Mortgage deduction safe, for now?
From SF Gate, “Is there really any chance that Congress could take away mortgage interest and state and local property and income tax deductions from homeowners? A presidentially appointed bipartisan commission is expected to urge precisely that on Tuesday, when it delivers its final report to the Bush administration.”
“The mortgage interest deduction — which allows write-offs on first and second loan amounts up to $1.1 million — would be scrapped and replaced with a 15 percent credit on sharply limited mortgage amounts. Deductions for state and local property and income taxes would be eliminated. The 15 percent credit would be for only mortgages up to a $300,000-$350,000 ceiling. Interest on home equity loans no longer would be tax deductible.”
“But let’s get real here: Nobody seriously believes that the president or Congress — all elected politicians — would do anything to reduce tax benefits for their largest and most potent constituency, right? Isn’t the mortgage interest deduction sacrosanct, politically untouchable, carved in marble on Capitol Hill? Ditto for write-offs of local property taxes and income taxes?”
“Can it become law? Not in an election year. Could some of it find its way into law someday, as the country grapples with budget deficits, war expenses and disaster relief reconstruction? That’s where the odds start looking slightly better.”
