Little Enthusiasm for Efforts to Limit Tax Breaks on Mortgages
President Obama’s most recent budget proposal, from February, would decrease tax deductions for interest on mortgages, real estate taxes and charitable deductions for married couples earning over $250,000 and singles over $200,000.
The tax incentive to own a home began in the U.S. in 1913, at the time the federal income tax was first instituted. Since then, there have been many efforts to reduce or eliminate this deduction.
Naturally, organized real estate interests, such as the National Association of Realtors, as well as home builders and others, oppose this approach. They maintain that this will hurt the real estate industry, one of the hardest hit in the nation, at the very worst time.
It seems to me and many others, that whenever the tax benefit is diminished, the threshold is lowered for the next change. As an example, if the administration’s proposals are adopted, will the next adjustment, perhaps in several years, lower maximum earnings even more? Will the $1,000,000 maximum loan amount be reduced to $750,000? Each reduction creates the chance that this important benefit for all Americans will be actually eliminated in the future.
For further information, read the Wall Street Journal’s article, “Bid to Curb Mortgage Tax Break Falters.”