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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: J_F_Shepard who wrote (622894)	8/4/2011 10:05:39 PM
From: TimF	1 Recommendation Respond to of 1584598

If renters got the deduction, landlords wouldn't.... Only if you explicitly removed it from the landlords, which would be odd because it is a business expense (at least for corporate landlords) and we tax businesses on profits not top line revenue. Also why bother making that change? It would likely increase rents, without increasing what landlords get (they would get more pre-tax from the higher rents, but they would pay more in tax, so their bottom line would be about the same). The difference in terms of landlord profits, government revenue, renter net after-tax cost, and rental space availability would all be minimal if you shifted the tax break from landlords to renters while leaving it at the same size. There would be more renters and more up scale renters providing incentive for more up scale construction. The increase in pre-tax rental income would likely be taken up by the loss of the tax deduction for the landlord. You wouldn't get more renters because the pre-tax rents would be higher canceling the benefit of the tax deduction to the renter. Except in the short run (where markets might not have sorted everything out yet), it should matter little who gets the tax break in this case. Who effectively benefits from it depends on price elasticity in the rental market, not on which side of the transaction gets the tax break.