MacArthur a hero for NJ, or not?

From the Washington Post:

The GOP’s $10,000 cap on property tax deductions and how it affects one congressional district

“According to data direct from the IRS, allowing property tax deductions up to $10,000 — which I fought for and won — will cover nearly every taxpayer in the Third Congressional District.”
— Rep. Tom MacArthur (R-N.J.), in an opinion article, Nov. 18, 2017

A key feature of the House and Senate tax bills is ending the deduction for local and state taxes, which has been a feature of the U.S. tax code dating back to the Civil War. Republican leaders have argued that the low-tax states are subsidizing the high-tax states because the taxpayers in those states can’t deduct as much from their taxes. Indeed, six states — California, New York, New Jersey, Illinois, Texas and Pennsylvania — claim more than half of the value of all state and local tax deductions nationwide, according to IRS data. In the tax trade, the deduction is known as the SALT deduction.

But this had been a problem for Republican lawmakers from those states, as it means that at least some of their constituents might face higher taxes. During deliberations in the House, MacArthur won a compromise that would allow as much as $10,000 in property taxes to continue to be deducted. (A similar provision was added to the Senate version in the flurry of last-minute bargaining.) In an opinion article — which also favorably mentioned The Fact Checker — he argued that he managed to get a deal that “will cover nearly every taxpayer” in his district.

We decided to take a ground-level look at how he justifies this statement.

The Facts

The 3rd Congressional District is in the south-central portion of New Jersey, covering most of Burlington County and portions of Ocean County. The median household income is $68,300.

MacArthur was initially opposed to the GOP plan when it called for eliminating the deduction for all state and local taxes, arguing for an exemption for property taxes. He made the case that while income taxes are based on how much you make, property increases in value beyond a person’s control. (A retiree may have lived in a house for many years, for instance.) According to the Tax Foundation, New Jersey has the highest per capita property tax of any state.

Since 1996, New Jersey has capped the deduction for property taxes at $10,000, so the House bill would be in line with that concept. MacArthur was the only GOP lawmaker from New Jersey to support the tax bill, with the others decrying the impact on taxpayers in New Jersey who itemize deductions.

According to MacArthur’s staff, IRS data show that there are 360,000 taxpayers in the 3rd district, of whom 210,000 take the standard deduction or do not take a deduction for the property tax. That means that about 42 percent of taxpayers itemize, which is higher than the 30 percent for all U.S. taxpayers.

Two other big deductions — for mortgages and charitable contributions — would still be allowed, though the House would reduce the size of new mortgages that can be covered from $1 million to $500,000. (The Senate bill makes no reduction.)

MacArthur’s staff says that these are conservative estimates, but essentially 93.3 percent of taxpayers in the district would be covered by the $10,000 property tax cap. That figure, they say, justifies the use of the phrase “nearly every taxpayer” in the opinion article. But it also means that 24,000 taxpayers — or 16 percent of the people who itemize — in his district are not covered by the cap.

Sounds good but, alas, it’s not quite so simple.

Under the House bill, the standard deduction would be doubled to $24,400 for couples and $12,200 for individuals. In many cases, these amounts would be higher than what people currently itemize, so it would become more advantageous to take the standard deduction.

In other words, the $10,000 cap would then become meaningless to them, because they would need substantial mortgage interest or charitable contributions to get above the thresholds for the standard deduction. (The House bill would eliminate other deductions, such as for high medical expenses.) According to an estimate by the Institute on Taxation and Economic Policy, which has a microsimulation tax model and has been critical of the tax proposals, about 60 percent of New Jersey taxpayers would no longer claim the property tax deduction.

In theory, for many taxpayers the loss of deductions would not matter if the standard deduction is larger than what people would have claimed with itemized deductions. But the tax bills would also eliminate dependent and personal exemptions worth $4,050 each. Instead, a child tax credit would be expanded, to $1,600, and there would be a new $300 family credit, but these would phase out at income levels of $115,000 for single parents and $230,000 for married parents. Single tax filers would lose their exemptions but of course would not get a child or family credit.

MacArthur thus is highlighting the impact of the property tax deduction in isolation without considering the interaction with other aspects of the tax bill. An analysis of the Senate tax bill by the New York Times, focusing on the impact on the middle class, found that people who pay a lot in state and local taxes (more than $4,400) have a greater chance of experiencing a tax increase.

This entry was posted in New Jersey Real Estate, Politics, Property Taxes. Bookmark the permalink.

142 Responses to MacArthur a hero for NJ, or not?

  1. Steamturd, Part Time Orientalist and Full Time Mysoginist says:

    Bet

  2. 3b says:

    The property tax in NJ capped at 10 percent since 1996?

  3. Grab them by the puzzy says:

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  4. CNN says:

    NJ property tax deduction is capped at $10,000 on NJ State Income tax

  5. 3b says:

    Oh ok that makes sense.

  6. Alex says:

    Uncovering Democrats:
    Democrats
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  7. Hold my beer says:

    My taxes will stay about the same, maybe even go down 3k. Our itemized deduction losses would be offset by the tax rates dropping by 3% so we would be roughly the same plus or minus a few hundred. I don’t think we were eligible for the child credit before, so if the $1,600 child credit goes through we actually would get an extra 3k back.

    If we owned the infamous pos cape in nj our taxes would definitely be going up.

  8. Ottoman says:

    Only someone who jerks off thinking about diddling 12 year old girls at the mall would waste their time creating that post below. No wonder Moore is surging in the polls over the Democrat who prosecuted the Klan.

