Kicking this back to the top. It’s news again. I wrote this post more than a year ago, but, per The Hill, the tax-deductibility of mortgage interest is back on the table:
The popular tax break for mortgage interest, once considered untouchable, is falling under the scrutiny of policymakers and economic experts seeking ways to close huge deficits.
Although Congress last year rejected the White House’s proposed cut to the amount wealthier taxpayers can deduct for home mortgage interest payments, the administration included it again in its 2010 budget — saying it could save $208 billion over the next decade.
And now that sentiment has turned against all the federal red ink — and cost-cutting is in vogue — Democrats on President Barack Obama’s financial commission are considering the wisdom of permanent tax breaks such as the mortgage deduction and corporate deferral. Calling them “tax entitlements,” senior Democratic lawmakers have argued they should be on the table for reform just like traditional entitlement programs Medicare, Social Security and Medicaid.
Nothing has changed in my response to this news, so let’s dial the wayback machine back to February 26, 2009:
The bay-trees in our country are all wither’d
And meteors fright the fixed stars of heaven;
The pale-faced moon looks bloody on the earth
And lean-look’d prophets whisper fearful change;
Rich men look sad and ruffians dance and leap,
The one in fear to lose what they enjoy,
The other to enjoy by rage and war:
These signs forerun the death or fall of kings.
— William Shakespeare, Richard II
I was out showing this afternoon and came home to find that President Barrack Obama has proposed giving the NAR’s cherished mortgage income tax deduction a very small haircut. From The Wall Street Journal:
The tax increases would raise an estimated $318 billion over 10 years by reducing the value of such longstanding deductions as mortgage interest and charitable contributions for people in the highest tax brackets. Households paying income taxes at the 33% and 35% rates can currently claim deductions at those rates. Under the Obama proposal, they could deduct only 28% of the value of those payments.
The changes would be phased in gradually over the Read more
