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Pres. Bush Rejects Recommended Mortgage Interest Deduction Limits
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Last November, in an article titled Official Tax Reform Panel Recommendations, I discussed how the Presidential Tax Reform Panel made a recommendation that included two proposals that would limit the mortgage interest tax break. The first proposal reduced the mortgage-interest cap from $1M to the average regional home price and the second converted the deduction itself to a tax credit of 15% of interest paid.
In a Q&A forum yesterday, President Bush said “I don’t think you have to worry about the mortgage deduction not being a part of the income-tax law.” Whew.
via CNN Money.
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I’m willing to let it go.
bush says many things
Well put Anonymous
Part of the problem here is perception. Removing the mortgage interest deduction keeps getting reported as a stand-alone change and as that, it would be very bad for many people. I know that it would personally be very bad for me as it is really my only deduction and I am already paying the govt $6000 even with it.
However, if this change were done with a bunch of other changes (overhauls really), it may not be that bad. I have seen a couple of articles that show how it could be a good change when done with some other changes. I think that everyone can agree that something needs to change with our tax system, but if everyone keeps screaming at how bad getting rid of the mortgage interest deduction would be, nothing will ever get done (although nothing will probably get done anyway as most elected officials can not afford to take a chance this big).
I agree with RS.
Getting rid of the mortgage deduction as part of a complete overhaul would be OK with me. Every deduction out there has a legion of rabid fans who will complain if it’s removed. But as a result the tax bill is far too complicated and it’s likely many of us overpay on our taxes simply because we aren’t aware of which deductions apply to us. I’d sacrifice my mortgage deduction in a second if it meant I could do my taxes on a 3×5 card.
Bush has stated that he’s wanted the tax changes to be revenue neutral so if the mortgage deduction were removed, you’d have to add something else in there that people could deduct – potentially making things more complicated.