    Alex says:
    December 4, 2017 at 9:47 am
    Uncovering Democrats:
    Democrats
    Emocrats
    Mocrats
    Ocrats
    Crats
    Rats

  9. Fast Eddie says:

    DOW up 280!

    Thank you, President Trump!

  10. chicagofinance says:

    Unintended consequence of states with income taxes is that the Senate and House bills put pressure of state and local governments to hold the line on spending……….

    I actually think the $10,000 cap is genius…….creates a benchmark that is greater than zero……. obviously it put the fear of G-d in Murphy……… I think it is interesting to be honest…..

  11. grim says:

    NJ stands to gain tremendously as a result of the corporate and pass-thru tax reductions. Despite this being a shitty place to do business, the fact of the matter is we do a shit ton of business.

  12. Steamturd, Part Time Orientalist and Full Time Mysoginist says:

    Got the paperwork to get my name of the deed and the LLC onto it.

  13. Fast Eddie says:

    I still don’t fully understand how the elimination of SALT and the $10,000 cap on property tax reductions alter the numbers. Can anyone provide what will be gained or lost for us here by using an example?

    For instance: Let’s say a married couple will earn $100,000 per year with property taxes of $11,000 per year when this all kicks in. How much more could they expect to pay in Fed taxes? I haven’t found an example that let’s you “see” it clearly.

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  15. Alex says:

    Ottoman, despite having to take the short bus to school everyday, you’ve done pretty well for yourself. Now please report to aisle 3, someone’s dropped a jar of grape jelly and it needs to be cleaned up.

  16. nwnj says:

    Eddie, you have to run the whole formula. There is the doubling of the standard deduction, lower brackets etc. so no one size fits all.

    One thing is for certain, if you own a 30k tax cow on a main road, you are going to take a big hit. 20k less in itemized deductions and that will take a big toll on resale value as well. The massive 30k deduction was baked into the price of houses in these liberal NJ towns and there will be a price adjustment across the board.

    It will be mayhem in the assessors offices 2-3 years down the road.

  17. nwnj says:

    And the pass through LLC reduction to 25% exclusions professional services. So the working man takes it in the shorts and the moneymen win as usual.

  18. joyce says:

    nwnj,
    Agreed it’s ridiculous. How the services they provide are not considered professional services is nonsense (as well as the fact it should have always been ordinary income, of course).

  19. 3b says:

    Fast just quick example husband wife two kids 16k about in personal exemptions plus 10k in property taxes plus say 5k in mortgage interest. Total equals 31k. New plan 24 standard no personal exemptions your itemized deductions are now 10k in property tax plus 5 in mtg interest for a total of 15. No need to itemize any more the standard of 24k is better.

  20. Ben McAdoo says:

    Damn Key card isn’t working again.

  21. Daddy Deported says:

    Perhaps the new tax bill will fix the inventory problem? Bergen County SFH might go on sale. Pumps can move on up, using more free money.

  22. Hold my beer says:

    Ben,

    You made me miss ray handley

  23. Daddy Deported says:

    I heard some talk over the weekend that the House might just pass the Senate Bill as is, rather than risk two more floor votes. If that happens, It’s already done.

  24. 3b says:

    And crickets is all I am hearing!! I assume people never thought it would happen or they just have not been paying attention. Some people will be shocked

  25. Daddy Deported says:

    I’m pretty sure that Conyers is just going to stay home and bang checks (maybe chicks? maybe Czech chicks?) until January 2019.

  26. leftwing says:

    “I heard some talk over the weekend that the House might just pass the Senate Bill as is, rather than risk two more floor votes. If that happens, It’s already done.”

    It’s the Repub insurance policy. If something goes wrong – lose a Repub seat on Dec 12 in Alabama, deficit hawks decide to really wander off the ranch, etc – the House can just take the Senate bill with no changes and pass it. Would piss off a lot of members, but would happen they have the margin in the House. Right now, the bill will go to committee conference.

    Same thing occurred with ObamaCare. Senate passed the bill with no votes to spare on Christmas Eve 2009. Then in January the Dems unexpectedly lost dead Ted Kennedy’s Senate seat in the special election to Brown, a Repub. They couldn’t let the bill go to any further votes otherwise they would have lost.

    The House then picked up the ObamaCare bill from the Senate and passed it as written.

    Repubs would do the same thing here if needed.

  27. D-FENS says:

    Not sure if Libtard saw this:

    http://thehill.com/policy/healthcare/taxes-and-fees/362818-collins-senate-bill-will-include-medical-expense-deduction

    Sen. Susan Collins

    SUSAN MARGARET COLLINS
    Susan Collins is swing vote on tax bill
    Top GOP senators say they have the votes to pass tax bill
    GOP will sell out middle class for a win on tax ‘reform’
    MORE
    (R-Maine) tweeted Friday that the final Senate tax-reform bill will include an amendment she favors that lowers the threshold at which individuals can deduct qualifying medical expenses.

    Collins, a key swing vote who increasingly looks like she’ll back the bill, has been at the center of attention Friday as GOP leaders seek to win over at least 50 of their members.

    That’s given leverage to Collins, who has been pressing for a number of changes to the bill.

    Under current law, the IRS allows individuals to deduct qualified medical expenses only if they exceed 10 percent of a person’s adjusted gross income for the year. The threshold was first increased in 2013 as a way to help pay for ObamaCare.
    The amendment from Collins would lower that threshold to 7.5 percent for 2017 and 2018.

