;

7) Progressive luxury tax on cars at 150% of average car value;

8) Progressive luxury tax on RV's, boats and planes.

9) Disallow capital gains on copy writed and patented (intellectual or not) materials, tax as straight income;

10) Tax as straight income income received from foreign deposits (yeah, I'm looking at you, Apple!).

Again, these assholes want to increase my taxes and reduce my freedoms and increase my share of the debt for their failed affirmative action president?

Fine.

Let them pay their bill.

Tim said...

Seeing Red said...

"Mitt had a plan like this, cut deductions, don't raise marginal tax rates."

Right.

The chance to manage our way out of this has passed.

Next up?

Sequestration.

edutcher said...

When the limousine Liberals want the Rich taxed to the gills, they always mean somebody else.

When they find out it's affecting them, they move to another, more Conservative state, so they can bitch some more.

Dust Bunny Queen said...

3) Estate tax 100% on any amount over $1 million, including life insurance, annuity and pension beneficiaries;

Goodby to family farms and family owned businesses.

I concur on the health insurance issue. Either tax the employee for the value of premiums paid, generally 15 to 20K a year, as income received or just give them more income and make them buy their own insurance. Either way, people will suddenly decide that maybe that ultra rich cadillac insurance plan isn't needed after all. People will stop over using medical services and the costs will come down for most ordinary procedures.

chuckR said...

MadisonMan a few electin cycles ago, Steve Forbes pushed the idea of of a per person standard deduction and a flat tax above that. Probably easier to sell than a lower flat tax rate with no deductions. Forbes didn't get any traction as a candidate because he was about as un-telegenic as he could possibly be. And an evil capitalist to boot.

General comment - I like just about all proposals made here, like'em a lot. Especially the ones that give the Blue States voters what they deserve, good and hard.

chuckR said...

@Dust Bunny Queen
As a business owner and about as small as can be, I choose my insurance coverage plan every year. I have learned my lesson - from personal experience - that the Cadillac plan is the cheapest, in my state at least. It simply shouldn't be that way. I certainly don't see ACA fixing it either - ACA is probably more like throwing a boat anchor to a drowning man.

Tim said...

"Goodby to family farms and family owned businesses."

Right. No doubt there's lots of unintended consequences in my list. Some of which, of course, could be reduced by writing in exemptions for small businesses and family farms under certain asset values.

But the real point of this little exercise is, the stupid rich who voted for this jerk to limit my freedoms, increase my taxes and share of the debt for my grandchildren, children and me should be made to bill the bill.

Obama said, "vote for revenge."

Ok then. These are the people with the money. Stick them first.

EDH said...

I think the Obama camp has already war-gamed a recession in 2013, and they are already preparing their next blame game.

On tax increases, the GOP should give Obama exactly what he asked for in the campaign. And let Obama determine the size of the cuts in spending needed. Otherwise, with the help of the media the Obama blame game will continue.

Campaign on reform in 2014 and 2016.

MadisonMan said...

As long as we're complaining about things to get rid of, by the way, I say ditch flood insurance at the coast.

Link.

Gays Mills in Wisconsin famously moved because of persistent Kickapoo River flooding. I think another Wisconsin town has also done this. Yet coastal communities continually rebuild so the rich can watch dolphins swim by.

TWM said...

Let it hit the blue states hardest. They are the ones who voted for this mess and they need to feel the pain of it.

Tim said...

"Tim:

Yes, but the whole country suffers as a result."


Right.

But "the whole country suffers as a result" is a dead-bang, 100% certainty already.

The debt is unsustainable.

Current spending is unsustainable.

There is no avoiding that.

So let's start with those who voted for Obama. Republicans could, conceptually, get behind those taxes in exchange for serious, structural reforms to the social welfare entitlement programs.

Instead, we'll get sequestration.

Anyway, as for Republican credibility, it strains credibility to think that the disaffected, limited government voters supported Obama because they were outraged by Republican intransigence on limited government.

I agree, people are stupid, but not that stupid.

