Mortgage Interest Tax Deduction Might Be Eliminated
November 27th, 2012Via: New York Times:
A tax break that has long been untouchable could soon be in for some serious scrutiny.
Many home buyers deduct their mortgage interest when assessing their tax bill, a perk that has helped bolster the income of millions of families — and the broader housing market.
But as President Obama and Congress try to hash out a deal to reduce the budget deficit, the mortgage interest deduction will likely be part of the discussion.
Limits on a broad array of deductions could emerge in any budget deal. It is likely that any caps would be structured to aim at high-income households, and would diminish or end the mortgage tax break for many of those taxpayers.
Posted in Economy | Top Of Page
While I wish it were true I don’t think there’s a snowball’s chance this would actually happen. It’s just a threat to get the populace interested in the “fiscal cliff” circus.
The reality is that the mortgage interest deduction is an indirect bank subsidy. Banks can charge higher interest because people believe they’re getting a “rebate” from the interest deduction. Those of us who choose not to have a mortgage (the savers) subsidize those who max out their “home equity” to buy new cars. It’s all a part of the moral hazard economy.