    “The Senate bill will include my amendment to reduce the threshold for deducting medical expenses, which helps people with high medical costs, particularly seniors & people with chronic conditions,” Collins said on Twitter. “8.8 million Americans use this deduction, half with incomes of $50,000 or less.”

  28. JCer says:

    Only thing I’m pissed about in the senate bill is that the AMT still lives….. But if I understand correctly I can go LLC offer my services and be taxed at 23% up to 250K on the pass through income, might make sense to start my LLC up again.

  29. leftwing says:

    “Detroit lawmakers, activists plan rally in support of Rep. Conyers”

    Rep. Conyers, Congressman 1965-2017. “American icon”.

    City of Detroit, 1965-2017, poverty rate of 40%, filed for bankruptcy, highest violent crime rate in the country. “American horror show”.

    The Democrat establishment is truly a horrible, indifferent bunch of hacks.

    People deserve what they get. Support this guy? You’d have to brain dead. He should have been run out of town by an angry mob decades ago. Nice job, Dems.

  30. Grab them by the puzzy says:

    @TheEconomist

    America’s flat-earth movement appears to be growing

  31. taxed says:

    Don’t worry too much about AMT, if you can’t deduct SALT and only 10k of property taxes… not to mention no personal exemption add back, you probably won’t be in it.

  32. Hold my beer says:

    3b

    If we were still in nj we would be losing About 20-25k in deductions causing us to have our taxes go up 1-6k depending on the child credit.

  33. 3b says:

    Hold I think it’s going to have a big negative impact on real estate prices in New Jersey. It’s no longer going to be the siren call of hey you can right it off on your taxes!! It could be a real positive for younger generations that may wish to buy.

  34. Blue Ribbon Teacher says:

    The economist? You know, as Physicists, we assume a flat earth for a variety of problems where the curvature of the earth is negligible. We bring in the curvature of the earth where necessary. Economists are still stuck in the flat earth approximation for their outdated theories yet cling to them.

  35. JCer says:

    call it by the right name its The Ecommunist

  36. Steamturd, Part Time Orientalist and Full Time Mysoginist says:

    I’ve been following this tax deform real closely. I’ll be OK due to my LLC. Those in my situation without an investment property and with massive medical bills are screwed.

  37. yome says:

    On 3b exampke at 11:27 family making $100k deductions of $31,000 taxable income of $69k will pay fed tax of $9,426 in 2016 . If House bill pass at,12 % bracket for taxabpe income up to $90,000 ($100k – $24k standard deduction ) ×12% = $9,120. A saving of $306.00

  38. No One says:

    The Economist is a shadow of it’s former self, now just another center-left business weekly. Abandoned classical liberalism for conventional wisdom at least 15 years ago. Sad, because it once stood out. But journalism school doesn’t graduate people capable of such thought any more.

  39. yome says:

    3b 11:57

  40. 3b says:

    Yome no incentive to rationalize property tax increases because of all our wonderful services by saying oh you can right them off. No deduction for home equity loans is another hit to the real estate market too.

  41. Hold my beer says:

    3b,

    I think it will impact the northeast and West Coast real estate market bigly.

  42. Hold my beer says:

    And not doing home equity loans will impact renovations, parents paying for college, big tixket items, all kinds of things be impacted

  43. Steamturd, Part Time Orientalist and Full Time Mysoginist says:

    Chi: Do you really think it will help control property tax increases going forward? Since when did any of these serpents care about how much we pay for them?

  44. 3b says:

    Home I agree. If one wants a home equity loan now they will have to go for a whole new mortgage if they want the tax deduction and if they cannot afford a shorter payment period. It will definitely impact the northeast and west coast. There may be some good in all of this if it forces people to be disciplined and live within their means.

  45. Hold my beer says:

    Time, that family probably has more than 15k a year in property and mtg int deductions. Plus they can’t deduct state income taxes and will lose whatever non llc stuff they used to itemize. More like they will lose 35-40k in deductions.

  46. 3b says:

    Steam people may actually pay attention to property taxes now after we find out we might not be as wealthy as we thought since we can no longer deduct more than 10k.

  47. 3b says:

    Oh and Democrats secretly have no problem with this tax reform.

  48. 3b says:

    I guess we are not bleeding wealth anymore!!

  49. Juice Box says:

    Not sure what some of you are all caterwauling about. If you paid AMT you did not deduct SALT or any HELOC interest that was used for non-home improvement expenses.

    For those that pay a crap local property tax, you knew what you were buying be thankful for the 2% cap that Fatso gave you nearly 7 years ago…..That 2% property tax cap was enacted on a permanent basis. Before the 2010 CAP law was put in place the average New Jersey property tax bill was increasing by as much as 7% annually. How much would your taxes be today without that law? Well think hard about it because things are about to change at the end of this month.

    Any of you think Governor elect or else Phil Murphy and the Democrats in the legislature are going to keep the 2 % CAP in place?

    Well the meat and potatoes of the CAP is the salary-arbitration CAP law which will sunset Dec 31st, after being enacted in 2011. The Unions will want payback y for their political contributions and their victory in November.

    Unless action is taken in Trenton that 2% limit on the salary increases the Union workers receive from arbitration will expire and you will be bent over again by the local politicians after the GOP led Congress and Trump had their way with your rump…..

    The cities and towns will have to cut services to pay the cops and firefighters due to arbiration increases to still stay within CAP, meaning exemptions from Trenton and a repeal of the 2% CAP law.

