Why is no one discussing The Plan to Steal Your 401(k)

[OldBay]

removing mortgage deduction is a good idea. why should the gov be subsidizing your purchase of a house, isnt that how it goes gopers?

I remember when other forms of consumer interest were tax deductible - like car loans and credit card interest. That deduction was lost about the 1970's, not sure of the exact date. People continued to borrow money to buy cars and get themselves in credit card debt without the deductions.

[CajunRaven]

Considering the tax code is 70,000 pages, charitable and mortgage interest deductions should be one of the last places they look, especially since they are some of the few loopholes in the tax code available to the middle class.

I really have no problem if the deductions are removed as long as tax rates adjust accordingly. But, start by going through the code and going after the K street loopholes that benefit the few or the large corporations.

[CajunRaven]

I remember when other forms of consumer interest were tax deductible - like car loans and credit card interest. That deduction was lost about the 1970's, not sure of the exact date. People continued to borrow money to buy cars and get themselves in credit card debt without the deductions.

They were eliminated in the 80's as part of the deal Reagan and O'Neill struck to reform the code. Of course, there was also a promise that down the road government spending cuts would happen to help offset deficits.

[flyboy56]

I remember when other forms of consumer interest were tax deductible - like car loans and credit card interest. That deduction was lost about the 1970's, not sure of the exact date. People continued to borrow money to buy cars and get themselves in credit card debt without the deductions.

You can still use this deduction but first you must meet a minimum interest paid which can only be achieved by owning a house, and usually in the first years of mortgage payments when you are paying 98% interest and 2% principle. In the late 70's early 80's the magic number was $3,400. After that you could start to itemize other things such as a new car payment's interest amount per year, and other sources of interest paid. And of course medical expenses can be included once you qualify to itemize. But these so called tax deduction loop holes are used by the middle class. I predict these will go away before middle class tax rates go up, which even that will happen eventually.

[demopublican]

removing mortgage deduction is a good idea. why should the gov be subsidizing your purchase of a house, isnt that how it goes gopers?

Why don't you capitalize? Is there a tax on capital letters?

[OldBay]

http://finance.yahoo.com/news/protec...150557586.html

"Congress could cut budget deficits by trimming any number of "tax expenditures" - foregone revenue on tax deductions for items such as home mortgages and 401(k) contributions.

The Simpson-Bowles deficit commission report recommended capping the pre-tax amount that employees and employers can contribute to 401(k)s at the lower of two options: $20,000, or 20 percent of income."

The Simpson-Bowles recommendation would punish middle class savers the most. The max today is 22,500, so high earners would be limited to a 20K 401K contribution and "lose" only 2,500 from the current 401K limit. Someone earning 50K, however, would be limited to a total 401K contribution of 10K annually (20% of income), a huge drop in the max 401K allowed today.