Tag Archive for: fiscal cliff

Tracy Shaffer
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2013: YOUR PERSONAL WAKE-UP CALL

rsz_book_stack_2The dawn cracks, pouring indigo, gold and steaks of pink through my windows. I steal one more moment in the glorious dream as time floats and wafts and mingles with the smell of coffee. Suddenly the realization slaps me like a wet towel— GET UP!-and somewhat reluctantly I prepare to face, if not carpe, the diem. I’ve heard of those who rise in the darkness, bounding into their oatmeal and the day with a bright-eyed zest and a can-do attitude, and wondered… What’s with those guys?
The thing that brings us to our feet may vary but I’d bet the alarm clock isn’t the primary motivator. For some it’s routine obligation and the dubious joy which accompanies, for others it’s the spiritual practice of twisting yourself into a contemplative pretzel and for those crazy enough to do so, it’s the bristling thought of a five mile run on a freezing cold morning. Most of us find ourselves in a conflicted combination, making the bed and the best of it; we wake up, surrender our warm comforts and/or our sense of dread and heave those dogs onto the floor to hit the ground, if not the jogging trail, running.
The answer to your personal wake-up call may be private, but it is essential that you ask yourself the question.
The calendar turning the page on another year and we turn our collective thoughts to hope and new beginnings. “This year will be better” we tell ourselves as we create business plans and swear off the carbs, but what we’re really saying is “This is a good moment for me to DO better.” Doing better is most commonly connected to a personal vision of success, our proximity to it, and the perpetually moving goalpost. As a real estate agent working from home, the bells, alarms and time clocks that segment our days are set on silent scream. I set my own hours, create my own task list and my break room is often the laundry room, moving clothes from washer to dryer while negotiating the day via Bluetooth. No one will chastise me for being late or fire me for not showing up, but I don’t make money beating rugs the way I do beating the bushes. I muster some discipline, create order, time block and do that consistently for 325 days.
2013 starts today. Rather than welcome it with the lose-ten-pounds-double-my-sales-goals-and-be-nicer-to my-cat kind of resolutions, I look to the here and now before looking forward. How well do I really use my time? Not in some kind of crackpot, gotta get organized, type-A manifestation because I already do that, but if our lives are a string of moments, how many are pearls? I’m thinking I can do better, trim the fat, and slip in the right-brain stuff as I go along, rather than blocking out ‘creative time’ on my calendar. First let’s identify the fat. Pencils ready?
1. Write down all the things you’d like to do in 2013. (Go wild and without censor!)
2. Write down all the things you wanted to but didn’t do in 2012. (Go deeper.)
3. Breathe and wait until you get over feeling guilty for the length of #2.
4. Now… write down all of the things you did do that kept you from doing those things that you wanted to do in 2012.
5. Resolve to give up those things (or people). Think of it as freeing yourself up.
6. Do only what you want to this year, and I don’t mean playing Angry Birds— but do the things you know you want to do…right?
In other words STOP MESSING AROUND. (I tried to get this message to Congress but obviously they didn’t get it.)
Look at #1. Does it say “Dance with the Bolshoi Ballet?” (Why not?)
Now look at #2. Does it say take a dance class?
Hmmm. Is there anything on item number 4 that you’d gladly replace with Take a dance class… rearrange sock drawer, maybe?
If you go back to the top three items under each of the numbers, you’ll see what you want now and what you wanted when the year began. How close do they match? And then go to number 4 again and peruse the list of things you do to get what you want. I mean, that’s the list you’d make if you were going to make a list of things to do to get what you want, right? That’s what I thought.
The perception that there are doers in this world and do-nothings is just plain wrong. The do-nothings are doing something; maybe not what they should be but they are— playing computer solitaire for example, or playing the busy, busy, busy card. “I really want to work on my dreams, but who’s got the time?” because that card leaves you with lots of dreams and a very organized sock drawer. Time is not something you can manage like split ends, you’ve gotta give into it like a body surfer. How many times have you told yourself you’d do (or not do) something only to find you’re making the same to-do or not-to-do resolution for days, months, and years? This is where life slips away; in the space between the lines of lists made with good intention. Somewhere between the 2 a.m. worries and the 6 o’clock buzzer, your true motivation lies sleeping. The only way you’ll find it is to look for it. It’s probably hiding under what’s comfortable.
I’ve tried to resolve my way into world peace and my skinny jeans without much luck, and I couldn’t be any nicer to my cat, so this year I’ll keep it simple. Do more of what I really want to do and less of what I’m doing to avoid doing what I really want to do. Happy New Year.