  50. yome says:

    Only Problem with 3b example, it is missing State income Tax deduction of $4,000. If deductions are $31,000 plus $4,000 State Tax= $35,000. $100K-$35K Deductions equals to $65K Taxable income. Fed tax in 2016 is $8,826.00

    If House bill pass at 12 % bracket for taxable income up to $90,000 ($100k – $24k standard deduction ) ×12% = $9,120

    Nj is paying $294.00 more on 3b example

  51. yome says:

    A Red State Family taking Standard Deduction in 2016 is paying $100K-$12,200 Standard Deduction-$16K in Exemption = $71,800 Taxable Income $9,839.00 In Fed Tax

    If House bill pass at 12 % bracket for taxable income up to $90,000 ($100k – $24k standard deduction ) ×12% = $9,120

    Red States is paying $719.00 Less

  52. 3b says:

    Juice so we are not bleeding wealth here!!

  53. 3b says:

    Juice lots of people using helocs that are not amt subject. Still stunned about the couple I told you about last week.

  54. 3b says:

    People are going to miss Christie they just don’t know it yet! Now we are stuck with the Joker!

  55. 3b says:

    Are condo/ co-op maintenance charges still deductible?

  56. Juice Box says:

    3b – Not there yet HELOCs are about half as much as in 2005, banks are still conservative with lending. Plenty of equity, however, can be tapped. Core Logic puts out some research and the FED has a breakdown of the numbers too somewhere. We have a way to go…

  57. D-FENS says:

    We’re in uncharted territory here. The inability to deduct property taxes is a force that would seem to discourage home ownership and depress prices.

    One would think that increasing mortgage rates would also depress prices however, I recall Grim showing on this very blog that the real world result can be much different. Rising rates usually means the Fed is trying to cool overheated markets. A booming economy might be a greater force than increasing rates…

    If current economic trajectory continues, it too might be a greater force than the loss of SALT.

  58. Sima says:

    The discussion about what someone will pay in taxes with the new tax plan hasn’t really discussed medical deductions also being part of itemized deductions.

    Contract workers pay for their own medical insurance – typically over $1000. per month ($12000+ annually), plus may not have co-pays (we don’t), eyeglasses and dental are extra expenses, and there is a big deductible. So in the end many wind up deducting some of that each year on both federal and state taxes.

    Add in state & local taxes, mortgage, property taxes, charity, etc – and the loss of the combined deductions will be huge on the tax bill .

  59. D-FENS says:

    I believe Senator Susan Collins amendment allows you to deduct medical expenses.

  60. The Great Pumpkin says:

    As the standard of living goes down with the rise of income inequality, they want you abandon the single family homes in exchange for cramped living conditions. Our corporate lords really want to turn this society into the likes of Brazil. Sad….happening before our eyes. The America you all knew and grew up in is nothing more pages in the history books.

    America’s future depends on the death of the single-family home – Business Insider
    https://apple.news/AG8Z47axvT1GK6PUy8CwNDA

  61. 3b says:

    Juice but helocs will not be deductible correct? Grim said you will have to take whole new mortgage.

  62. Hold my beer says:

    Pumpkin,

    That article is about California allowing granny flats to be built in the backyards of existing single family homes and the reduction of red tape to speed up constitute new single family homes

  63. 3b says:

    No stupid morons paid ridiculous prices asked by the locusts generation!! And agree to pay outrageous property taxes because our schools and services are supposed to be superior!! Now only to find out we are not bleeding wealth as we thought we were.

  64. yome says:

    A part of Sima’s concern; Will Medical Insurance Employee Contribution continue to be before tax? Employer Contribution will probably continue to be deductible. What happens to the Employee Contribution?

  65. The Great Pumpkin says:

    That’s how it begins…

    This is no different than affordable housing push in nj…it always results in high density living that drives down the overall standard of living.

    Hold my beer says:
    December 4, 2017 at 3:40 pm
    Pumpkin,

    That article is about California allowing granny flats to be built in the backyards of existing single family homes and the reduction of red tape to speed up constitute new single family homes

  66. The Great Pumpkin says:

    They paid the market price. Simple as that. Changing the dynamics of the market is wrong, and that’s exactly what this tax reform is doing…

    3b says:
    December 4, 2017 at 3:43 pm
    No stupid morons paid ridiculous prices asked by the locusts generation!! And agree to pay outrageous property taxes because our schools and services are supposed to be superior!! Now only to find out we are not bleeding wealth as we thought we were.

  67. Juice Box says:

    3b – Behaviorial changes? The total amount of HELOCs out there are half as much as 2005. Rates are still low and money is still cheap. I guess some people have learned their lesson? Trade-ups to the bigger box not so much?

    Stay in smaller house and slap a box on the back?

    Seems the remodeling index (RMI) is up depending on Region.

    https://www.nahb.org/en/research/housing-economics/housing-indexes/-/media/5A24A16D1B754098B61EC147736E4051.ashx

    I believe with the upcoming changes in consumer confidence (DOW 30k etc) we could see an uptick in remodeling but by removing the tax incentive on HELOCs to remodel removed will it tamp it down as well?

  68. 3b says:

    Juice that is what I was getting at. The helicopter route will no lo get be tax deductible. So maybe just some basic renovations not master bedrooms and baths for royalty! But to get the deduction for those who want it they will need to reset the mortgage clock.

