Tuesday, December 7,2010 -Thomasville Times - 5
OPINION
Thomasville Times
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Scandalous suggestion
jrom debt commission
VIEWPOINT
LINDA CHAVEZ
Syndicated Columnist
As if the collapse in the
housing market had not done
enough damage to the US.
economy, the president’s debt
commission is now proposing
changes that could take the In
dustry off life support. Among
the recommendations in the
commission’s 65-page report is
one to eliminate the tax deduc
tion for mortgage interest on
homes over $500,000 (the cur
rent limit is $1 million) and re
strict it to primary residence
only The recommendation
would also eliminate interest
deductibility for home equity
loans (which are currently
capped at $100,000). The effect
of these changes would be
to immediately reduce the
value of aU homes by as much
as 15 percent. Here’s why
Homeowners currently are
allowed to take an itemized
deduction for the Interest they
pay on their home mortgages.
With conventional loans,
most of the payments in early
years go to pay interest on the
loan, with only a tiny fraction
going to principal. Although
most home purchasers may
not think of it this way, when
they buy the house under our
current tax system, they’ve
invested not only m a place
to live but also in buying an
asset. The value of that asset
win be determined by its
future appreciation — or in
recent years, its depreciation
— but also in the value of the
tax deduction they receive
on the mortgage Interest.
Under the current tax code,
' homeowners get a large tax
break. A family that pays
a $3,000 mortgage payment
each month wUl likely get
at least a $2,300 per month
deduction m the early years
of owning the home. Depend
ing on the individual’s tax
bracket, the deduction can
result m a signlflcant savings
in taxes owed. Of course! this
is why the debt commission
wants to take away this ben
efit. But to do so would have
unintended consequences.
namely lowering the current
value of home real estate.
As Carlos Bonilla wrote
recently for the American
Action Forum, a center-right
policy group, “Absent the
deduction we can expect
that housing prices wUl fall
by the present value of that
stream of tax savings that is
m force today” Homebuyers
don’t get the tax deduction
for nothing — they’ve actu
ally paid for it in the cost of ,
the house they purchased.
It has simply been capital
ized over the years they wUl
be paying their mortgage.
He estimates the present
value of those deductions on
a $625,000 home to be worth
more than $72,000 in today’s
dollars. Take away the de
duction, and the house is
now worth only $553,000. In
other words, we’ve reduced its
value by almost 12 percent.
This would result in an
enormous blow to the 60
percent of Americans who
presently own their homes.
We’ve already experienced
double-digit home value
declines in the past few years;
do we really want to see
them drop another 10-15
percent instantly because
of a change m tax policy?
There is also a fundamen
tal question of fairness. '
Individuals who purchased
homes under the assumption
that they could deduct inter
est up to $1 mUllon should
not now be told that because
the government can’t control
its own spending, the rules
have changed. What would
we think if a bank decided it
should retroactively change
Interest rates or increase the
principal on a loan because
it wasn’t making enough
money on its Investment?
Proposals to eliminate the
deductibility of home mort
gage Interest have been float
ing for years — the idea was
considered and dropped dur
ing President Reagan’s 1985
tax overhaul and has been
brought up periodically ever
since. But the only conditions
that would make any such pro
posal feasible would be a low,
flat tax in which aU deduc
tions were eliminated — and
even then, it would only make
sense when the real estate
market had fuUy recovered.
Linda Chavez is the author
of "An Unlikely Conservative:
The Transformation of an
Ex-Liberal. ” To find out more
about Linda Chavez, visit
the Creators Syndicate web
page at www.creators.com.
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‘Don’t ask, Don’t teU’ on way out
VIEWPOINT
DEBRA SAUNDERS
Syndicated Columnist
On Tuesday, Defense Secre
tary Robert Gates released a
long-awaited Pentagon work
ing-group report on the re
peal of the “don’t ask, don’t
teU” policy enacted under
President BUI Clinton. Most
troops, the review found,
would not object to a repeal.
Some troops made strong
arguments in favor of repeal.
As one service member
noted, “We need aU avaUable
men and women who are
wUling to serve their coimtry
no matter what their sexual
orientation is.” Another said,
“We shouldn’t turn people
away because of things they
do in their private life.”
One gay service mem
ber noted that a repeal
would “take a knife out
of my back.” Amen to
that. They have our back;
we should remove the
knife pointing at theirs.
