Plan to Cut Mortgage Interest Deduction Stirs Opposition
Los Angeles Times, March 14, 2009
By Peter Y. Hong
...The National Assn. of Home Builders and the Mortgage Bankers Assn. were also quick to oppose the Obama proposal. The president's budget plan doesn't target the mortgage interest deduction directly; instead, it caps the rate of all itemized tax deductions for the wealthy. Under the budget plan, households now subject to 33% and 35% rates would be able to claim deductions only at a 28% rate. So for every $1,000 in deductions, a top-bracket household would save $280 in taxes, down from $350. Current law eliminates the deduction for mortgages of $1 million or more, and that limit would remain. If approved by Congress, the new rules would go into effect in 2011.
Richard Green, director of USC's Lusk Center for Real Estate, said the Obama proposal -- which he supports -- may well be "sort of the nose under the tent on the way to getting rid of the mortgage interest deduction entirely..."
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