Housing is another problem area

Housing is another problem area - Housing equity: Housing...

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Housing equity: Housing is another problem area—home ownership faces extraordinarily hostile challenges under the rules of national sales tax. The current federal income tax code provides a number of favorable treatments for people who own their homes. Deductions of mortgage interest and property tax are certainly one of the most important advantages home owners receive under current income tax scheme. A property tax is a tax that an owner pays for owning his property. A mortgage is a loan in which the borrower puts up to real estate as security for a loan; if the borrower doesn't pay back the debt on time, the lender can have real estate sold to pay off the loan. When buying a house, most people obtain a mortgage that is associated with certain interest rate depending on the amortization period of the mortgage. And As long as your mortgage balance is smaller than the price of the home, mortgage interest is fully deductible on the tax return. Not only does our current income tax system allow deductions on mortgages interest and property taxes, but it also ignores the imputed rent generated on home ownership (Anderson, pg 41). With the income tax system the way it is structured, landlords must count the rent they received as income; and renters may not deduct the rent they paid. However, homeowners are treated the same as renter and are ignored their simultaneous roles as the landlords for their own (that’s, they will not be taxed
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This note was uploaded on 04/17/2008 for the course HIST 101 taught by Professor Hinch during the Spring '08 term at Clarke University.

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Housing is another problem area - Housing equity: Housing...

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