The mortgage interest for homeowners is falling under the scrutiny of policymakers and economic experts seeking ways to close huge deficits. The new spotlight on the mortgage deduction and other tax expenditures comes as the National Commission on Fiscal Responsibility and Reform, a bi-partisan panel appointed by President Obama, seek ways to reduce the nation’s ballooning debt. MHI is part of a broad business coalition that opposes changing the current Home Mortgage Interest Deduction.
Each year, an estimated 40 million Americans claim the mortgage interest tax deduction. The Congressional Joint Committee on Taxation estimates that between 2009 and 2013, this deduction will allow about $600 billion in potential tax revenue to stay in homeowners’ bank accounts instead of going to the U.S. Treasury. In 2009, the tax break was worth over $80 billion to homeowners, about two percent of all federal spending.
The consequences of such an approach to deficit reduction would be devastating for home owners, the housing market and the nation’s economy. Staff will continue to monitor this issue and keep members apprised of any new developments.