Al Gore, who is currently basking in the (global) warming afterglow of his Nobel Peace Prize may soon be on the losing end of a proposed change to one of the bedrock principles of the U.S. tax code, namely, the mortgage interest tax deduction. Sadly, while Al Gore probably won't miss the money, many of those who live on the North Shore may fall victim to a hairbrained scheme proposed by Representative John D. Dingell (D-MI), who is the Chairman of the House Energy and Commerce Committee. Mr. Dingell proposes to phase out the mortgage interest deduction on "large" homes (defined as anything larger than 3000 square feet). Read the summary from Dingell's website here.
Dingell states, "These homes have contributed to increased sprawl and longer commutes. Despite new homes in and of themselves being more energy efficient, the sheer size, sprawl and commutes lead to dramatically more energy use – or to put it more simply, a larger carbon footprint."
Specifically, the proposal:
Phases out the mortgage interest on primary mortgages on houses over 3000 square feet. An owner would receive....
85% of the mortgage interest deduction for homes 3000-3199 square feet
70% for homes 3200-3399 square feet
55% for homes 3400-3599 square feet
40% for homes 3600-3799 square feet
25 % for homes 3800-3999 square feet
10% for homes 4000-4199 square feet
0 for homes 4200 square feet and up
There are exemptions for historical homes (prior to 1900) and farm houses and exemptions for home owners who purchase carbon offsets to make home carbon neutral or own homes that are certified carbon neutral.
Well, folks, I don't know about you, but I can think of a dozen problems with this legislation without even breaking a sweat.
First, this is what we were trained in law school to debunk as "over and under inclusive reasoning." The faulty initial premise is that big houses are BAD, because they are all energy hogs. This is over inclusive, in that not all big houses have large carbon footprints, as more modern homes in general are farm more energy efficient than comparable homes built even 15 or 10 years ago. Therefore, a 4000 sq. ft. home built last year may well be more energy efficient than a home half that size that was built 50 years ago. It is also under inclusive, as there are plenty of older homes out there that not only leak energy like sieves, but have such inefficient heating plants (fuel oil furnaces, anyone?) that will not be captured by this legislation, because they are below the minimal size threshold.
Moreover, how will this tax be collected? There is no national property tax and no current mechanism for collecting such a tax; therefore, there is no standard for determining the square footage of a house. Ever discuss this issue with a real estate agent listing a home? Do you count the closets and hallways, or not? Is a an enclosed porch included? How about a detached (but heated) garage? How about a basement? Does it matter if it is finished (and heated) or not? How much wasteful bureaucracy would have to be created from scratch just to administer this change? Are we all required to go out and get certified appraisals that will definitively assess the square footage of our houses? Will it be the honor system- any guesses on how many cheats there will be with that plan, and how will the system be enforced???
Not only is his proposal unworkable from a practical standpoint, he simply doesn't know what he's talking about. Big houses do not (in and of themselves) cause urban sprawl. Moreover, big houses are sometimes necessary to house BIG families--many of which tend to be minorities and would be hardest hit by the loss of this deduction. Perhaps Mr. Dingell is also oblivious to the current sub-prime mortgage crisis and thinks that an additional impedement to home ownership should be placed on the backs of working people.
How does Al Gore feel about this? His energy-guzzling 10,000 sq. foot house not only should lose its tax deduction under Dingell's scheme but be liable for an energy penalty. But, that wasn't mentioned in his movie, which has been discredited as fraught with scientific inaccuracies.
In the end, it's those of us on the North Shore who are simply trying to provide a nice home for our families and send our kids to college (and save a few bucks for retirement so we don't have to eat dog food out of a can) that will bear the brunt of this ivory tower scheme. I guess this is what passes for leadership from the Dems nowadays.
Dingell states, "These homes have contributed to increased sprawl and longer commutes. Despite new homes in and of themselves being more energy efficient, the sheer size, sprawl and commutes lead to dramatically more energy use – or to put it more simply, a larger carbon footprint."
Specifically, the proposal:
Phases out the mortgage interest on primary mortgages on houses over 3000 square feet. An owner would receive....