Besides, I have to agree
with the gay service mem
ber who predicted, “If it
is repealed, everyone wiU
look around their spaces
to see if anyone speaks up.
They’U hear crickets for
a whUe. A few flamboyant
guys and tough girls wlU join
to rock the boat and make
a scene. Their actions and
bad choice? probably wiU
get them kicked out. After a
little time has gone by, then a
few of us wUl speak up. And
instead of a deluge of panic
and violence ... there’U be a
ripple on the water’s sur
face that dissipates quicker
than you can watch.”
That doesn’t mean that
there won’t be problems. As
Sen. John McCain, R-Ariz.,
noted during Thursday’s
Senate Armed Services Com
mittee hearing, the review
also found that 58 percent of
Marines in combat units and
48 percent of Army combat
troops feared that repealing
“don’t ask, don’t teU” would
have a negative or a very neg
ative impact on the ability of
their units to work together.
America is at war and Wash
ington has to address the
concerns of combat troops.
“Morale wins battles,” said
Joe Davis, spokesman for the
Veterans of Foreign Wars,
which opposes a repeal. Like
McCain, Davis objects to
the fact that the Pentagon
review never polled troops on
whether they wanted to end
the policy “I wish that the
question was asked point-
blank — repeal, yes or no.”
The Department of De
fense, for its part, is very
aware that civilians control
the military, not the other
way around. Hence, its resis
tance to poUing troops. But I
must pass on Davis’ observa
tion that although most civil
ians favor ending “don’t ask,
don’t tell,” most civilians
have not enlisted. “You’re
telling someone else what to
do, but you would never ever
consider joining the military
That’s pretty hypocritical
in my humble opinion,” he
said with military precision.
WhUe he understands
societal change, Davis
added, “The military is
about the team; repeal is
about the individual.”
Fair enough, but there
are practical reasons why
McCain, the VFW and others
who question the wisdom
of repeal might want to get
behind this document.
Two words: “judicial fiat.”
As Gates warned, either
Washington can repeal “don’t
ask, don’t teU” or the courts
can do it for Washington.
If the Ninth Circuit Court
of Appeals in San Francisco
decides the matter — in the
wake of a federal judge’s
nUing suspending the
policy — you probably can
kiss goodbye recommenda
tions designed to protect
troops who have religious
or moral objections to end
ing “don’t ask, don’t teU.”
The panel, for example,
understood that troops might
oppose repealing “don’t ask,
don’t tell” out of the fear that
it wUl be “only a matter of
time before the mUitary cen
sors the religious expression
of chaplains and marginaliz
es denominations that teach
what the Bible says about
homosexual behavior.” Hav
ing seen San Francisco pols
go after religious groups,
I understand that fear.
The report made clear that
a repeal should not try to
control how mUitary per
sonnel think: “In the event
of repeal, we cannot and
should not expect individual
Service members to change
their personal religious or
moral beliefs about homo
sexuality, but we do expect
every Service member to
treat aU others with dignity
and respect, consistent with
core values that already
exist in each Service.”
Treat everyone with re
spect. It’s common sense.
The working group also
recommended against creat
ing a “protected class” for
gays and lesbians. Aubrey
Sarvis of the pro-repeal
group, Servicemembers
Legal Defense Network,
told me he is on board with
that language. We’re “not
seeking any special privi
leges,” he said. “AU they’re
asking is to be who they are
without losing their jobs.”
Republicans have resisted
aUowing a vote in the lame-
duck Congress. As Sarvis
admitted, “It’s no secret, one
of the reasons we’re push
ing for the lame-duck, it’s
only going to get tougher
in the new Congress.”
But if repeal faUs, Sarvis
promised, “We wUl continue
with our aUies.” And then he
mentioned the Ninth US. Cir
cuit Court of Appeals, which
wUl rule on a September de
cision by US. District Judge
Virginia PhUlips of River
side, Calif., that found the
policy to be unconstitutional.
Everyone knows that “don’t
ask, don’t tell" eventually will
be repealed. It’s only a matter
of time. So the question is:
Will it be repealed by people
who care about the military
and the rights of dissent
ers, or will it be repealed by
an arrogant judge with a
political agenda? That is the
choice before the Senate.
E-mail'Debra J. Saunders at
dsautiders@sfchronicle. com.
To find out more about Debra
J. Saunders, and read features
by other Creators Syndicate
writers and cartoonists, visit
the Creators Syndicate Web
page at www.creators.com.
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