Support or oppose change to mortgage deduction?

The once sacred mortgage interest deduction may be on the chopping block.

Earlier this month, the leaders of the deficit reduction commission floated the idea of cutting the deduction for homeowners who have mortgages over $500,000, AJC reporter Michelle Shaw writes.

The plan doesn’t mean those homeowners would lose their deduction, Shaw explains. But it would be limited. Homeowners could deduct only interest paid on the first $500,000 of their mortgage.

Of course, the proposal could change and include more or less of a mortgage.

What do you think of the idea? Is it a good way to tackle the deficit?

What would you be willing to give up to reduce the trillions of dollars in red ink?

- Henry Unger, The Biz Beat

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84 comments Add your comment

Road Scholar

November 19th, 2010
6:52 am

While it is easy to say that the mortgage deduction should be ended, what is the effect to the economy? How will it affect the home building and real estate market? Since our economy is based on growth, i expect it to be detrimental. Besides, theire are many other dductions that can be eliminated.


November 19th, 2010
7:13 am

If there has ever been a time to seriously consider the ‘Flat Tax’ it is now!

J. L. Pickard

November 19th, 2010
8:11 am

Support. It’s a great idea. People who own houses worth more than $500k (mansions and mini-mansions) do not need the deduction.

Unfortunately, our Republican friends will say it discriminates against the wealthy or call it a tax on the rich. Thus, the idea will likely suffer the same fate as a snowball in the Sahara desert.

Buckhead Dawg

November 19th, 2010
8:52 am

We needs that deduction and the rest of the government subsidies to the real estate industry. Else how will all the rich real estate guys get money to fund their political ambitions?

Wake Up

November 19th, 2010
9:04 am

When are folks going to get it through their thick skulls and pea sized brains that you can keep robbing from the rich to give to the poor. Why is there an assault on the Rich just because you are not! There is also a deeply flawed view on who in this country is considered “Rich”. This will do NOTHING to help the middle class, it will just line the pockets of the plethora of entitlement programs and encourage more bad behavior.

The flat / Fair tax needs to be looked into.

J. L. Pickard

November 19th, 2010
9:48 am

Does anyone really believe that owners of $500k and million-dollar homes are not rich? If the removal of the mortgage interest deduction would burden these folks, they should consider finding more affordable housing. The public (taxpayers) should not continue to *subsidize* extravagent living of the wealthy.

I agree with “Wake Up” that there is flawed view on who in this country is considered rich. I would encourage everyone to consider how the American standard of living compares with the rest of the world. In which case, about 99.9% of Americans are rich. We are blessed by God beyond imagination. Or compare our standard of living with that of previous generations. Unless you’re willing to stop subidizing the lifestyle of the wealthy, there’s no room to complain about the deficit.

Editor In Chief

November 19th, 2010
11:19 am

“Unless you’re willing to stop subidizing the lifestyle of the wealthy, there’s no room to complain about the deficit.”

The deficit was not caused by the “Rich”, so why should they have to continue to pay for it?

Everytime the governement needs money, it turns to the “Rich” and starts taking away more. When is it going to stop? The “Rich” already pay a disportionate amount of taxes.

Those who continue to receive money in the way of entitlements are the largest “causes” of the deficit. Fix that problem along with immigration and much of our county’s debt would be sharply curtailed. So the statement above should read, “unless your willing to stop subsidising the lifestyle of the entitlement class, there is no room to complain about the deficit”.

Who Cares?

November 19th, 2010
11:43 am

This is not only for the rich, but anyone who has the stability in their life to committ to the responsibilities of home ownership. Sorry, but the deduction should remain for the homeowners. There are other ways to generate tax dollars to take care of the lazy and uncommitted population. It’s kind of like expecting a lavish retirement when you haven’t committed to being employed with a company long enough to be vested in their retirement plan or not contributing to a 401k plan. You don’t get something for nothing folks! For those of us who have worked to save and make our payments on our property, it’s our reward. For those too lazy to work and save, don’t sponge off of those who have. Now, go to work and save your money. Make yourself successful, don’t pull yourself by pulling others down!


November 19th, 2010
12:07 pm

It may or it may not. It encourages home ownership, plain and simple. Obama AND Biden take more of a deduction than most of us make. But I agree with several others here, it’s a great time to scrap the entire system for something simpler and less costly to comply with. We’re wasting about a half trillion just coping with the current monstrosity.

I’d accept an adjustment to the SS COLA and be willing to pay more in Medicare co-pays and deductibles


November 19th, 2010
12:40 pm

Support, BUT!

Why are we nibbling at the edges of a huge problem. Revenue derived from this proposal won’t solve anything. It makes an already convoluted IRS even more complicated. This hedge on a sacred tax deduction just paves the way for a progression of lower qualifying caps until all mortgage deductions are eliminated. We need to start over.

First we need an airtight spending reduction plan alongside a revenue generation plan. It must be quantifiable and include strict reporting requirements over time.