  69. 3b says:

    They did not have to pay they chose to pay. Fair play to the old deckers of the baby boomers generation you got these new idiots to pay. Now the new buyers may be hurt well it’s your own fault. You shouldn’t have paid and listened to l the b.s. hype that induced you to pay.

  70. yome says:

    Under the Tax Code,the Original Mortgage is the one deductible. The preceding Refinance is not suppose to be deductible. For some reason this was not implemented by the IRS

  71. 3b says:

    Yo me interesting.

  72. Juice Box says:

    3b – again behavioral changes and beliefs…

    People do not believe housing prices can only go up? (except our resident orange cheerleader). The Banks aren’t aggressively marketing for HELOCs either. That can change on a dime.

    I do believe History Rhymes, we could see some new form of lending perhaps pop up in legislation down the road. After all, there are trillions in home equity out there to be tapped.

    Credit not used is credit lost perhaps?

  73. 3b says:

    Juice I disagree I know so many who think that they can only go up. The financial crisis was just a blip. They forgot about the last crash I’m the late 80s or were too young to remember. They believe Bergen county is Nirvana and the schools Harvard prep schools. This one couple I told you about modest income big addition no spring chicken they believe this like a fundamentalist does. Some others do know but refuse to acknowledge it.

  74. yome says:

    4:03 I can not find were I red that

  75. 3b says:

    Juice I agree there will be some way the banks figure out how to release this equity. But I think ultimately this will have a fundamental impact negative on many home owners but a positive for the younger would be home buyers down the road.

  76. leftwing says:

    Sima, if you are 1099 speak with a good accountant. Even now, I’m getting to deduct healthcare costs.

    Discussions with friends have me pretty far ahead. Have some guys with family deductibles that are equal to my premiums. These are mostly Fortune 100 employed types.

  77. yome says:

    Here it is:

    Refinanced home acquisition debt. Any secured debt you use to refinance home acquisition debt is treated as home acquisition debt. However, the new debt will qualify as home acquisition debt only up to the amount of the balance of the old mortgage principal just before the refinancing. Any additional debt not used to buy, build, or substantially improve a qualified home is not home acquisition debt, but may qualify as home equity debt (discussed later).

    Home equity debt is deductible to $100,000 only

  78. chicagofinance says:

    How many times have I told a client to pay down mortgage balances with excess money only to be told “but I’ll lose the tax deduction”…….this nonsense ends (theoretically)…..

    Steamturd, Part Time Orientalist and Full Time Mysoginist says:
    December 4, 2017 at 2:17 pm
    Chi: Do you really think it will help control property tax increases going forward? Since when did any of these serpents care about how much we pay for them?

  79. leftwing says:

    Sima, for clarification, I’m currently deducting premiums. Not subject to deduction thresholds. Also, has nothing to do with my businesses (other than that I opted to go to the individual market since any group policy was actually more expensive to me for my business to implement).

  80. chicagofinance says:

    No clear…..my point is that people are mislead by a seeming benefit that is truly a smokescreen for institutionalized theft…….

  81. chicagofinance says:

    Not clear….sheesh

  82. Juice Box says:

    3B – I could see some kind of retirement derivative investment being marketed based upon home equity, a reverse of a reverse mortgage.

    Heck, I think I just invented a new kind of derivative. Quick boys price this one to market.

  83. yome says:

    Interesting

    Home Equity Debt

    If you took out a loan for reasons other than to buy, build, or substantially improve your home, it may qualify as home equity debt. In addition, debt you incurred to buy, build, or substantially improve your home, to the extent it is more than the home acquisition debt limit (discussed earlier), may qualify as home equity debt.

    Home equity debt is a mortgage you took out after October 13, 1987, that:

    Does not qualify as home acquisition debt or as grandfathered debt, and
    Is secured by your qualified home.
    Example.

    You bought your home for cash 10 years ago. You did not have a mortgage on your home until last year, when you took out a $50,000 loan, secured by your home, to pay for your daughter’s college tuition and your father’s medical bills. This loan is home equity debt.

    Home equity debt limit. There is a limit on the amount of debt that can be treated as home equity debt. The total home equity debt on your main home and second home is limited to the smaller of:
    $100,000 ($50,000 if married filing separately), or
    The total of each home’s fair market value (FMV) reduced (but not below zero) by the amount of its home acquisition debt and grandfathered debt. Determine the FMV and the outstanding home acquisition and grandfathered debt for each home on the date that the last debt was secured by the home.
    Example.
    You own one home that you bought in 2002. Its FMV now is $110,000, and the current balance on your original mortgage (home acquisition debt) is $95,000. Bank M offers you a home mortgage loan of 125% of the FMV of the home less any outstanding mortgages or other liens. To consolidate some of your other debts, you take out a $42,500 home mortgage loan [(125% × $110,000) − $95,000] with Bank M.

    Your home equity debt is limited to $15,000. This is the smaller of:

    $100,000, the maximum limit, or
    $15,000, the amount that the FMV of $110,000 exceeds the amount of home acquisition debt of $95,000.

  84. leftwing says:

    For the NJ Real Estate, Economics, Politics, and Legal blog…..

    Sports gambling oral argument in front of SCOTUS today, Christie v NCAA. Will sports gaming in all 50 states prevail or no?

