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Principal mortgage payments should be tax deductible

JeepFreak21

NAXJA Forum User
Location
Cameron Park, CA
I was just thinking... since my 401k is constantly loosing money, it would be nice to be able to contribute less money to that every month and work on getting our house back into the black by making additional principal payments. The problem with that is that I'm already getting taxed to hell and I need the deduction!

Does it not make sense to cut the guys a break that aren't just standing with their hands out, but actually working their asses off to try to make up for their bad investment decisions? Maybe even just additional principal payments. :dunno:

Are there enough people that would take advantage of it to make a difference? Would it take money away from the economy because people would have less disposable income? Would it hurt the stocks and bonds markets too bad?

Banks, lending institutions, and private investors would be all for it... hard working, responsible individuals like myself would be for it... conservatives would be all for it... but what would be the liberal's take?

And finally... if it turns out to be a good idea, anybody know who I pitch it to?

Billy
 
The longer a loans duration, the more money the bank makes off your interest. If you pay extra principle, especially at the beginning of your loan to bring down the principle, you will pay less in interest over the long term of the loan, and save money. The value of your house, and thuse your equity will go up as the housing market goes up. The difference between what you actually bought your house for, and what you could sell it for in the future is your profit. Maximize your profit if you can.

At this point, feeding a 401K increases the number of shares you own in the fund. When the price per share goes up, so will your balance. I think that the only people seriously freaking about 401K values right now are those who either have stagnant money in the account, or those who plan on retiring soon.

-Ron
 
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The longer a loans duration, the more money the bank makes off your interest. If you pay extra principle, especially at the beginning of your loan to bring down the principle, you will pay less in interest over the long term of the loan, and save money. The value of your house, and thuse your equity will go up as the housing market goes up. The difference between what you actually bought your house for, and what you could sell it for in the future is your profit. Maximize your profit if you can.

At this point, feeding a 401K increases the number of shares you own in the fund. When the price per share goes up, so will your balance. I think that the only people seriously freaking about 401K values right now are those who either have stagnant money in the account, or those who plan on retiring soon.

-Ron

Thats about it, my various 401's lost value but I still have the shares, once it turns around and the values go back up I'll be much happier. I'm not planning on retiring for a few years anyway. Now the one that did tick me off was my non retirement investment, that was my money for a new Harley, well, 50% of one anyway, now it's less than 20%. My new job and the start of the slide about coincided, now I just have to hang on till it turns around again. I'll just have to be satisfied with my son going to New Hampshire on his internship with the federal park service for the summer, he leaves sunday morning, his Suzuki Marauder gets dropped off for me to use while he's gone tomorrow :D :D :D :D
 
The problem with the entire tax code is that it is overly Byzantine. If you haven't seen it, I recomment you check it out - you can find it on the US House of Representatives site, as I recall. You'll want to wade through Code of Federal Regulations, Title 26 (Internal Revenue Code.)

I think it's the largest section there - and probably beats everything in CFR and USC (United States Code.)

I've long thought that a flat tax would be easiest and best - say, five to seven percent total. No deductions. No exemptions. If you work, you pay taxes. If you do not work, you do not pay taxes. There is no need to fill out the return, itemise everything, figure out you missed something four months later, retain a bevy of accountants, or whatever.

Current "official" proponents of the flat tax or the NRST want to make it "revenue neutral," but I honestly don't find that necessary. Besides, an awful lot of people work in government and don't actually produce anything (thus dragging down the GDP and inflating the dollar,) and once the flat tax is brought in, a lot of administrative overhead and enforcement overhead can be easily released (the IRS could easily tolerate a RIF of 70-75% - possibly more - with a Flat Tax in place. They wouldn't need to audit returns, they wouldn't need to process returns, there's no need to print and distribute all of the paperwork, the tax tables no longer need to be calculated, ... There's most of the IRS' function right there! Elimination of unproductive middle management, petty bureaucracies, and the quasi-fiefdoms of middle management would likely account for a 20-30% RIF all across the government, and more could be found without a great deal of effort.

When you come right down to it, the Federal government is the biggest, most Byzantine organisation we have to deal with; they write the laws and rules to which we are subject - but we can't keep up with; and we pay them for the privilege!

Concurrent with reduction in civil service, let's:
1) Reduce pay for elected officials (most of them are independently wealthy anyhow, and the rest of them are probably just there for the money, and can't do anything else useful as of yet.)
2) Eliminate retirement for electees. This will probably be more useful in turnover than actually setting term limits.
2a) Alternatively, give Congresscritters the exact same benefits as retired military. Or put them on Social Security. Either one will see a system getting fixed in a big hurry (Social Security, of course, would come with Medicare...)
3) Impose term limits anyhow - just to make sure they turn over fairly frequently.
4) Make them more accountable to us - they work for us, not the other way around. Yes, I know that some secrets need to be kept, and I've no trouble with that. On a Defence level, this is true. However, with LE, it's not necessary for very long. Make them accountable if/when they make mistakes - including termination (professional or personal. Does the name Lon Horiuchi ring any bells?)
5) If Congresscritters want to increase their compensation, it gets voted upon by the body politic. They have to stand before us, hat in hand, and explain just why they need the rate-round, what they've done to deserve it, and how much they need. Better be sure of yourselves - if it fails to pass, you could have problems...
- Let's say they're asking for a rate-round of 10%. If:
-- Less than 50% of the voters approve it, their pay is decreased by 10% instead.
-- 51-65% approval means their compensation remains static
-- It takes a "supermajority" of 66% of votes returned to approve the pay rise.
6) Once you've served a term in an office lower than POTUS (or two, if a two-term consecutive limit is imposed,) you are ineligible to hold office for at least one full term after you leave. No more of this "I've been here for thirty years" crap - that needs to go anyhow.:twak::twak::twak:

That's all for the moment.
 
The longer a loans duration, the more money the bank makes off your interest. If you pay extra principle, especially at the beginning of your loan to bring down the principle, you will pay less in interest over the long term of the loan, and save money. The value of your house, and thuse your equity will go up as the housing market goes up. The difference between what you actually bought your house for, and what you could sell it for in the future is your profit. Maximize your profit if you can.

At this point, feeding a 401K increases the number of shares you own in the fund. When the price per share goes up, so will your balance. I think that the only people seriously freaking about 401K values right now are those who either have stagnant money in the account, or those who plan on retiring soon.

-Ron

Yeah, I'm familiar with the amortization schedule and all (I should have mentioned that I'm in the business). The problem is that right now, banks are loosing their asses. For most lending institutions right now, money is money! Profits would be nice, but just getting some revenue flowing would be HUGE.

And I appreciate the explanation of the 401k thing too. I do realize that. I just have a lot more time to turn my 401k around than I do my house
biggrin.gif


Billy
 
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