Talk by government leaders in Washington about eliminating the home mortgage interest deduction is “just plain foolish” and would imperil a housing recovery, according to economic and political commentator Ben Stein.
“Look, we are just barely limping off the bottom of a residential housing catastrophe, and home buying and building are finally, after a genuine nightmare, reviving,” Stein said in a report for CBS News.
“If we could get housing roaring back, that would go a long way towards full recovery for our economy. Obviously, taking away the home mortgage interest deduction is the very last thing the housing market needs,” he said.
Editor's Note: How to Pay Zero Taxes . . . Legally
Stein said the idea of eliminating the mortgage interest deduction is apparently an alternative to raising taxes on the wealthy as a way to increase government revenues.
“Do we want to clobber housing, hurting millions of homebuyers, builders, construction workers and timber people? Or tax the people who have two Cadillacs and a Bentley?” Stein asked.
“How can this even be an open question?”
The National Association of Home Builders is coordinating with nonprofits and other groups in an effort to save tax breaks for itemized deductions such as charitable giving and mortgage interest, according to The Hill.
But Peter Orszag, formerly Obama’s chief budget adviser, said studies suggest the mortgage interest deduction appears to do more to raise home prices than it does to encourage new owners to buy.
About a quarter of U.S. tax filers who can deduct mortgage interest expense from their taxes each year do so, a USA Today analysis of IRS data finds.
The deduction is available only to those who itemize deductions, which makes it popular mainly for wealthier people whose total deductions — for mortgage interest, charitable giving and other expenses — outweigh what they would otherwise pay under a standard deduction.
Editor's Note: How to Pay Zero Taxes . . . Legally
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