I have been a Realtor since 1985 and a California homeowner since 1961. I am convinced that a majority of home buyers have considered their mortgage interest deduction as a federally sponsored incentive for homeownership.
Let’s consider limiting that deduction to $50,000 on a primary residence. This change would impact only those who can afford a mortgage that has an annual interest payment in excess of $50,000.
The Republicans who call for boosting tax revenue by closing loopholes rarely identify a single loophole they would like to close. The mortgage interest deduction is not a loophole; those are reserved for the very rich, the kind who stash money in foreign bank accounts.
Although I have benefited from the mortgage interest deduction, in my heart I have always known it is an unfair subsidy to homeowners. Renters get a paltry one-size-fits-all tax credit, while homeowners like me save thousands, inflating our homes’ values and in the big picture misallocating our economy’s capital.
I am all for eliminating the deduction over a 10-year phase-out period. It is simply the right thing to do.
I have not read any conversation that mentions the huge reduction in long-term home interest rates in the last two years. This would seem to have had a great impact on the mortgage payment, which could offset the modification of the deduction.