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With job growth and the economy as central campaign themes, presidential candidate Mitt Romney and President Barack Obama are putting forth very different tax plans. Both could spell doom for some popular breaks, including the mortgage interest deduction.
Romney hasn’t provided all the specifics on his plan, but says it will reduce all individual income tax rates by 20 percent. The top individual rate would drop from 35 percent to 28 percent and the corporate rate from 35 percent to 25 percent, a move he says will unleash economic growth. The Tax Policy Center in Washington released a report yesterday saying the tax reductions will require eliminating some breaks. In 2015, according to the report, Romney would need to ax $320 billion in tax breaks, or 30 percent of the total, to pay for his plan.
Obama's plan includes raising taxes on incomes above $250,000. A bipartisan panel appointed by the president to recommend ways to reduce the national deficit suggested eliminating the mortgage deduction or reducing the limit from $1 million to $500,000.
Currently, individuals typically itemize if their deductions exceed the standard deduction of $5,800 for a single taxpayer, $11,600 for couples filing jointly, or $8,500 for head of household. According to a congressional report by the Joint Committee on Taxation, about half of U.S. households take advantage of the mortgage deduction. With its current limit of $1 million of the mortgage value, it overwhelmingly favors wealthy taxpayers. Most average taxpayers fall within the standard deduction amounts.
The Joint Committee on Taxation also reported that the mortgage deduction cost the U.S. $90 billion in revenue in 2010.
Do you believe that either Obama's or Romney's tax plan will help spur the economy and reduce the national deficit? Are you willing to possibly give up the mortgage deduction in exchange?
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What about eliminating $70,000 deductions for your fancy HORSE?
ALL elected officals should be replaced with 5th graders.
Yep, Let's put ourselves into a deep economic depression! The whole reason we got into the "Great Recession" was because house values dropped. What do you think will happen to house values when there is no tax advantage in owning a home?
the government exists for only 1 purpose, collection/confiscation of taxpayers money. The government has failed at every level to spend money wisely. They can not teach our children, protect our citizens from attack or maintain the infrastructure without gross waste. There is no motivation to control cost and prevent fraud and waste, when they need more money they simply raise taxes. When the government doesn't like what you eat they tax it, when you work hard and attain financial success they punish you by taking more of your money. Our idiot president even claims that there is NO individual success, that all success is due to the government role in our lives, that is a terrifying belief. The single biggest threat to the freedom in the US is the US government, no longer of the people or by the people, but in spite of the people. We will all one day be slaves to our government and their dependent mentality. I fear our government and elected official more than any other threat, including islamic extremists.
The more you send to DC. the more they spend. Remember in November.
DO NOT LISTEN TO WHAT THEY SAY, WATCH WHAT THEY DO...
What a crock this is. How about starting by closing tax loopholes, cutting foreign aid, and looking for ways to cut waste?
The mortgage interest deduction is the only "break" the middle class (homeowner) gets. They deserve this deduction! I agree with Bob-most of the government programs actually encourage laziness. I know-I worked in one of "those government programs" for years and witnessed the abuse of these programs that would anger and disgust most US taxpayers.
End mortgage deductions on all but primary homes and limit it to no more than twice the standard deduction. That would safeguard middleclass homeowners but increase overall tax revenue.
Instead of penalizing home owners by eliminating interest deductions, the government needs to stop wasting our tax dollars on programs which promote personal irresponsibility and encourage government dependance.
Whatever the fiscal or national economy ramifications, doing away with the mortgage interest deduction on a primary residence will cut to the core of our national culture. Americans expect the interest deduction and will feel undermined and cheated if it is taken away.