    Teavana. Judge in Indiana issued an injunction from a suit filed during the summer preventing Starbucks from closing Teavana stores in Simon malls as Starbucks has the wherewithal to sustain the money losing businesses and Simon property group less so. Hometown judge, for sure, but wow. Apologies for the Post link, but it actually has the most comprehensive coverage so far.

    https://nypost.com/2017/12/01/judge-bars-starbucks-from-closing-77-failing-teavana-stores/

  85. 3b says:

    Yome I never knew that was the definition. I would say a lot of people don’t.

  86. leftwing says:

    LOL, hope their accountants do.

  87. 3b says:

    Chgo the old borrow an extra dollar to get 30 cents back! The mtg deduction is s huge myth but it is so ingrained!

  88. 3b says:

    Then again the home equity loan I took some years ago I paid it back later that year with my bonus. So had it for under a year.

  89. Hold my beer says:

    Don’t schools look at home equity when determining college aid? But they don’t count retirement and 529 amounts in their aid formulas? I thought if you haven’t maxed out your retirement and 529 contributions you shouldn’t try to pay down your mtg unless you were trying to get a better rate?

  90. Hold my beer says:

    I know someone with a jumbo mtg who bought at the peak in 07. Would get six figures net of both stockngrants /options and a 6 figure bonus and would just burn all on stuff instead of saving or investing it. Was too stubborn to take one of those bonuses and pay down his mtg to do a refi and get the equity back to 20%. He probably would have gotten a 15-20% after tax return on his lump sum pay down if he had done that by going from a 7 to a 4 handle. Nope. Kept his jumbo rate from 07 until making minimum payments until the loan amortized down enough to do a refi last year.

  91. 3b says:

    Hold lots of those morons out there. A few listings in my town I have seen on the market asking what or slightly above what they paid in 2004!!

  92. The Great Pumpkin says:

    Got damn boomers…you people are sick.

    So let me get this straight, you sell at one price based on a set of market laws, then after sale, change the laws of market so that real estate gets hit to raise stock equity market through corporate give aways/subsidies to help market in your retirement. Got damn leeches!!

    And once again, these new buyers were not idiots. They needed a house and this is what the market was charging. It was either buy to save some money, or pay overpriced rents. So they did what the fundamentals of the market dictated to do, but you boomers got into office and changed the rules of the game because it suited you. Sick motherfu!kers!

    3b says:
    December 4, 2017 at 3:58 pm
    They did not have to pay they chose to pay. Fair play to the old deckers of the baby boomers generation you got these new idiots to pay. Now the new buyers may be hurt well it’s your own fault. You shouldn’t have paid and listened to l the b.s. hype that induced you to pay.

  93. Mike says:

    Low property tax towns in NJ will benefit.

    I can’t wait to see what happens to Montclair, although half the residents can probably afford their 30K taxes anyway and it wont really impact the market.

  94. The Great Pumpkin says:

    That’s the problem when you get a voting block as big as the boomers. Just reward themselves to no end at the cost of everyone else. They take away all the benefits of home ownership when they hit retirement….sick, just sick!

  95. The Great Pumpkin says:

    So had help paying their home off all their life, and then take that away when they go to retire.

  96. The Great Pumpkin says:

    And dream on of home prices dropping in lucrative locations. The rich have so much ammo, it will not impact pricing. Where it will impact pricing is in middle class towns. This extra cost will hurt the paycheck to paycheck crew.

  97. The Great Pumpkin says:

    And it’s designed that way. The elite don’t own middle class housing, so wtf do they care what happens. They only care about rentals and million dollar homes, both which will not be impacted by this tax law.

  98. 3b says:

    I did not change shite! Those old boomers asked and the young ones paid. End of story. There were other choices perhaps not the most ideal but they were available. And many of these silly people considered it a badge of honor and the right to brag!!!oh look at me look how much I paid and look how much my property taxes are!! I on the other hand fought the insane tax spending the out of control referendums to spend more money! So much so that it was starting to affect our kids in school. So I stopped and went dark. And everything negative in my town I said would happen has happened. So if people paid these prices all predicated on tax deductions then they are stupid. And the old geezers fleeced them many of whom were the same old geezers to said spend spend spend it will make my house worth more. Now without this tax deduction we are no longer bleeding wealth then are we!!

  99. The Great Pumpkin says:

    3b,

    For some, there was no choice but to buy. Why you can’t understand this is beyond me. They couldn’t wait any longer as they had a family to raise. It’s criminal to fleece people that had no choice but to buy.

  100. Hold my beer says:

    Pumpkin

    It’s all in the game yo

  101. 3b says:

    Cop yourself on prices will be impacted everywhere! For the Uber wealthy no. They buy mansions because they want to. And remember as you said 200k which is a top income in this state is not wealthy so yeah it will impact just about everywhere. Look who is crying the most about it on this blog!!!

  102. 3b says:

    They had choices they convinced themselves they didn’t. They let themselves be fleeced.

  103. The Great Pumpkin says:

    It won’t impact hosing prices in so called “nice towns.” These towns have way too much money to let a waived taxed deduction impact the price they will pay for a house.

  104. The Great Pumpkin says:

    And you are wrong about the choice part. Not everyone had a choice. It was their turn in the demographic spending pattern to step up to the plate and start purchasing homes. Unfortunately, it was the wrong time.

    Just an example…..Vancouver and Toronto housing bubbles have been going on for how long? The idiots that didn’t buy 10 years ago because” they knew it was a bubble” are eating it fuc!ing hard. And who knows if this bubble will even pop in their lifetime. So now they are priced out of their own cities, all because they didn’t buy. So always two sides to the coin.

  105. 3b says:

    Oh yes it will after all 200k is not wealthy in this area you said it yourself. And 200k is at the highest tier of income in the state.

  106. The Great Pumpkin says:

    Point is, our bubble could have kept going. You can’t always time the real estate market. Lots of profit or losses in investing are derived out of pure luck, whether we acknowledge it or not.

  107. The Great Pumpkin says:

    I agree to disagree with the housing prices going down in the nice towns. Your type claimed Montclair housing prices could never rise based on how high their taxes were…..and here we are with Montclair seeing one of the hottest markets in the state.

  108. The Great Pumpkin says:

    3b,

    You just don’t grasp the money that is out there. This is why I always laughed at the idea of 20,000 dollar property taxes forcing wealthy to move. I was speaking from perspective. If the taxes didn’t scare me away, how the hell would it impact people with a lot more money than myself. Won’t even make them flinch.

  109. 3b says:

    You are an inconsistent idiot. You are crying about the tax reform. You then claim 200k is not wealthy here only to be proved wrong! No surprise! Now you are back to saying it’s not an issue. It most certainly will be. You just can’t seem to grasp that wee fella. Now back to ignoring you.

  110. Fabius Maximus says:

    Same thing occurred with ObamaCare. Senate passed the bill with no votes to spare on Christmas Eve 2009

    The vote on Christmas Eve was for Cloture. Normally a rubber stamp procedural vote that the GOP used as a massive road block. It was a vote to close the debate after all the hearings, testimony and amendments. All those things that never happened with this Tax Bill. That is the difference here. There was debate, there was an attempt at compromise, but the GOP set themselves up as the party of NO. They could have asked for anything and they would have got it. Tort Reform would have gone through without a complaint.

    When they realized it was going through regardless, it was Lets Stop and start over. Fast forward 7 years when they had the chance to put up their healthcare plan they had nothing.

    So Left, NO, its not the same.

  111. Fabius Maximus says:

    Left

    People deserve what they get. Support this guy? You’d have to brain dead.

    Yet the other side support Moore.

  112. The Great Pumpkin says:

    I didn’t say it’s not an issue, I said it will not impact housing prices in the nice towns. Paying 10,000 dollars more to the federal govt will not impact the price I will pay for a home, but it will sure as hell piss me off to no end for raising my taxes that much in a single year. Imagine if the state of nj decided to raise my property taxes by 10,000 or more in a given year….I would raise hell, as would anyone else for the huge increase in a given year. So why would I not rage about this tax bill?

    It will impact housing, but not in the towns that you think it will.

  113. Fabius Maximus says:

    No clear…..my point is that people are mislead by a seeming benefit that is truly a smokescreen for institutionalized theft…….

    I agree, someone way back (maybe JJ) summed it up as “a hand j0b while emptying your wallet”

    Why pay the interest in the first place if you can just pay off the debt.

  114. Fabius Maximus says:

    3b

    Oh and Democrats secretly have no problem with this tax reform.

    Find me the democrat that is ok with 67% of this cut going to the top x%

  115. 3b says:

    Fab
    I said secretly as you noted and the answer is in your question. Which you already knew. But that’s just part of your charming obstinance!!

  116. 3b says:

    Is that in the nice towns where 200k income is not wealthy??!!! You are a fecking idiot!!

  117. Fabius Maximus says:

    3b

    “Where’s the Joy?” If it’s that the GOP own it and the Dems can run on it, I would say that the Dems had enough in the tank already to run on. Healthcare alone. Add in that outside of this T has been a legislative failure and all he has done is Executive orders that just rolled back good things like clean water.

    I would say that its hard to find anyone on either side that is happy how this Tax Bill went down. Anyone here standing up to defend the process?

  118. Fabius Maximus says:

    I’m going for Kaepernick for “Time Person of the Year!”

  119. 3b says:

    Fab I question none of that. I simply state the new tax law benefits the uber elite and they are the masters of both the democrats and republicans the rest is just for show to keep the little people at each other’s throats.

  120. Fabius Maximus says:

    3b

    No “Oh and Democrats secretly have no problem with this tax reform.” says that Dems are secretly OK with this bill.

    Do you mean Dems in Congress or Dems in the Real world?

  121. 3b says:

    Fans jeez !! The democrats in Congress they serve the same masters as the republicans in congress.

  122. Libturd sporting Tiger Wood says:

    “I’m going for Kaepernick for “Time Person of the Year!””

    I’m going with Odell Beckham Jr.’s football gesture.

    https://youtu.be/-F0Ic2OJ0v0

  123. leftwing says:

    Fabs, you got a two-fer. Wrong on facts and analysis. The processes were nearly identical, although separate, and the Dems really jammed one through unlike the Repubs although they paid for it in the end.

    Facts:
    Cloture for Obamacare was the night before, Dec 23. Passage was on Christmas Eve. That’s the correct timeline, look it up. Both had no votes to spare. Debate following cloture is limited to a maximum of 30 hours.

    The Tax Bill is governed under different but analogous procedure. After referral from Committee the Bill went to a predetermined debate time of 20 hours, the ‘vote-a-rama’ where amendments are offered, and it is then voted upon.

    Six of one, half a dozen of another….

    Analysis:

    What makes the Obamacare win so egregious (and I say that admiringly with deep respect for how the Senate Dems manipulated the legislative process) was that they did not have the Bill from the House as constitutionally required so they gutted an existing open veterans House bill and used that instead to move ObamaCare through the Senate.