And, although I'm pro-life and anti-gay marriage for spiritual reasons, I think you discount the effect those issues have in driving voters away from the Republican Party.

The culture has change, and unless and until it changes back again, those are losing issues for the Republicans.

Sadly.

Tim said...

TWM said...

"Let it hit the blue states hardest. They are the ones who voted for this mess and they need to feel the pain of it."

That's exactly right.

Sen. Reid says no cuts to Social Security and Medicare.

That's not a serious proposal.

So, in lieu of a serious proposal from Democrats to reform SS and Medicare, send Obama and Democrat voters the bill.

They want European-style social welfare programs?

Very good.

Here's the bill.

Pay up.

Unknown said...

Seeing Red said...
I'm in a blue state, elections have consequences.

...for people living in red states.

Blue states get to refuse to accept the consequences of their elections.

Triangle Man said...

Is everybody going Galt yet? When is that happening again? Is Spielberg cashing out for $4B to avoid increases in the capital gains tax the same thing?

mccullough said...

I wonder what the median deduction is in Cal., etc. It has to be skewed by the very wealthy.

I was mildly surprised to see that Maryland had the most itemizers.

Based on this article, looks like capping itemized deductions at 25,000 to 30,000 a year is a good idea to raise needed tax revenue.

Fr Martin Fox said...

Tim:

I never said the GOP's anti-tax folks voted for Obama, or would.

But they can stay home.

Nathan Alexander said...

I think I'm going to go back to school to become a tax lawyer.

It should hit a high point about 3 years from now, no?

Methadras said...

Limiting any deduction is a tax hike. Period. Inflation is a tax. California is now officially a 1 party state. It's veto proofed democrat rule. This state is finished.

Methadras said...
This comment has been removed by the author.
jr565 said...

I have no problem with CA paying more in taxes. Hit Hollywood where it hurts.

Colonel Angus said...

I agree that the GOP should give whatever tax increase Obama wants. That additional $100 billion in revenue from the 1% will do wonders in lowering our trillion dollar plus deficit.

David said...

This is why the deduction limitation idea will not fly. Think Illinois, New York, New Jersey, Connecticut, Massachusetts, Washington, Wisconsin, Minnesota in addition to California. All high property tax states.

Also mostly high income tax states. Deductibility of state income taxes presents the same problem. (It also presents an opportunity. They could actually eliminate some of the already existing limitations on income tax deductibility for high income persons--most crucially the AMT.)

The whole thing will be gamed big time. The system is complex enough that it can hide all sorts of gifts to the evil rich from the blue states.

Expect new highs in bullshit and hypocrisy.

David said...

Do not count on the California rich paying more.

The democrats have no interest in jeopardizing their lock on that state.

jr565 said...

FR Martin Fox wrote:
Yes, but the whole country suffers as a result.

Also, the stupid GOP doesn't help it's cause when it destroys whatever credibility it has left. The GOP used to be the party of smaller government and less spending, as well as lower taxes. The stupid Republicans have lost credibility on the first two, if they vote for this, they lose the third.

Sometimes the lessons that impart the most wisdom are the ones that hurt the most. Maybe its a good thing that CA is totally in the hands of the democrats. We get to see the effects of these policies first hand, with noone able to blame anyone but democrats.

Remember when Moses brought down the Ten Commandments, and the populace would rather worship the golden calf? Sometimes the best lesson is to let people get what they want.

Tim said...

"But they can stay home."

Yes, of course. Some quite obviously did, or voted for the Libertarian.

But, in reading up on the numbers, probably not enough to off-set the votes Obama and the Democrats got.

And, if one stayed out of the election because the Republican wasn't good enough, by my lights one deserves what one is going to get.

Making the perfect the enemy of the good, don't you know?

I can't say I feel sorry for anyone that shortsighted.

Tim said...

Colonel Angus said...

"I agree that the GOP should give whatever tax increase Obama wants. That additional $100 billion in revenue from the 1% will do wonders in lowering our trillion dollar plus deficit."

