The mortgage interest deduction you claim on your taxes is under attack and has been since the days of the Reagan administration. This deduction allows homeowners to deduct the interest paid on their home mortgage loan from income tax. It also allows for the deduction of Property taxes on your home. There are many loopholes in this deduction that even cover things like boats and residential vehicles that function as homes.
This deduction is believed to cost the IRS nearly sixty three billion dollars in tax revenue every year. Lawmakers in Washington are greedy…especially the ones that come from Texas. This month the President’s Advisory Panel for Federal Tax Reform committed to eliminate the deduction if your mortgage is from $250,000 to $313,000. They also recommended eliminating the deduction for property taxes on your home.
Limiting the mortgage interest deduction would create much needed capital for the Treasury; the deficit has ballooned astronomically due the war, poor Medicare legislation, and natural disasters from Hurricanes in the Gulf. This recommendation would greatly hinder homeownership in America. It would mostly affect poorer Americans; this is par for the course of this President’s administration.
Another possible effect of this recommendation is a recession in the economy due to slowing of the housing and construction industry; which subsequently have been driving our economy for some time. This proposal might bring the red hot housing industry to a halt; this would seriously damage the overall economy. This proposal has been around since the 80s and has always meet strong opposition in Congress. Hopefully this President’s lame duck days will be here sooner than later.