85% of the mortgage interest deduction for homes 3000-3199 square feet
70% for homes 3200-3399 square feet
55% for homes 3400-3599 square feet
40% for homes 3600-3799 square feet
25 % for homes 3800-3999 square feet
10% for homes 4000-4199 square feet
0 for homes 4200 square feet and up
There are exemptions for historical homes (prior to 1900) and farm houses and exemptions for home owners who purchase carbon offsets to make home carbon neutral or own homes that are certified carbon neutral.
Well, folks, I don't know about you, but I can think of a dozen problems with this legislation without even breaking a sweat.
First, this is what we were trained in law school to debunk as "over and under inclusive reasoning." The faulty initial premise is that big houses are BAD, because they are all energy hogs. This is over inclusive, in that not all big houses have large carbon footprints, as more modern homes in general are farm more energy efficient than comparable homes built even 15 or 10 years ago. Therefore, a 4000 sq. ft. home built last year may well be more energy efficient than a home half that size that was built 50 years ago. It is also under inclusive, as there are plenty of older homes out there that not only leak energy like sieves, but have such inefficient heating plants (fuel oil furnaces, anyone?) that will not be captured by this legislation, because they are below the minimal size threshold.
Moreover, how will this tax be collected? There is no national property tax and no current mechanism for collecting such a tax; therefore, there is no standard for determining the square footage of a house. Ever discuss this issue with a real estate agent listing a home? Do you count the closets and hallways, or not? Is a an enclosed porch included? How about a detached (but heated) garage? How about a basement? Does it matter if it is finished (and heated) or not? How much wasteful bureaucracy would have to be created from scratch just to administer this change? Are we all required to go out and get certified appraisals that will definitively assess the square footage of our houses? Will it be the honor system- any guesses on how many cheats there will be with that plan, and how will the system be enforced???
Not only is his proposal unworkable from a practical standpoint, he simply doesn't know what he's talking about. Big houses do not (in and of themselves) cause urban sprawl. Moreover, big houses are sometimes necessary to house BIG families--many of which tend to be minorities and would be hardest hit by the loss of this deduction. Perhaps Mr. Dingell is also oblivious to the current sub-prime mortgage crisis and thinks that an additional impedement to home ownership should be placed on the backs of working people.
How does Al Gore feel about this? His energy-guzzling 10,000 sq. foot house not only should lose its tax deduction under Dingell's scheme but be liable for an energy penalty. But, that wasn't mentioned in his movie, which has been discredited as fraught with scientific inaccuracies.
In the end, it's those of us on the North Shore who are simply trying to provide a nice home for our families and send our kids to college (and save a few bucks for retirement so we don't have to eat dog food out of a can) that will bear the brunt of this ivory tower scheme. I guess this is what passes for leadership from the Dems nowadays.
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8 comments:
TA......Thanks for making my Monday morning filled with laughter! John Dingell can't be serious.....can he? In the 10th District we have hundreds of homes WAY beyond 3000 square feet.....some condos are larger than that as well. And, as you point out, Nobel Winner Gore's manse is almost 3 times that large. We needed a bit of humor from a leader on the other side of the aisle. Thanks for the great laugh this morning. I guess Mr. Dingell can't find real ways towards fiscal responsibility for his party to embrace.
Anon 8:10- the interesting thing is, that Dingell may NOT in fact be serious, but has proposed this legislation to supposedly prove a point that Americans are not willing to pay for what it will cost to combat global warming.
If that's in fact his goal, I wish he'd: #1) just issue a press release to make a statement rather than squandering government resources to propose legislation he admits himself is doomed to failure; and #2) if he's THAT concerned, try to figure out a plan that calls for a multi-national, truly global solution to energy consumption, rather than single out normal working Americans as the collective demons of overconsumption and big houses.
