USA Today: Few Take Advantage of Mortgage Interest Deductions

Thursday, 06 Dec 2012 07:51 AM

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
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.

Some 37 percent of taxpayers in Maryland utilize the popular deduction, the highest in the country, while only 15 percent in North Dakota and West Virginia do so, the lowest, USA Today reported.

Mortgage interest deductions have come under the microscope recently as Congress and the White House discuss ways to avoid the fiscal cliff, a one-two punch of tax hikes and spending cuts due to strike the economy at the end of the year.

Editor's Note: Make 2013 the Year You Pay Zero Taxes

Failure to steer the economy away from the cliff could push the country into a recession next year.

Democrats have championed raising taxes on wealthier Americans to help narrow deficits, while Republicans have said tax breaks should be extended for everyone though deductions should be capped.

Uncertainty abounds, but a compromise could mean change for mortgage interest deductions, which have a price tag to the Treasury of $108 billion a year.

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.

Experts wonder if the item encourages home ownership anyway these days.

“It does not subsidize homeownership,” Andrew Hansen, an associate professor of economics at Marquette University, told USA Today.

“It’s more valuable for people at the upper ends of the income distribution. They’re not at the margin between renting and buying. They’re between buying something and buying something bigger.”

Any move to touch the mortgage interest deduction, be it sweeping in nature or limited such as capping deductions for high-income homeowners, would face backlash from the real estate industry.

“Until Congress introduces specific legislation, there’s nothing to say about any proposed changes to the mortgage interest deduction,” Gary Thomas, president of the National Association of Realtors (NAR), told The New York Times recently.

“However, it has always been the NAR’s position that the mortgage interest deduction is vital to the stability of the American housing market and economy, and we will remain vigilant in opposing any future plan that modifies or excludes the deductibility of mortgage interest.”

Editor's Note: Make 2013 the Year You Pay Zero Taxes

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
You May Also Like
Around the Web
Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved