Email This Post Email This Post Print This Post Print This Post
Home » Business, News, Politics, Real Estate

Another fight brewing over the mortgage interest deduction

By: 13 April 2011 2 Comments

Just a few months ago, an effort to significantly reduce the mortgage interest deduction failed.

National Commission on Fiscal Responsibility and Reform — a task force put together by President Barack Obama — put together a report in furtherance of its mission to save $4 trillion over the next decade. In addition to tax increases, spending cuts and elimination of a lot of tax breaks was a suggestion to scale back the mortgage interest deduction. One of the proposals in that plan was a measure turning the mortgage interest deduction into a 12 percent credit available to all home owners, rather than the current deduction that is tied to income. The mortgage size was to be capped at $500,000 and interest on mortgages for second homes and on home equity loans wouldn’t be eligible.

The report didn’t receive the votes necessary to make it to Congress in December, thus nullifying the most immediate threat to the mortgage interest deduction. Obama, in a speech tonight, raised the possibility of cutting that deduction as part of an overall plan to raise an additional $1 trillion in tax revenue over the next 12 years.

It appears, then, the fight over the mortgage interest deduction was only over temporarily.

The coming discussion of the deduction comes at an opportune time for us at First Arkansas News. Why? This site turns one-year-old on Saturday (April 16) and we’re launching a bit of a project in conjunction with our first anniversary. Participating in the discussion of the mortgage interest deduction is a worthwhile endeavor and that’s exactly what we aim to do.

How? We’re going to ask a simple question and see what responses we get — is the mortgage interest deduction a product of sound public policy?

Rather that letting groups and individuals motivated by politics or self interests answer that question, we’re going to invite some neutral economists who will, hopefully, answer as logic dictates. Those invitations will be delivered by the weekend and we’ll run the answers from all those who have accepted them and have chosen to engage in that particular discussion.

When will we run those answers? That’s hard to say as no deadlines have been set — we’ll run a story when we’ve heard from all invitees who choose to discuss the mortgage interest deduction.

Stay tuned…

About: Ethan C. Nobles:
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.

2 Comments »

  • Nancy said:

    Sounds like too little too late. The mortgage interest deduction has been touted as a wonderful benefit of homeownership. Now that I am stuck in a mortgage for a home that is 50000 to 100000 underwater and I am a federal employee who you want to freeze the pay of for the next 5 years And increase my retirement deductions as a budget strategy, you want to add to my burden by eliminating this deduction. Where is the equity? I make more than 100000 but I bought a house within the ratios and am not eligible for most other benefits (student loan deductions or any of the loan mod programs) and have to pay more for most services like childcare which is based on a sliding scale. I have never been so poor. Instead of the steady financial progress i have made in my worklife over the last decades i feel like I am losing ground everyday. And yet at the same time you do not want to raise the taxes of folks earning over 250000. Further I chose to buy a house because of the benefit of the deduction but did not choose the price of the house. I chose a neighborhood that I wanted to live in. And because of the crazy escalating housing costs of the time I paid far more than I would have liked. However at the time given the quick pace of price increases I felt I would not be able to get a 3 bedroom house if I waited any longer as I was buying as high as I could afford.

Leave your response!

Add your comment below, or trackback from your own site. You can also subscribe to these comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

This is a Gravatar-enabled weblog. To get your own globally-recognized-avatar, please register at Gravatar.