US Giving Way More Housing Aid to Rich

[aztek]

The Center for Budget Policy Priorities released a number of charts today that shows how much the federal government favors high-income households over low-income ones in housing benefits.

This largely results from the fact that homeowners receive significantly more aid than renters and high-income Americans are much more likely to be homeowners.

In 2012, the federal government gave out $240 billion in housing aid. Income data is not available for all of it, but of what is available, more than half went to those with incomes greater than $100,000 ($81.6 billion). Only $40 billion went to those with incomes less than $50,000.

Overall, high income households receive four times as much in housing aid as low-income ones.

The main reason for this is the majority of federal housing aid flows to homeowners, not renters. The mortgage interest deduction is the most well-known program that subsidizes homeownership. That deduction alone is larger than all federal rental aid combined.

http://finance.yahoo.com/news/government-quietly-giving-way-more-212800893.html

is that a good thing, or bad?

[questionmark]

Depends how you want to see it, Housing Aid was created to enable more to have their own house, so it kind of makes sense that it goes to those who actually buy one.

On the other hand, everlasting subsidies (like Housing Aid) just create a market distortion. They might have been useful for a time but right after the usefulness expires they should be revoked.

The only problem is to find a politician with enough guts to take away the sweets from the voter.

[libstaK]

If it's open to exploitation, it is a bad thing.

However, if it means that less homes are foreclosed it also means more families are not left homeless through temporary financial difficulties. Long term, loss of a home eventually leads to loss of independence in later years and a higher risk of long term dependency on government handouts so the fact there are plans to avoid this trap makes sense - again only as far as they are not exploited.

[Bavarian Raven]

Misleading title.

[Gromdor]

Getting rid of the home mortgage deduction is basically viewed as a tax increase on the middle class. Neither party would do that, normally. But with stuff like the sequester going on, people might be willing to do it, if they could be swayed with enough rhetoric. It was on the chopping block before after all.

[Ashotep]

Maybe instead of doing away with the deduction it should be limited to houses that are valued at less than maybe $300,000.

[SHaYap]

Paris Hilton spends more than 300K on her puppies ... all and everyone of 'em each on its own ...

[lightly]

I just want a mortgage to not be called home "ownership"

[questionmark]

I just want a mortgage to not be called home "ownership"

well, of having a mortgage makes you not-the-owner somebody else would have to pay the property taxes.

[lightly]

well, of having a mortgage makes you not-the-owner somebody else would have to pay the property taxes.

LOL in most cases the bank"owns" more of the house than the owner ( of the mortgage) let the bank pay THAT percentage of the property taxes . ( kiddin )

[Frank Merton]

Subsidies tend to help the wealthy the most as they tend to have or use more of whatever it is you are subsidizing.

I think property tates on (sorry but the twenty-fifth letter of my keyboard is stuck) homes is a bad idea; it punishes home ownership, the greatest single source of prosperity and saving for most people, and further punishes them when they improve their homes. The only time it should be assessed is when the home is bought as an investment and left to sit empty as a housing speculation.

[Gromdor]

Personally I think home ownership is a myth here in the states. If you have to pay property tax on it every year (else they seize your home), are you not in fact just renting it?

[+and-then]

Personally I think home ownership is a myth here in the states. If you have to pay property tax on it every year (else they seize your home), are you not in fact just renting it?

ABSOLUTELY correct! The right of ownership died the same day property taxes became legal. It's disgraceful.

[Harte]

Do away with property taxes and they'll just find another way to tax in order to get the required funds for the necessary services that people crying about taxes are happy to avail themselves of.

Harte

[Frank Merton]

Do away with property taxes and they'll just find another way to tax in order to get the required funds for the necessary services that people crying about taxes are happy to avail themselves of.

Harte

Of course they will ta you another way; maybe that other way won't be as harmful.

[Sunny Day]

What's property tax?

We probably pay one here in Australia but under a different name I'm guessing. Also can you deduct mortgage interest payments at tax time in the US? (That would be good!) A bit like negative gearing here, but for your own home, not just investments?

Swings and roundabouts hey?

[libstaK]

What's property tax?

We probably pay one here in Australia but under a different name I'm guessing. Also can you deduct mortgage interest payments at tax time in the US? (That would be good!) A bit like negative gearing here, but for your own home, not just investments?

Swings and roundabouts hey?

It would be the equivalent to our property rates.

[Rafterman]

Maybe instead of doing away with the deduction it should be limited to houses that are valued at less than maybe $300,000.

You do realize that's pretty much a starter home in some parts of the country, right?

[questionmark]

What's property tax?

We probably pay one here in Australia but under a different name I'm guessing. Also can you deduct mortgage interest payments at tax time in the US? (That would be good!) A bit like negative gearing here, but for your own home, not just investments?

Swings and roundabouts hey?

you do,it is just called by its factual name:real estate tax.

[Gromdor]

You are kind of making the point right there. A house in small town rural Iowa costs $20-30k, in mid town Iowa maybe $150k, in West Des Moines $250k, and in Seattle $650k. It is pretty much the same house, but because the market in your area says it is worth more, you should get a higher tax deduction?

[+DieChecker]

The Center for Budget Policy Priorities released a number of charts today that shows how much the federal government favors high-income households over low-income ones in housing benefits.

This largely results from the fact that homeowners receive significantly more aid than renters and high-income Americans are much more likely to be homeowners.

In 2012, the federal government gave out $240 billion in housing aid. Income data is not available for all of it, but of what is available, more than half went to those with incomes greater than $100,000 ($81.6 billion). Only $40 billion went to those with incomes less than $50,000.

Overall, high income households receive four times as much in housing aid as low-income ones.

The main reason for this is the majority of federal housing aid flows to homeowners, not renters. The mortgage interest deduction is the most well-known program that subsidizes homeownership. That deduction alone is larger than all federal rental aid combined.

http://finance.yahoo...-212800893.html

is that a good thing, or bad?

Wow. I had not heard that $100,000 a year was Rich. And.... $50,000 a year is Poor?

This article seems to be fast and loose with the "Rich" and "Poor", probably to create friction purposefully between the "Rich" and the "Poor".

I agree that homeowners with more expensive houses get a better deal, but obviously the Poor who don't own a house/mortgage are going to get less. If a homeowner gets $3000 a year to compensate for interest, and paid $1000 a month on that house, then should the FedGov just hand out $3000 to someone who is co-renting with a friend for $250 a month?

$3000 is 25% of $12,000. And $3000 is 100% of $3000. So should the one person get 25% of their housing paid and the other poorer person get 100% paid? Is that then fair?

It is unbalanced because each case is an individual case, and governed by hundreds of laws. This article is just more enflaming Rhetoric.

[Gromdor]

My boss's grandfather took out a mortgage and second mortgage on his property and invested the money. This was back quite a few years. He lived and died a millionaire. Personally I thought he was insane taking that level of risk but his investment yields were far greater than his mortgage interest rates and he also stated that the mortgage tax deduction helped quite a bit too. And when he paid it off, he went and did it again.

[Harte]

Of course they will ta you another way; maybe that other way won't be as harmful.

I am curious to hear in what way property taxes are more harmful than other taxes.

Harte

[Frank Merton]

I already told you. Go back and read what was already posted.

[Rafterman]

You are kind of making the point right there. A house in small town rural Iowa costs $20-30k, in mid town Iowa maybe $150k, in West Des Moines $250k, and in Seattle $650k. It is pretty much the same house, but because the market in your area says it is worth more, you should get a higher tax deduction?

But it's not the same house. Should the Federal Government set standardized prices for homes across the nation now?