Middle Class Welfare: Mortgage Interest Deduction

[Total Refected Power]

There have been several thread about tax cuts or the preferable lack thereof the recent days. The rich, poor and corporations all have been criticized but the biggest white elephant for the middle class is the mortgage interest tax deduction.

This is a form of social engineering by the government to encourage home ownership and is the single biggest deduction for most middle class families. It is the one feature of the tax code that no one dares talks about. What about other interest payments? Car, credit cards, etc all are ineligible (although at one time was deductible). While home ownership is desirable and at an all time high, lets not forget that this deduction really gives a huge targeted tax cut to the middle class.

Lets see what would happen if the politicians touched this! It is as much a taboo as cutting Social Security.

 

[Dave]

This is one homeowner (and giver to church/charities) that would gladly accept elimination of almost all deductions in exchange for a lower, flat rate. Please, I just want simplicity!

The tax system is so damn complicated that I dread filling out my return, and mostly not because of the check that I have to write.

 

[Michael]

The problem with pulling the tax deduction for interest isn't the extra taxes, it is the effect it will have on house valuations. The interest deduction only really made a difference the first couple of years. Now it has close to zero effect on the affordability of houses because it just allows people to borrow more which pushed the price of houses up.

Michael

 

[Ornery]

I'd give it up too, for a flat tax. Nope, it won't happen. Social engineering all right. What was the point? Just to create fewer landlords or something? If people can't see any other benefit to owning their own home, why bother?