They won't.

We'll see sequestration instead.

There will be lessons from that, but the stupid, being stupid, will fail to learn them.

The smart, being outnumbered by the stupid, won't be able to do enough to stop it.

CWJ said...

Not perverse at all, AA. The democrats are not fixated on raising taxes. They are fixated on raising tax rates.

That's all they (and our liberal trolls) ever seem to want to talk about. Rates yes, actual taxes raised, no.

Talking about rates absent a knowledge of their interaction with exemptions and deductions is a close to meaningless exercise. On the other hand, it does have its demogogic uses. And high marginal rates do create the political opportunity to grant or withhold the above mentioned exemptions and deductions to friends and foes respectively.

That's why the flat tax in its simplest forms is so attractive to the common citizen, while at the same time will never stand a chance of being put into effect.

rehajm said...

Mitt had a plan like this, cut deductions, don't raise marginal tax rates.

Romney's plan was to LOWER marginal rates and eliminate certain deductions. Lowering the marginal rate is key because it encourages people to work and earn more. When you earn an extra dollar at the lower marginal rate, you get to keep more of it. Lowering the rate would promote economic growth, which in turn raises government revenue and improves the well being of citizens. Unfortunately, now it won't happen...

That said, there's no question the burden of eliminating the mortgage or state tax deductions will not fall equally. It's no coincidence payers in high cost blue states get hit harder. For many of us, that's a feature, not a bug. You get the government you deserve, I suppose. Given the explanation above it also explains Obama's obsession with raising marginal rates, and not with strategies to improve economic growth...

jr565 said...

FR Martin Fox wrote:
Also, the stupid GOP doesn't help it's cause when it destroys whatever credibility it has left. The GOP used to be the party of smaller government and less spending, as well as lower taxes. The stupid Republicans have lost credibility on the first two, if they vote for this, they lose the third.

LIbertarians who supposedly want limited govt voted libertarian despite knowing that if Romney doesn't win that they'll get bigger govt and Obamanomics. So if they're not voting for their interests F them.
ANd as Bill Kristol said, maybe it is time to raise taxes. Why defend these big companies half of whom voted for Obama anyway?
Hollywood could use some taxes. They get to live in fantasy world living like Litle Lord Fauntelroy's but keep talking about the fat cats who aren't paying their fair share. And demagoging businesses while speaking the populist cal. (like with Rosanne Barre saying “I first would allow the guilty bankers to pay, you know, the ability to pay back anything over $100 million [of] personal wealth because I believe in a maximum wage of $100 million. And if they are unable to live on that amount of that amount then they should, you know, go to the reeducation camps and if that doesn’t help, then being beheaded,” I wonder where she got that 100 million. My guess is its' because she doesn't quite make 100 million and wants to keep her shit. It's those that are richer than HER that are the villains. Last I heard 100 million salary still puts you in at the 1% range.
Why not find what Rosanne earned last year and say 5 million lesss than that is the maximum salary that we believe peopel should earn and demand she pay that back or we chop off her head?

I'm really starting to see Instapundit's points about taxing Hollywood.

jr565 said...

rehajm wrote:

That said, there's no question the burden of eliminating the mortgage or state tax deductions will not fall equally. It's no coincidence payers in high cost blue states get hit harder. For many of us, that's a feature, not a bug.

If I didn't live in one of those blue states, Id be all for it.

Fr Martin Fox said...

FWIW, I think if Romney had been elected, we'd still see higher taxes. Yes, I know that's not what he said. It doesn't matter. He'd face the exact same pressures, so would the GOP.

And really, how can Romney changing positions sound so surprising?

Alex said...

Blue states subsidize low productivity red states

30yearProf said...

Atually, the disparity makes it MORE FAIR. The states hit so hard are the very states that gave us 4 more of a math-challenged Omama administration.

On the road to socialism.

Chip S. said...

Maybe if the media had reported on stuff other than the poll-of-the-day during the campaign, obvious shit like this wouldn't come as a total shock to people.

