Mortgage Interest Deduction Faces Opposition

April 16, 2012

Tax Day is April 17, and many Chicago real estate owners are counting on the mortgage interest deduction as a saving grace in these tough economic times. However, some policy makers are waging a war to eliminate the deduction citing it as a tax loophole and a reward for the rich to buy more homes and take on more debt.

“The mortgage interest deduction has been in existence since the inception of the federal tax code nearly 100 years ago and is a cornerstone of U.S. tax and housing policy,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB).

Tax Day pictureSo what is the mortgage interest deduction? Basically, it enables homeowners to lower their tax bill by deducting interest on home mortgages from taxable income.

Critics argue that the real benefactors of the deduction are the wealthy who use it much more than middle- and lower-income households.

According to the Joint Committee on Taxation, more than 33 million families benefited from the mortgage interest deduction in 2010 resulting in savings of $83 billion.

Many homeowners, especially younger ones, rely on the deduction to help them get by as the economy tries to get its groove back. Without the deduction, homeowners would be faced with a plethora of problems including lower home values resulting in more upside-down mortgages leading to increased foreclosures, which only prolongs the housing recovery.

In a CBS poll taken last summer, nine out of 10 Americans opposed eliminating the deduction.

“Raising taxes on the nation’s home owners is clearly not the right answer to resolve our nation’s fiscal woes,” said Rutenberg. “Such an ill-advised action would devalue housing, lead to massive job losses and derail the fledgling economic recovery.”

How do our Chicagoland homeowners feel about the possibility of the mortgage interest deduction being eliminated? Please comment and let us know.

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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