DEBATEitOUT.comDebate online with people!

Since pets are OWNED, like cars, homes, boats, and RVs, you should get a tax break for all those too. But since we do not get tax breaks for owning homes, cars, boats or RVs, then we should not get a tax break for owning pets.

I'd love a tax break for my pet. Not that I think less of my pet for requiring care, but owning an animal is an big decision, and a big commitment. I can't exactly see how it would work, and unfortunately you'd immediately have people adopting large numbers of pets specifically for tax breaks, and then poorly caring for them since they are merely of monetary gain to them.

Dogs yes, cats no. My justification is that I'm an open bigot against feline kind.

Some cat lover is going to take you way too seriously if this debate actually takes off! I can't wait to see who it is!

Curious… you do get tax breaks and tax advantages for owning a home and certain kinds of cars… unless I missed something.

Even snopes agrees with me:
http://message.snopes.com/showthread.php?t=11285

No, you do not!

Homeowners pay something called PROPERTY TAX to their local county tax assessor, and you also have a SALES TAX when you make the deal to buy that home. When you purchase a car, you pay SALES TAX on the purchase price, then you pay your state a LICENSE TAX (which most states like to call a fee), and you have to pay that one each and every year. You also pay a federal GAS TAX for each and every gallon of gas you put in that car, and most states also add a GAS TAX. Also on each and every homeowners property tax bill there are added taxes for school districts, fire districts, and road maintenance and improvements.

That is only a small fraction of that "SOMETHING" that you seem to have missed.

Snopes is owned and operated by two people who just post their personal opinion and do not research anything.

So much for snopes credibility.

Oh, and BTW – I just happen to be a dog person. Cats, to me and my German Sheppards, are nothing but dog food on the run . . . B)

You get assessed those taxes if you rent the property as well as if you own it, it is simply invisible to the lease holder. So I'm indifferent to that problem. Buying gasoline and paying tax on it has very little to do with whether or not you own a car in actual fact. They are related products, for now, but that's a side point unrelated to what I was actually speaking on…

What I was referring to is that the federal government gives you a tax credit that is intended to offset many of those taxes (other than sales tax), particularly if you own a home or buy certain types of vehicles, not to mention things like business use deductions for a vehicle which would offset some of the gasoline tax expense, etc. Perhaps you should try looking at your tax deductions when you fill out your tax forms next time. You might be overpaying by the sound of it.

If you just want to complain about the fact that there are taxes on everything, fine too. But that's not the actual point you appeared to be trying to bring up. On which you were in fact wrong. Owning a home (through the mortgage interest deduction) does give you tax breaks, not to mention a potential source of tax free income if you sell at a gain or loan against it later to draw income from it as a nest egg. It even a tax deduction if it depreciates in value as a capital asset.

Well, excuuuuuuuuse me!

Some of us "retired" folks set up our retirement to not pay any bills, like mortgage payments and auto loan payments. FYI – if you pay cash for your home or car, there are NO – let me repeat that – NO "incentives" in the form of any deductions. You only get those things if you are dumb enough to pay out all that interest on the loans – and that amounts to a heckuva lot more than any so-called tax break.

And since you are so intelligent – that is not an insult – have you ever figured out exactly how many times you buy a house on a 30yr fixed mortgage if you make all your payments until it is paid off? Figure the same thing with an auto loan.

I learned that little trick from my Father-in-law who was an executive with Wells Fargo & Co for almost fifty years. He convinced me to save up my money and buy things for cash.

Let me know how that tax break thing works out after you find out how much you lose in all those interest payments, will you?

Saving up and buying a house completely in cash is impossible in 2010 PapaDawg. I applaud you for being able to buy a house in the mid 70's completely in cash. Today, I can buy that same house, in the condition it would be in had you done nothing to it these past 35 years, for 10 times the price you paid for it. And if I save and scrimp and throw my money away on a rental, I can buy that house outright at about 70 years old and have no energy left to make it livable. I'm sorry PD but your opinion on how the youth of today should house themselves is outdated and unattainable.

The tax break actually means you spend less money if you buy it over 30 years (including the interest payments) than if you buy a house in cash. This is because paying cash includes high opportunity costs that you could have used the money for instead of purchasing a high cost financial item like a piece of property.

It's called an arbitrage. Look it up. It feels better psychologically to have the house paid off, but in practice, only within very specific conditions are you significantly financially better off (because of the tax breaks) to pay for a house in cash. Basically you have to be so uberrich that it doesn't matter or the property has to be worth more than the maximum deductions anyway (again, uberrich). Ideally if you're retiring, you've got money set aside and it makes no sense to spend it all on a house. Bills or no. Car loans are different because there are no tax deductions for the interest to offset some of the cost and the time scale to pay them off is usually much lower, meaning you don't get the full power and benefit of inflated dollars to use on a fixed payment. There the only benefit are tax credits for the purchase of qualified vehicles, usually fuel efficient hybrids or alternative fuels. But these are still tax breaks that can be used to offset tax that you owe. You're also forgetting that how tax deductions work is they come off the top of your income, potentially lowering your income bracket on earned income. If you're retired and have mostly tax free income that you're drawing down on (not true of many people on 401ks, but true of some in our generation with Roth accounts), then you're basically offsetting any taxable income that you have by having a single bill. Essentially means that you can live at higher means or leave more money earning income somewhere rather than sitting in a house doing nothing.