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Tracy Shaffer
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The Mortgage Interest Deduction in Trouble?


How would it affect you if you could no longer write off the interest you pay on your mortgage?
According to panelists at Friday’s housing forum hosted by Zillow and the University of Southern California’s Lusk Center for Real Estate:

The burgeoning federal debt makes it unlikely that the mortgage interest tax deduction will survive in its present form. Of course, any proposed changes to the tax break for homeowners will spark a fierce debate over the fundamentals of the U.S. housing market, the value of home ownership, and consumer behavior.

“Fierce debate” he says? I’d call it a jobs-killer! But then again, I’m in real estate. Change is never easy, but when it hits our pocketbooks and the government, it really hits home. I advise my clients to educate themselves, talk to their tax professional and view the tax benefits icing on the cake. Knowing the long-term financial upside leaves them feeling good and more secure as they move forward with their biggest single purchase.

“I think it’s entirely likely that something big is going to happen (with the MID) starting next year with either administration,” said Jason Gold, director and senior fellow at the Washington, D.C.-based Progressive Policy Institute, an independent think tank.

A Congressional contingent advocates for the elimination of the mortgage interest deduction to help address the nation’s debt and budget deficit. Obviously things must be done to right the problem, but sticking it to a Middle Class whose beginning to feel the effects of a post-crisis housing market recovery seems a bit harsh. At the end of this year, a series of tax increases and spending cuts are scheduled to go into effect automatically unless Congress acts to prevent or alter them. Revamping the mortgage interest deduction is on the table as a way to head off that “fiscal cliff” scenario. (I wonder how many of those guys have a mortgage.)

Two years ago, a bipartisan deficit reduction commission recommended scaling back the mortgage interest deduction, which is currently capped at mortgages worth up to $1 million for both principal and second homes and home equity debt up to $100,000 and the deduction is only for taxpayers who itemize.
The Simpson-Bowles commission proposed turning the deduction into a 12 percent non-refundable tax credit available to all taxpayers, capping eligibility to mortgages worth up to $500,000, and eliminating the deduction on interest from second homes and home equity debt.

Though that seems more reasonable to me than the first idea, the National Association of Realtors has consistently defended the mortgage interest deduction in its current form.

Highly critical of the recommendation and claiming any changes to the MID could depreciate home prices by up to 15 percent, they are promising to “remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest.”

So… we’re back to whose going to pay down the debt? And how.

The MID is a “tax expenditure,” meaning its cost must either be made up through higher taxes elsewhere or by adding to the debt, and it costs the government about $90 billion a year. Richard Green, the director of the USC Lusk Center for Real Estate, told forum attendees that reforming the MID is necessary for fiscal sustainability. “We need to get revenue,” Green said. “You need to make a judgment about what’s better or worse for the economy. In my opinion, it’s better to do it with tax expenditures, rather than rates, though you may have to do both to get to where we need to be.”
Because mortgage interest rates are currently so low, he added, “This may be an opportunity to do less damage by reforming the mortgage interest deduction than at other times.”

(I wonder what cuts would make this guy feel the pinch.)
The mortgage interest deduction is particularly polarizing because of the disconnect between how people use it and how it is perceived. Green gave the example of Texas where most people do not itemize their taxes (only about 30% of taxpayers do) so they cannot take advantage of the MID. This line of thought perplexes me. So… if more Texans itemized their taxes it would make things fairer? or does he mean that if they actually knew they could they would, adding to the deficit? And haven’t Texans done enough of that? 😉
No matter how the chad falls in the next three weeks, watch for ongoing and loud debates over the Mortgage Interest Deduction. *covers ears*

Source: Inman News, Andrea V. Brambila, Monday October 15, 2012

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