Time to kill the home mortgage deduction?
| March 03, 2009 |
Although the National Association of Homebuilders would scream at such a proposal, perhaps one of the best ways to end the home mortgage crisis and prevent another housing bubble would be to eliminate the federal income tax deduction on home mortgages. This New York Times reporter agrees.
The deduction encourages people to buy more house than they can afford, it’s blatantly regressive (you really have to have an expensive home to benefit much), and it pushes up prices. The now burst housing bubble was created by the government (or lack of government oversight of it’s own agencies). Perhaps the best solution is to get the government out of the business altogether.
When you sit down to do your taxes this year, do two versions. One with and one without the home mortgage deduction. You’ll probably find you’re not saving that much with the deduction. And unless your itemized deductions exceed $10,700 (as of last year) your mortgage deduction doesn’t mean anything anyway as the feds give you that much of a deduction regardless of whether you itemize or not.