GAO: tax breaks such as home mortgage interest deductions need examining

[BigBearJohn]

OK, NOW I'm scared

WASHINGTON (Reuters) - Tax breaks such as deductions for home mortgage interest and state and local taxes cost the federal government $728 billion last year and need to be reexamined, the Government Accountability Office said in a new report on Friday.

Comptroller General David Walker, who heads the agency, said the government must look at ways to rein in the growth of so-called tax expenditures if it is to avoid huge fiscal deficit problems in future years.

"We're on an imprudent, unsustainable fiscal path," Walker told a news conference. "The status quo is not an option and we're not going to grow our way out of this problem and the sooner we get started the better."

"The time has come to reexamine the base of all major federal spending and tax programs, policies functions and activities. We were already deeply in the hole before Katrina hit and now Rita is off the coast," he said.

http://news.yahoo.com/s/nm/20050923/pl_nm/economy_taxes_dc&printer=1;_ylt=Ak_2U8Rff0q1drPlfimtjU8b.3QA;_ylu=X3oDMTA3MXN1bHE0BHNlYwN0bWE-
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[NMDemDist2]

1. these assholes think it's OK for inherited, unearned wealth to be

tax free and my one and ONLY freaking deduction needs to be "reexamined"


:banghead:

[SammyWinstonJack]

4. Assholes is right! argh!!

[Vincardog]

2. Do you think may be someone should look into CORPORATE taxes?

How many TRILLION a year do you think the Corporate Parasites get away without paying?

[Booster]

18. Why doesn't one of our leaders suggest that any corporation

claiming their headquarters are out of the country so they don't have to pay taxes SHOULD GET NO GOVERNMENT CONTRACTS IN THE BILLIONS, like say Halliburton. Remember when Bush Sr did away with your car loan and credit card exemptions on your taxes? I really do hate these bastards.

[SammyWinstonJack]

3. Just keep sticking it to the little guy. Figures. How about rescinding

the obscene tax cuts to the Greedy 1% and make Corps pay up? Naw, taxes are only for the little people, and tax breaks are only for the richy rich. :argh:

[girl gone mad]

5. No surprise.

Now that real estate is hitting its peak and the new bankruptcy laws are about to take effect, they figure it's a good time to pull the rug out from under all of those the new Mcmansion owners.

[n2doc]

6. Playing with fire

This is quite possibly the most popular tax deduction out there, particularly with the mini mansion, SUV *-supporting set. No friggin' way this gets touched.

[kysrsoze]

22. The second they do this, the economy will tank

There would be a massive sell-off. If my tax break is gone, I'll sell and rent. Fuck them.

[annabanana]

7. on the 2nd home, maybe...

and the 3rd, 4th and 5th too.

[lapislzi]

8. As a single parent

I would lose my home if it were not for those deductions. My tax refund goes to pay my spiralling property taxes. I count on that $5k refund to see me through the tax year.

Yeah, stick it to the middle and working classes AGAIN, George. Pass the K-Y. Ah, shit. Tube's empty.

[Straight Shooter]

9. Maybe they'll put a ceiling on the deduction.

Or maybe they'll make it a percentage of the cost of the home. IOW, those who can afford an ego mansion will deduct more because the cost of interest (in total dollars expenditure) will be higher. Schmucks like me, who get what we can afford and still have a tight budget, will see our deduction dwindle.

I don't see how they can eliminate it or drastically reduce it. The housing industry would go into overdrive uproar.

[FloridaPat]

10. Reagan tried to get rid of this one. The banks, insurance companies,

and the average American screamed bloody murder. And now these guys think it's an unsustainable fiscal path? Where have they been for 5 years? Where were they when the taxes for the rich were cut?

You folks realize that the only way we may get real representatives for the average person is for us here to run for office?

[ClintonTyree]

11. That's exactly what Reagan did.........

he wouldn't come out and say he was raising taxes, so he took away many middle class exemptions (credit card interest used to be deductible etc.) in affect, RAISING TAXES! This is a tried and true tactic of the Relugs and it looks like they're going to the well once again! :grr:

[bleedingheart]

12. In a way, I hope they do it...

clearly none of the other travesties in this country get any attention because people aren't affected or don't care...so why not...just take that away and watch as over extended republicans and DINOS find themselves unable to afford the big house they bought...even at a low interest rate.

Many people count on those deductions....it will be a nightmare but clearly people are so freaking stupid I think they need a reality check.

[bleedingheart]

13. Here is a REALLY important thread...and yet it sinks...

which only makes me wonder...

Getting rid of the Estate Tax and reducing tax burdens on the wealthy...while screwing the middle class...

The removal of the tax deductions for mortgage interest will pay for the war and another few wars....and the middle class will be crippled

[jmowreader]

14. Dear GAO: There is a better deduction to get rid of

It's called "tax loss carryforward."

A business can only deduct a certain amount of loss from their taxes every year. Any excess loss can be "carried forward" to the next tax year.

Worse: this shit is considered an asset. Whole LBOs have been consummated just because the target company has a huge tax loss carryforward--when you buy the company that's bleeding red ink, you get to use it as if you ran it up.

Get rid of tax loss carryforward and it will bring in a lot of tax revenue. Loss should be deductible only in the year it's accrued.

Another quick way to catch the attention of the business community is to apply the "subsidized hobby" situation to corporations. If you were a knitter in your leisure hours and you sold sweaters so as to afford really nice yarn, you've got a subsidized hobby. Subsidized hobbies can't deduct loss. If you are a small-enough business, and you report loss more than two years out of every five, the IRS can declare your operation a subsidized hobby and send you a bill for the loss deductions. If you are a corporation and you report loss more than two years out of every five after a certain number of years after founding, the IRS should be able to declare your operation to not be an actual business and send you a bill for your loss declarations. ("Actual Business" = an entity that is formed for the purpose of making a profit that actually makes a profit.) I understand that most businesses are going to run in the red for a few years after they're founded. I also understand that if you're throwing off loss for fifteen years and you're running a hot dog cart, you probably don't know what the hell you're doing and you need to either get your shit together or put your hot dog cart up on eBay.

[AlCzervik]

15. oh just in time for the interest only loan people!

I read in Business-week that 30% of all new mortgages last year were interest only. So much for the "Ownership society" bush likes so much.

[bleedingheart]

16. I think you mean the interest only loans...with 0 principal being paid

one of my husband's republican friends got one of those doozies for a $450k house...

he will shit his own head if the mortgage interest deduction goes away...

[AlCzervik]

17. yes, i fixed it.

That will kill people, i mena especial;ly those people that got interest only loans becasue that was the only way they could afford the mortgage. Now thats not to say they should be off the hook for doing so but still 30% of all new mortgages is a lot of people.

[BigBearJohn]

21. .

[SillyGoose]

19. I cannot effing believe what I am reading...

This is beyond the pale. They want to examine the losses from the home mortgage deduction but no mention of the estate tax bill and tax breaks for the wealthy??? I don't know how much more of this I can take. My blood pressure is through the roof reading this sh---.

:argh:

[buzzard]

20. That is something I would love to see here we don't allow deductions

for mortgage interest at all.