I have a suggestion to improve on the flat tax proposals now being considered at the risk of becoming very unpopular among my middle-class peers.
Why should mortgage interest be a sacred cow? It is, in my opinion, one of the biggest welfare programs now in existence and it benefits mostly those who turn up their noses and vote against other welfare programs that benefit those who need it.
Let’s face it--only those who are relatively affluent can afford to buy homes at today’s prices and those of us who can’t and have to rent get no subsidy whatsoever from the federal government.
I do not think that the elimination of this subsidy would have an adverse effect on home building as the builders would just have to lower their prices to attract buyers instead of depending on a government subsidy to accomplish this end. (Yes the home mortgage interest deduction is just as much a subsidy as farm price supports or defense contracts.)
The elimination of this subsidy would allow the exemption for charitable contributions to remain in place and also leave the deduction for state and local taxes in place and still provide an increase in revenue with which to reduce the deficit, which would benefit all taxpayers and not just those who are affluent enough to buy $200,000 homes.
I shall now go out and hire a bodyguard because I will probably need one.