The FairTax encourages home ownership and homebuilding by placing all Americans and all businesses on equal footing – no loopholes, no exceptions. The home building market would greatly benefit from enactment of the FairTax. There are two points of concern here: (1) The elimination of the home mortgage interest deduction and (2) the different treatment between new and used housing. Today I am covering the home mortgage interest deduction.
There is a lot of opposition to the removal of the mortgage interest deduction, but if you stop and think about it, ALL deductions need to be eliminated if the FairTax is going to be fair to all. And since you aren’t going to be paying any income tax, why should you receive any deductions? You don’t need deductions any more – get it? The only reason for the mortgage interest deduction is so you don’t have to pay as much in income taxes.
Well now, with the FairTax, you and you alone can regulate how much you pay in taxes. You will receive 100% of your income and will be making house payments with your entire paycheck, not just a portion of what is left after the government takes what they want. Right now, only about 35% of the taxpayers itemize their deductions and take advantage of the mortgage interest deduction.
One other thing I need to mention: With the FairTax, mortgage interest rates will fall by approximately 25%, which will allow you to buy more house or pay off your existing housing loan sooner.
More tomorrow……………..
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