You may have heard that a national commission (or, as it is really called, the “advisory panel on tax reform”) has recommended trimming the federal tax home mortgage loan deduction (as well as eliminate state and local tax deductions from income).
The New York Times has a very good article, explaining the details.
The people over at brownstoner.com also address the issue, from the point of view of someone not at all happy with the idea (his blog entry is titled, “George Bush Wants My Family To Be Homeless“).
Most analysts think the suggestion will go nowhere, seeing as just about anyone involved in the issue (homeowners, developers, real estate companies, banks) will be against it. At the very least, the issue won’t go anywhere until after the 2006 elections, according to most people.
My personal take? I don’t like the funny stuff they’ve suggested (having different deductions possible based on where you live, for example). I like the simplicity of how it is now (put your interest on your Schedule A, lower your tax owed, await your tax refund in four-to-six weeks).
I’m all for a reasonable and fair tax code, however, and, truly, no one can say that the loan interest deduction isn’t a great big gift to taxpayers. I would support a decrease in tax deductibilty. Of course, I would much prefer if this change was in tandem with other changes to the tax code, but my fear is that nothing will come from any of the proposals.
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Updated: January 2018