To your point, TA, Mr.Dingell needs to take issues seriously. With the debate still raging on the global warming issue, I think it behooves all of our elected officials to use their time and our resources wisely to solve the issues confronting all Americans. How about a real discussion on Healthcare. One of our 10th District physicians just made a very insightful comment when asked about his thoughts on helping solve the problem. His answer: If you don't have a seat at the table, you're most likely on the menu! How right he is! We know that patients and physicians are, at this moment,on the "menu" since we and they are NOT seated at the 'table'. How about Mr.Dingell taking a major lead on this issue. How about a serious discussion about how to provide access to care for Americans without calling for a federally funded and run program from cradle to grave that is a failure before it's even attempted. All the talk is great....nothing yet makes sense until we ALL have a seat at the TABLE. I don't like fun and games from serious legislators. I think we need and deserve thoughtfully concerned legislators in Springfield and DC who don't play games but who take their responsibilities in a serious vein. Thanks for explaining what John Dingell was attempting today. And TA, your Blog is the best thing that's happened out here. I'm not being patronizing.....just honest. You and UM are serious in your desire to lead real discussions and not hate filled posts with no validity.
Thanks much, Anon 12:08. Boy, if Dingell makes you angry for his shenanigans as a so-called "serious" legislator, I can only imagine how you feel about the insanity going on down in Springfield...
Hey Team America,
Great blog, thanks for the comment concerning Ellen's Tenth... I am pretty sure that you're not surprised that Ellen has declared you to be persona non grata in her community. I haven't been over there in a while, I just haven't had the time to read the work of those folks, they have some, ahem, issues.
I heard Dingel defend this one last week, this is the only way that they can start to chip away at the mortgage deduction. That may also be the best way to try to frame the issue. Hating rich people has become such a strong emotion on the left (among some of my fellow Chicagoans its a wonder that they can shave/put on make up in the morning) that this issue could just become an election year whipping post.
Btw The blog's clock is on Pacific Time
TA,I just took an extra blood pressure med! Don't get me started on our distinguished and professional legislators in Springfield. That will require ANOTHER dose of meds. If it wasn't so important to all of us who live in this State one could write a Saturday Night Live bit about that insanity. When last I checked the Dems control just about everything down there, right?Is there anything positive that we can point to from our Gov, our Senator or our Reps? Please tell me I'm just too cynical. Our doctors who accept public aid are not getting paid.......it takes more than 9 months to get the 26 cents on the dollar they receive for seeing the neediest in our State. Better to just write it off, right? So tell me, TA, what IS working right down there in Springfield? My fear is that the SCHIP money that will come from the Federal Gov't to our fair State will most likely not make it to the kids who actually NEED the care. I know that in our benevolent State we are taking care of more adults than needy kids. Oh well, I guess it's business as usual down there. I need to take an Excedrin for my headache.
Thanks El Rider- as you can tell, I'm somewhat new at this, so I was wondering why the computer thought I was blogging at 3:00 in the morning. I'll see if I can figure this out.
BTW, I'd be interested to see if one of your posts at Ellen's would be allowed to stay up.... wasn't sure if you and Badge of Honor and some of our others friends have simply moved on or have also been blocked by Ellen.
As to chipping away at the mortgage deduction, I can't understand why Congress would want to do that, except the typical reasons for want to take money from hard working people and having the power to spend it themselves. As you might expect, it is much more politically acceptable to remove deductions than actually implement a new tax or raise an existing one, but this is about the last "sacred cow" of the tax code that is left, and you can bet people would stand up and take notice (as they have) regarding anyone messing around with this aspect of the tax code.
Interesting, I recall studying in tax policy class in law school (boy, that was a hoot, let me tell you) how the government seeks to encourage or discourage behavior by manipulating the tax code. The whole reason for the mortgage deduction is to encourage home ownership, which is something almost every politician (even the Dems) would probably agree is a worthy goal. So why would Dingell and his cohorts seek to DISCOURAGE home ownership, especially at this point in time? The simple answer--the unspoked premise is that anyone who can afford a house bigger than 3000 sq. feet has too much money, and that money must be redistributed to others one way or another.
This is simply the same old wealth redistriubtion scheme of the Dems in wolf's clothing and has little to do with promotion of sound environmental policy.
I recall during the Dark Times (when the Dems controlled the White House and Congress in 1993-1994) the issue of raising the minimum wage came up. The great Dick Armey offered an amendment in committee that would have increased the minimum wage to $26 per hour, noting that by the Dems' logic, this would eliminate poverty entirely.
He was joking of course, for the purpose of showing how silly the issue of minimum wage actually was. Perhaps Mr. Dingell has stolen a page from the Dick Armey playbook.
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