Keeping a jaundiced eye on the corporate media.
Krugman nails it.
Not being a suicidal type, he refuses to specifically grab the third rail of the issue - the mortgage interest deduction, which was designed to prime the pump for the construction industry after WWII. We not only don’t need to do that, this deduction actually artificially inflates the cost of housing stock at a time when we need to bring it in line with earnings.
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I have both owned and rented. To be honest, I prefer to own, simply because, as a renter, I have zero rights. If we were renting the house we live in now, I wouldn’t have my little forest garden. I wouldn’t have the right to decide how it looks. If there was an issue with the heating or plumbing, I would have little or no control over how well, or possibly whether, it was fixed.
Some people do see a house as an investment. It’s where they store their stuff. For me, a house is a home. And if someone can come along and tell me to get out, to leave my home because the want to do something else with it, well, it wouldn’t be a home.
Some people can tolerate being rootless. They can move around, follow the good jobs, the nice weather, whatever. I’m not one of them. I know we don’t really *own* our little plot of land, but I feel we are its stewards. It’s roots. And I can’t live without them.
I’m looking at buying because I can get a whole heck of a lot more space for less buying over renting. And I hate moving. And white walls. And no garden. Or any other personal outdoor space. I’m moving into an area that has already been economically depressed for years, so I doubt the value of the property will go down. And it’s on transit.
If I wasn’t who I am, I would probably be very happy to rent. (Okay, I think that’s the dumbest thing I’ve said here so far.)
Get rid of the home mortgage interest write-off? That’s the only tax break left to the middle-class. That and the more recent $250,000 credit per individual owner upon sale of a first residence. Go ahead and give renters a write-off before you take away the mortgage interest write off.
Krugman goes on to make this odd statement:
“….investors who want to provide rental housing are on their own.
Hardly. RE investors are gifted a vast array of tax shelters for income properties, far exceeding the mortgage interest write-off. They get to deduct all their investment expenses (utilities, repair, insurance) against their rental income including mortgage interest; they get to depreciate the value of their real estate against their taxes; and best of all they are taxed at the lower capital gains tax rate upon sale - but they don’t even have to pay taxes - they can exchange their income properties for like investment properties in a three way exchange, pushing their tax liability into the future.
The IRS codes are designed to promote investment of all types, non investing home owners be damned.
Hey?! Now we’re screwing with the only tax credit left to me. Hands off ok.