If we can harness federal debt, your children and grandchildren will call us the second “Greatest Generation”.

Scott M

November 19th, 2010
1:23 pm

Against. Sort of.

See this idea of limiting the mortgage deduction shouldn’t be flat across states as the values of homes are not that way. Home values vary wildly and, where I live, in the San Francisco Bay Area… all homes are priced very high. I mean everything! So if that $500K number was used here ONLY the rich could by $500k plus homes… the middle class (which I’m firmly a member of) would never have a shot. Are the houses in California overpriced? Absolutely! But this plan should compensate for areas like that. Make it a percentage of the mean price of homes where the cutoff is. Something like that. My $0.02.

Oh and the arguments of “don’t rob the rich” etc are silly. They should be behind this as it is an investment in the one resource they have… money. See as the deficit grows so will inflation… so by paying down the debt in this country they will actually have more as the money they do have will be worth more! This is the reason I’m also not opposed to raising MY taxes. And eventually, like it or not, all of us will have that happen.

Although, in full disclosure I think though deficit reduction is an idea worthy of praise, we are too late. That’s something that occurred in the Clinton presidency that should have been continued by the Bush administration. Now we are in a terrible contraction that either thing will end up being non-productive. Reducing the deficit will remove dollars (though inflated they might be) from the economy. And slashing entitlements will create an unplanned burden on the states. I think we are going to have to ride this one out, to be honest. And there isn’t a politician that will tell you this is the case. But mark my words, it is.


November 19th, 2010
1:31 pm

If we had the Fair Tax in place, we would not be having this discussion.

UGA guy

November 19th, 2010
1:35 pm

Everybody wants to get to heaven but nobody wants to die!

Every time we get a reasonable proposal to help fix our skyrocketing fiscal problems, it gets shot down. A vast majority of Americans understand that we need fix these long term challenges and they want our leaders to do something about it! However, that same majority is against 100% of any substantive measure to fix it!

We all agree that the tax code is crazy and needs to be simplified (just don’t do away with my exemption)! We all want a strong national defense (just don’t tax me to pay for it, charge the next generation)! Social Security and Medicare are going broke but we scream at our politicians not to raise the retirement age (despite the fact that many of us are living upwards of one third of our adulthood in retirement)!

We are all like a bunch of adolescents and we are about to get what we deserve.


November 19th, 2010
1:39 pm

I WOULD give up Obama’s wasteful spending.

Are You Kidding Me

November 19th, 2010
1:46 pm

“Editor in Chief”
“The deficit was not caused by the “Rich”, so why should they have to continue to pay for it?”

I guess you argument with this is that most of the politician’s in congress and the white house are not “Rich.” Even though there is an exception to every rule government is run by the “Rich”


“The “Rich” already pay a disportionate amount of taxes.”

If this was true then why is it every year Warren Buffet says that he pays a lower percentage in taxes than his secretary? I guess if your right then his secretary makes more than he does.

I support cuts a lot of the cuts recommended by the panel. They suck but the debt has to be paid down and I would rather it get paid now rather than later. Them wanting to raise retirement age to 69 by 2075 the medical care will be better and people living longer by then. Probably not a big deal. As for dropping these tax cuts for people with houses over $500k, it probably should be adjusted for each area you live in but in all reality if you buy a $500k house your not poor. I come from a family that has never grossed over $70 in any given year. We need the tax breaks and tax deduction more than someone making $200k or $250k a year I don’t care where you live. Lastly yes our tax system sucks and needs to be replaced entirely.


November 19th, 2010
1:49 pm

I say drop EVERY SINGLE DEDUCTION. Make EVERYONE pay 10% tax on their income. Get away from the class warfare, etc.
If you make $10million, you pay $1million
If you make $100, you pay $10


November 19th, 2010
1:51 pm

Also, put a CAP on GOVERNMENT spending. If we don’t have the money, don’t spend it.
I would love to have my basement finished, but I do not have the cash and I will not borrow it. Make the government do the same.

Piggy Bank

November 19th, 2010
1:59 pm

Nothing, it’s a spending problem. Plenty of money coming in without trying to hack more out of us poor tax payers. Stop all the foolish spending cut into the trillon that way. Our tax burden is way to high now anyway, if this keeps up I am just going to quit working.


November 19th, 2010
2:15 pm

Eliminate all deductions and come up with more realistic tax brackets…and more of them.


November 19th, 2010
2:16 pm

If one can afford a half million dollar mortgage one can afford NOT to get a tax deduction on the interest. Let the CPAs of those mortgage owners look for the loopholes just like before!


November 19th, 2010
2:19 pm

Taking away the mortgage interest deduction would effect all home owners and would be home owners, not only those with expensive homes. Many home buyers calculate this deduction into the cost of ownership. With many homes waiting for owners, it sounds like a path to slowing the housing market just when it looks like it might recover.


November 19th, 2010
2:20 pm

We are heading toward Socialism from what I can tell.


