Tax Reform - Limit of Mortgage Tax Deduction

A commission appointed by President Shrub have come up up with an alarming recommendation. They desire to restrict the tax tax deduction for mortgage interest!

Reform

Following his re-election, President Shrub put up an aggressive agenda in which he hoped to reform societal security and the tax codification amongst other things. As with many things in the political world, this sounded easier done than it really was. With societal security, political military units have got forced the President to draw back from private accounts. With tax reform, a similar political and practical error is being made.

Limited Deduction

The bipartizan tax reform commission appointed by President Shrub is making a messiness of things. They are proposing the elimination of the Option Minimum Tax, which is clearly a good thing. Unfortunately, they are also proposing a bounds on the tax tax tax deduction you can take for mortgage interests.

Although the concluding recommendations are not yet published, leaks have got led to the belief the tax reform commission is going to suggest the mortgage interest tax deduction be limited to the percentage of any loan that the Federal Soldier Housing Administration would write. Put another way, you would only be able to write-off interest on the first $315,000 of a mortgage! On top of this disaster, the commission is proposing to eliminate the tax deduction for property taxes.

Economic Disaster?

The execution of the above recommendations would be an economical catastrophe for the United States. The existent estate industry would endure incredibly and the existent estate roar would go a bust. In many parts of the country, a single household home averages well over $315,000. In San Diego, the average cost of a home is in the $600,000 range. To get into such as homes, many households apply for interest only loans to do ends meet. If they lose half of the interest deduction, default will not be far behind.

Once again, we are faced with a state of affairs where politicians just don’t get it. Our lodging market is incredibly strong and they desire to throw a twist in the process. Developers and homeowner associations have got vowed to struggle this “tax reform”. You should as well if losing one-half of your tax deduction problems you.