The Morning Report
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Robert E. Lee wrote:
So far, you’ve only stated facts, as you see them. Now, let’s hear your solutions. Should the tax deduction for mortgage interest and taxes be eliminated? Reduced? If reduced, by how much? As for the waitress, are you endorsing income redistribution, where the government (i.e., the taxpayers) pays her way through life, at least as far as housing? Let the real debate begin, Mr. Scott. Specifics, please!
If the government is helping pay my and every other homeowner’s way through life with a tax deduction, I don’t see why it shouldn’t be the same for the waitress. My tax deduction helped my daughter through school. It allows me to spend $100 on dinner once or twice a month. In the meantime, that waitress is struggling to feed her kids something other than mac & cheese because the housing costs are so high. She is having to pay for childcare in the evening. The kids aren’t getting much help with their homework so they are less likely to have a life any better than their mother.
According to the Center Budget on Budget and Policy Priorities, “Each year, the federal government spends more than three times as much on tax breaks for homeowners — with a large share of the resulting tax benefits going to upper-income households — as it spends on low-income housing assistance.” What’s wrong with this picture?
Here is the real problem as quoted from the same report: “One fifth of all American households are renters with low incomes, and a large share of these families have acute housing affordability problems. Recent Census data indicate that 8.8 million low-income renter households pay more than half of their income for housing, a burden that far exceeds federal standards of affordability. Over 70 percent of these families have ‘extremely low incomes’ (i.e., below 30 percent of the state median income).”
Now the common response to this is that “if they just worked harder and moved up the ladder they wouldn’t be in that situation.”
The problem with that analysis is the jobs to move up to are not there. There are not 8.8 million more jobs that pay $22 an hour to move up to. So we either help pay their housing costs or we set a minimum wage that enables them to pay their housing costs. My vote is to phase out the homeowner deduction for high income earners and transfer that to HUD’s housing programs.
See the report quoted above here.