Mortgage interest deduction safe – for now
The sigh of relief (or consternation) you let out after Washington avoided driving the economy over a cliff by defaulting on the nation’s debt might have been a bit premature if you’re a homeowner.
The good news: The debt ceiling bill doesn’t mention housing, change real estate taxes or alter any federal housing programs.
The bad news: Some legislative ideas are like horror movie villains. Just because they look dead doesn’t mean they’re not going to jump up and try to stab you in the wallet one more time.
Having given themselves a few months to come up with spending cuts and more money, it's just a matter of time before someone on Capitol Hill suggests killing your mortgage interest deduction.
Proponents of axing the perk will argue that only rich people buy homes, so only rich people take the deduction and therefore we should get rid of it.
The truth is, 91% of the 38.5 million Americans who use the deduction have family incomes below $200,000.
As homeowners, we already pay 80% to 90% of all the federal income taxes. Take away our deduction, and that’s going to increase homeowners' share of the tax bill to 95%.
Don’t expect anyone to paint the issue accurately.
Even federal lawmakers aren’t stupid enough to admit that getting rid of this benefit would raise taxes on the middle class.
What about the poor people who don’t get to take advantage?
Does anyone actually believe the folks who take away your deduction are going to pass those dollars along to the poor?
This won’t make poor people any richer, but it sure will make us middle-class homeowners poorer.
Use the amortization table on our mortgage calculator to show you how much interest you'll pay on your mortgage over the lifetime of the loan.
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