Do You Agree that the Mortgage Interest Tax Deduction Should be Eliminated?
As part of the budget proposal of President Obama, changes were suggested to the Mortgage Interest Tax Deduction. While this change only effects families earning over $250,000, it could be the first step towards the total elimination of one of the primary benefits of home ownership.
While the Mortgage Interest Tax Deduction was not targeted directly, the suggestion was that the rate of all itemized deductions for couples or families over the $250,000 ($200,000 for individuals) earning limit.
The National Association of Realtors claims enactment of this proposal will set off a new round of price depreciation, creating a new housing crisis. I'm not qualified to argue the merits of that claim, but I do know that it is considered one of the primary benefits of home ownership by our first time buyers.
Buyers cite the Mortgage Interest Tax Deduction as one of the reasons that it makes sense to buy instead of rent. Since first time buyers make up 43% of the homes sold in 2009, maybe we should be paying attention.
All homeowners have become reliant upon the tax deduction. Perhaps the government can figure out other ways to raise the taxes they need instead of concentrating on homeowners. They are already the ones targeted by local property and school taxes and even pay a sales tax when a property closes.