Since this is what I do for a living is financial planning, I'd have to say that yes, I have done this, many, many, many times. You obviously have not thought through all of the financial implications of a single decision. The conventional wisdom of paying off a house, particularly all at once, is usually flawed. The bank makes more money off the house purchase if you do that way than you will. Same with a 15 year mortgage.

i think you are talking about the average middle class american living in a more modern house. I mean what if your Bill Gates?

My currant home I purchased in `06 – CASH. My truck in `01 – CASH. My SUV in Y2K – CASH. My 5th wheel in `01 – cash. My boat in `04 – CASH. I park them all in a 40ftX60ft 16ft tall steel building that I paid CASH for when purchased and constructed.

THAT is what we – my wife and I – saved up for during all our married life. It is called RETIREMENT PLANNING. Set your goal and do not waiver from it!

If I can do it, anyone can! (this year we celebrated our 41st wedding anniversary)

"The tax break actually means you spend less money if you buy it over 30 years (including the interest payments) than if you buy a house in cash. "

How wrong you are my friend . . . .

At todays low interest rates on home mortgages you will actually pay for your house THREE TIMES . . . Let me repeat that for you – THREE TIMES!!!!!!

The only way you could possibly make out with a so-called tax break is if the government PAID YOU enough money to cover the other two prices of the house that you actually pay in interest during the entire life of the mortgage. DO THE MATH!

One other thing . . . Mortgage companies are in business to MAKE money. The government, BEFORE it can GIVE YOU ANYTHING, has to TAKE IT FROM SOMEONE ELSE!

There is NO SUCH THING AS A TAX BREAK . . . Government – even ours as it is now – IS IN THE BUSINESS OF TAKING EVERYTHING IT CAN. And that my friends includes YOUR MONEY! If you believe anything other than that, then you get everything you deserve.

Politicians LIE. Just like lawyers. They will tell you anything to get elected then do whatever they please once in office.

Believe what you will.

I did the math. You didn't. I said I do this for a living. I'm not an idiot that somehow overlooked something, I know what I'm talking about here. This is Econ 101 stuff applied to a financial decision.

There's a big thing up there called an arbitrage, opportunity costs, that you forgot a step on. The house actually, in real dollars, costs essentially the same whether you pay cash for it, pay 20% down and pay 30 years or pay 15 years over the same time frame. It costs less immediately if you pay cash, but you're surrendering hundreds of thousands of dollars in potential gains by having money just sitting in a property that you can't make money off of (unless it gains in value and you sell it, meaning you have to start all over again with the whole debate of mortgages).

The only difference in price is that the longer it takes you to pay for it, the less you pay in taxes. If you take away the tax break, sure, your way works better, and I've got no problem getting rid of the housing market distortions that the HMI deduction brings into play. 30 year mortgages have been around for a long, long, long time, but I guarantee you they are generally cheaper for you than sticking all the money in up front both because of a tax break and because inflation works for you instead of against you when you do it this way. Inflated dollars, the dollars you use to pay down the mortgage over time, are worth less than dollars right now. Hence it costs less than you think it does. Depending on the inflation rate, possibly a lot less.

You're also risking a lot more if you do put it in all at once. True someone in retirement isn't likely to want or need to move and hence risk losing the money right away without time to make it back up if the house loses value… but someone my age is. Probably even someone in their 40s or 50s is.

What does that have to do with my point? As I said, feel free to complain that you are being taxed or overtaxed, but if you're getting tax deductions, you use the things to your advantage. Work the system as it is. It's not going anywhere because very little is changing by flushing out the garbage in the system. I can promise you that.

Given that you and I have a similar view of politicians, I can't say I'm surprised this is your attitude on most things. But I'm confused why you don't have a similar scepticism to other public figures or to specific politically active ones. You should be mistrustful of all political sources of information if this is your position, including those who say things you want to hear.

Tiberivs point was not so much dealing with how retired people should amass and use their assets (mine is, to a degree, at least dealing with housing, where you display a common "wisdom" which turns out to be in economic terms, wrong). His point was that it is unreasonable to assume that people should pay cash for their homes or cars all throughout their lives (and I'm with you on the cars and boats or whatnot, try to pay cash as much as possible).

In fact, it's almost impossible that almost anyone will be able to do this. Hence you need to make an accounting of how people who are not retired should live rather than blithely insist that they simply do what you did right now, as they are just making their way in life or as they are raising children, etc.

Very succinct, that is indeed my point.