Another fight brewing over the mortgage interest deduction
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.
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.