Thursday, March 27, 2014

A Conservative Response To Progressives Who Propose Higher Taxes On The Super-Rich

Charles Lane is one of the conservative editors of the Washington PostHe points out that some of the largest tax expenditures benefit upper middle class progressive in blues states that want to raise taxes on the super-rich.  Some of the biggest tax expenditures, which primarily benefit, the upper middle class progressives, are related to home ownership.  They can deduct mortgage interest payments from their gross income, and they also benefit from a lower capital gains tax when they sell their homes.  Areas in the US with the highest home prices receive most of the benefits from these tax breaks.  They also happen to be the areas in the US where most of the progressives live.  Lane suggests that the progressives in these blue areas better watch out.  Those tax breaks do not increase home ownership because many homeowners do not earn enough income to take advantage of those deductions.  They take the standard deduction when they file their tax returns.  Instead of increasing home ownership, the tax breaks increase the price of homes by 11-18% and that varies by region. Home owners in blue regions benefit more than those in other regions.

Lane's message is that progressives better watch out or they may get what more than they have asked for when they promote higher taxes on the super-rich.  They may lose one of their most valuable tax breaks in the process.

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