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Time to ditch mortgage deduction?

Posted by Scott Van Voorhis  April 30, 2013 08:43 AM

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Never a profile in courage, Congress is at it again, wringing its hands over whether to ax or just simply pare back the deduction for home mortgage interest.

Still, let's have some sympathy here for our hard-working federal representatives.

After all, with so many deep-pocketed real estate industry groups lobbying against any change, there's a lot of potential campaign cash at stake!

OK, seriously, what really is so hard about this? It should be relatively easy to keep the deduction as a way of encouraging middle-class homeownership while also saving a few bucks.

After all, do we really need to be subsidizing million-dollar mansions and second homes?

Get rid of the deduction for second homes and scale it back for first homes to $500,000.

If you can afford to buy a million-dollar home or a vacation house, good for you.

But sitting here in the home office of my Natick fixer-upper, I don't really feel like paying for your luxury house and your vacation retreat. If you can afford the big house, you surely don't need Uncle Sam's help.

Just those two changes would save tens of billions - three-quarters tax dollars saved through the deduction go to those making more than $100,000 a year, BloombergBusinessweek reports.

Of course, the debate gets framed by the real estate lobbyists as an all or nothing proposition in hopes of scaring the wits out of middle-class homeowners for whom the deduction actually means something.

Time for me now to step down from the soapbox. OK, so what's your take?

This blog is not written or edited by Boston.com or the Boston Globe.
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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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