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WASHINGTON -- President Barack Obama isn’t wilting from the pushback Nevada’s lawmakers and others have lodged over his budget proposal to lower the tax deduction the wealthy take on mortgage interest and charitable contributions.
In his prime-time news conference Tuesday night, Obama was asked if he regretted the proposal. As the Sun reported on Monday, this is one tax issue that has bonded most of Nevada’s Democrats and Republicans in Washington.
But the president seemed undeterred. Reducing the tax deduction rate for those families earning more than $250,000 would bring in more than $300 billion – a down payment on health care reform. The rate would be lowered from about 38 percent to 26 percent.
“It's the right thing to do, where we've got to make some difficult choices,” Obama said.
Obama explained that for charitable giving, "it just means, if you give $100 and you're in this tax bracket, at a certain point, instead of being able write off 36 or 39 percent, you're writing off 28 percent.”
Obama dismissed critics who say it would curtail generosity to charities. Roll Call reported this morning that Republicans in Congress are using the proposal to “gin up opposition” among charities.
“Now, if it's really a charitable contribution, I'm assuming that that shouldn't be a determining factor as to whether you're given that $100 to the homeless shelter down the street.”
The reduction would be similar for mortgage interest, but the president avoided that thorny subject. Even wealthy homeowners, as Democratic Rep. Shelley Berkley told the Sun, count on that that deduction.
Realtors oppose the change, worrying it would stretch family budgets and harm the economic recovery. A national realtors group ran a full-page ad in a Hill newspaper today opposing the move.
Some congressional watchers believe the proposal is essentially off the table.
But the president pressed on.
“Ultimately,” Obama said, “if we're going to tackle the serious problems that we've got, then in some cases those who are more fortunate are going to have to pay a little bit more.”
What about those of us who rent? Rent rates are bound to go up if the mortage deduction goes down, so it will be us, who can least afford it, who will be paying the difference (as usual).
Insert your favorite curseword here.
Considering that renters don't pay any property tax to live in Clark County, I wouldn't complain too much about this. Please don't give me the excuse that owners pass on their costs to tenants, because that simply is not true. Most rents barely cover the mortgage interest, let alone taxes and maintenance costs. Most rental owners in southern Nevada are currently underwater on their mortgages and in negative cash flow on their rental units. Owners cannot simply raise rents when their costs increase because if they do, the tenant will just move elsewhere. In my opinion, renters have had it easy and shouldn't complain about their tax burden.
Please, don't tell me that landlords don't pass on their costs to the tenants. They are in it to make a profit, else why bother? They pass on everything. I'm not faulting the landlords for making money, I'm complaining that anything that increases their costs will just be passed along.
I'm telling you that landlords would love to pass their costs onto their tenants, and in normal economies they would. However, in southern Nevada in 2009, there are so many landlords that are only renting their house out of necessity, because they live somewhere else and cannot sell their home in Nevada. As a result of these unintended landlords, the supply of single family residences far exceeds their demand. In such an economic climate, rents are determined by market forces and not by how much it costs to maintain the rental unit. Any landlord that tried to raise rents in this environment would insure that his unit remains vacant.
Meanwhile the Deuce was turning away people last weekend due to all of the poverty stricken folks on the Strip.