    This was key to Obamacare’s passage because it meant Ocare passed the Senate before the January recess during which the Dem’s lost the Kennedy Massachusetts Senate seat and the final Senate vote they needed. That is why the House in January took the Senate Obamacare bill in total and passed it without changes. It was their only choice. Any re-vote would have died in the Senate in January with new Republican seated.

    I remember it well, the discussion at the time in December was whether the Repubs would appeal to the SCOTUS because of the way the Dems circumvented the constitutional legislative process.

    They decided against any appeal, and politicked hard on the way the Dems rammed OCare through. That was part of the reason a Repub won the special election for Kennedy’s seat (fundamentally amazing if you think about and a shocker at the time). As you know the whole OCare legislative fiasco contributed later in the year to largest losses for any party in a midterm election, with the Dems losing a whopping 63 House seats, its majority, and its filibuster proof Senate.

    All in all a push. Dems got Ocare through in a novel underhanded way but paid a huge political price for it which impact is still felt today with Repub majorities in Congress. In a way not only did the passage of Ocare give the Repubs a legislative playbook for passage of the Tax Bill, but basically Ocare made its passage possible by turning the House and State legislatures back to the Repubs.

  124. Fabius Maximus says:

    Sampling Grims Dark Rum for the first time. It was a long day.

    Overall, very nice, very fragrant, very drinkable. Downside is that its a bit light. I would say while technically a dark rum, but it doesn’t quite get there. Next batch, put me down for a Firkin, age it for a few years so its dark as my boot.

    Best distilling is always Pot Still! Maybe instead of the F150 you can you defer my taxes here? http://www.corsondistilling.com/stills/

  125. Libturd sporting Tiger Wood says:

    Drove by Xanadu today. Holy crap! Will they ever stop?

  126. Fabius Maximus says:

    3B
    Time to go back to tape. Scott Brown while a shocker, was not part of the OCare debate.
    https://www.politico.com/story/2010/01/reid-well-wait-on-brown-for-health-care-vote-031734
    And he was booted by MA in the next election.

    Why he won and lost is a separate discussion.

  127. Libturd sporting Tiger Wood says:

    I think the HUGE problem with the Affordable Care Act was that it was initially sold to America as a way to lower the cost of healthcare when in reality, it made healthcare more expensive for all except for those with preexisting conditions. So calling it affordable was a terrible lie. This is why the seats were lost.

  128. Juice Box says:

    re : Drove by Xanadu..

    Does it look like this yet?

    http://www.americandream.com/

  129. Libturd sporting Tiger Wood says:

    It’s getting a lot closer. It looks like they are building the world’s largest porte cochere.

  130. 3b says:

    I drove by Saturday looks exactly the same couple of cranes looks like nothing done. Financed through a Wisconsin entity to get its tax exempt status.

  131. 3b says:

    Fab I don’t why you enjoy engaging like this. So I will spill it out. If the democrats win the white house and both houses by 2020 and you somehow believe that they will change this tax reform back to what it was you are mistaken.

  132. chicagofinance says:

    left: always twisted; always on purpose; always dishonest……

    leftwing says:
    December 4, 2017 at 9:10 pm
    Fabs, you got a two-fer. Wrong on facts and analysis.

  133. Fabius Maximus says:

    Stu,

    There are many ways to look at that. Here is one view.

    ” In 2008, the average employer-sponsored family plan cost a total of $12,680, with employees footing $3,354 of the bill, according to Kaiser data. By 2016, the cost of the average employer family plan was up to $18,142 for the year, with workers picking up $5,277 of the tab.

    These increased costs for employers and employees alike may seem steep—up around 50% over the past eight years—but they could have risen far higher had the Affordable Care Act never passed. The Kaiser study shows that average family premiums rose 20% from 2011 to 2016. That rate of increase is actually much lower than the previous five years (up 31% from 2006 to 2011) and the five years before that (up 63% from 2001 to 2006).”

    From the Tax payer stand point.
    https://www.thebalance.com/cbo-report-obamacare-3305627

    For me Pre existing conditions was the one overriding positive of the bill.

  134. Fabius Maximus says:

    3b

    “So I will spill it out. If the democrats win the white house and both houses by 2020 and you somehow believe that they will change this tax reform back to what it was you are mistaken.”

    I’m not looking that far ahead. I’m not looking at even 2018. I am looking at what is in front on me. GOP with all three branches and what is being enacted.

    Clinton and the past is not relevant. What happens in elections future is not relevant. What is happening here and now is the ONLY thing that should be in focus.

  135. 3b says:

    Fab I give up I will ignore you as well as you have become insufferable. I said nothing of Clinton or the past simply stating my opinion that there are people who wish to identify as democrats who believe this tax reform bill will be rolled back in 2020 with the assumption that the democrats will control all three branches of government. I believe they will not. That is all I said. Period.

  136. Fabius Maximus says:

    3b

    While there may be some that subscribe to the :
    “assumption that the democrats will control all three branches of government.”

    I say that it as a pretty is big assumption and not one I will subscribe to.

    And my point on Clinton. I will not look back though many here will and will use Clinton as an excuse. The here, and the now is the only relevance.

  137. Libturd sporting Tiger Wood says:

    Clinton was not the excuse. Clinton was the reason.

  138. 3b says:

    Fab it was just a direct statement on my part nothing more nothing less. So once again if and when the democrats control Washington again they won’t be changing this tax reform assuming it passes back to what we have at this moment.

Comments are closed.