But as far as this being "unfair"...how so? Why favor some types of household expenses over others?

The only practical reason for not eliminating all deductions is that it would send the housing market back into the tank.

Paul said...

I say skip taxing California.

Just force them to secede from the nation. VOTE THEM OUT. 1/3 of all welfare recipients are there yet only 1/8th of the population.

Yea like the show Survivor, just vote them off the island.

Bender said...

Just impose a 90 percent tax rate on all income over $100,000. Imagine how much money the government would rake in. After all, the rich don't need all that extra money.

EMD said...

Is Spielberg cashing out for $4B to avoid increases in the capital gains tax the same thing?

That was George Lucas, dude ... do you even read the news?

Methadras said...

David said...

This is why the deduction limitation idea will not fly. Think Illinois, New York, New Jersey, Connecticut, Massachusetts, Washington, Wisconsin, Minnesota in addition to California. All high property tax states.


The only counter to this will be for right thinking citizens of each of those respective states, is to begin a state initiative/referendum process to limit property tax collection on a single sales use basis. Do away with yearly property taxes and see what happens. It's the only way to keep these evil government spenders in check.

Buy a house or a piece of property, then pay tax on it one time like any other piece of property. Treat it like a TV, a candy bar, a car, whatever. Pay a one time tax. That should happen.

McTriumph said...

Just let the evil Bush tax cuts expire. Presidents Obama and Clinton made the argument during the election that the Bush econ policy and tax cuts caused all our problems, let them expire, Obama won. It will turbocharge the economy, let the Democrats put their money where their mouths are,fuck they've been whining about them for twelve years. FORWARD!

Revenant said...

I'll vote against anyone who causes my taxes to go up. I don't care what their party is, what their rationale is, or how "fair" it supposedly is.

Sam L. said...

Yeah, but Dems will be given a pass.

MayBee said...

Judging from Obama's past positions, I'd say he favors both limiting deductions AND raising tax rates.

He started pushing for limiting deductions from early in his presidency (remember the argument that charities would get fewer contributions?). I know he argued it was "unfair" for someone making more money to be able to take the deduction at a higher rate (because they are paying a higher rate). This was how he was going to pay for his health-care slush fund.

Anyway, he hasn't talked about this in a while, just as he hasn't talked about fundamentally rebuilding America or taking the pill rather than getting the heart transplant.
But I think that's the way he still sees the country.

So I look for him to push for increased rates now, then push for decreased deductions later.

ambienisevil said...
This comment has been removed by the author.
Rusty said...

Rather than punishing people who are millionaires, why not implement a tax system that allows for the creation of more millionaires.

Iknow. Crazy talk.

carrie said...

The real target with limiting deductions is, IMO, charitable deductions. Kill the churches by killing their funding. Once the charitable deduction is gone, all charity will come from government . When all charity comes from government, then . . .

carrie said...

The real target with limiting deductions is, IMO, charitable deductions. Kill the churches by killing their funding. Once the charitable deduction is gone, all charity will come from government . When all charity comes from government, then . . .

Bender said...

Eliminating a mortgage deduction would probably end up bringing in less revenue, not more.

Right now, people bought their homes with the expectation of the mortgage deduction built into the purchase price. Without the deduction, sellers will not be able to justify higher prices. Home values will plummet. With lower values come lower property taxes. With lower values come more mortgages underwater, consequently with more foreclosures.

And those who cannot deduct mortgage interest now will not have the money to spend that deduction on other things which provide jobs for other people.

Alex said...

carrie - if people really care about charity they will still give.

Chip S. said...

And those who cannot deduct mortgage interest now will not have the money to spend that deduction on other things which provide jobs for other people.

I never had you pegged as such an old-school Keynesian.

carrie said...

Alex--they will give if they can afford it. Churches are full of mid and low income people who give what they can. If taxes are raised, these people will have less money to give to the church or charity. I think that there is a big difference between faith based charity and government charity and I think that liberals want to get rid of faith based charity becasue of that difference.

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