November 19th, 2010
2:43 pm

I think if you take away the mortgage deduction, their also needs a radical change on how your mortgage is figured, you should pay more to the principle than is now calculated, kinda like a simple interest loan, and you shouldn’t be paying twice the amount for what you payed for it, It wuld probably hurt the housing industry at first, but It would seem to drive people to homes they can afford also


November 19th, 2010
2:48 pm

Lousy idea. Just try this, and see what happens. I hope they do it, like now, in the lame duck session. Democrats will get crushed in the next election like the grits I eat for breakfast.

I would not be directly affected by limiting the mortgage deduction, but EVERYONE would be indirectly affected, and it would be ugly. The policy uncertainty the Feds are creating in our economy and in specific markets is choking this nation.

Get the Feds out of our pockets, out of our pants, and off our backs in general. Out. Completely.

When they go after my 401k money . . .


November 19th, 2010
2:56 pm

I’m for broader (everyone pays), lower (top rate 33%), and more spread out (rates begin at $0, $20,000, $75,000, $200,000, $1,000,000, and $10,000,000) rates with almost no deductions. That includes this one. For those that whine that the rich don’t pay enough, the elimination of deductions would more than offset the lower rates.

I read it as I see it

November 19th, 2010
3:08 pm

Go to a national sales tax or flat tax, and I’m for NO deduction, period.


November 19th, 2010
3:25 pm

Get rid of the IRS. Set a flat tax where EVERYONE pays the same % and get rid of ALL Deductions.


November 19th, 2010
3:26 pm


33%? How about 10%


November 19th, 2010
3:33 pm

How about a tax holiday for 2 yrs?


November 19th, 2010
3:36 pm

How critical are the people that have never had to use the welfare system!!! There are people that worked for years in jobs with their master degrees and doctorates and are utilizing “entitlement” programs. If it were you out of a job and looking for one over a year and trying to take care of your family. You wouldn’t be so quick to say take them away these lazy people need to get a job..from where? Those programs keep MILLIONS of small business afloat. But you don’t hear about that. You don’t hear how many businesses started taking those same resources so they could stay in business or get a larger part of the market share. So before you put down the entitlement programs find out who survives on those programs. It’s not just the families that are receiving but the businesses they go to use them. If you live in a neighborhood and your house is 500K or more go to the grocery store nearest your home and see how many of your neighbors are using them to survive. I’ve worked in that sector of government for years and people that never thought they would need them are using them and praying something come along that they don’t have to. Of course we hear about the people that abuse the system but it’s not near as many people that are doing what’s necessary to take care of their families while working the only job they could find. Spend a month without the things you have and see what your actions would be. Where would you go if you suddenly or progressively lost it all trying to keep it all. It is just sickening to me to hear the “I got mine and don’t you ask for me for anything and I will give it if I want to. If you are suffering and I don’t feel like you then you suffer where you are” attitude. Show some compassion for God’s Sake…REALLY!!

Greedy greedy baby boomers

November 19th, 2010
3:43 pm

Isn’t it funny how just as the baby boomers start paying off their mortgages, a proposal arises to eliminate the mortgage interest deduction? The boomers got to benefit from nearly every tax break and fiscal policy over the past 40 years – remember in the 1970s when student loan and even credit card interest was tax deductible? Or how inflation in the 80s helped increase the stock portfolios and the values of their homes? It is further astounding that the deficit reduction commission didn’t propose income contingent social security payouts – even though that would have a greater impact than the mortgage interest deduction. This is nothing but another example of the Greedy Boomer Generation at their finest.


November 19th, 2010
3:47 pm

fair tax! The flat income tax is what the current tax system evolved from. But I very much doubt the “criminals” in DC would ever give up the power of class warfare.

Editor In Chief

November 19th, 2010
3:52 pm

“If this was true then why is it every year Warren Buffet says that he pays a lower percentage in taxes than his secretary? I guess if your right then his secretary makes more than he does.”

This is the one of the lamest arguments around, much like just like “Blame Bush” or “Obama inherited” this mess! If Warren Buffet, Steve Jobs, Bill Gates, etc, etc, etc want to dump more money into the Federal government via taxes, then I say go for it. Leave the rest of US alone.

@ “Are You Kidding Me” – - – FYI – - – you are NO Warren Buffett and neither are the rest of us. Your agrument is rubbish and you know it!

Miilions more like ME

November 19th, 2010
4:05 pm

@ FOR REAL You need to “Get Real”

I, along with many others, have never used an entitlement programs and NEVER WILL. I would love it if the government would stop stealing money out of my paycheck via SS, medicare, ect. I have saved and invested wisely and will NEVER need these entitlements.

Also, I did loose my job for close to 10 months and NEVER used the unemployment handout from the government. How you ask? I took responsibily a long time ago and KNEW that an economic disaster was inevitable. I worked hard and saved for the inevitable like EVERYONE is suppose to.

So please STP with whatever “story of the day” you have, I and millions of others DO NOT want to hear it anymore. Take care of yourself so the taxpayers don’t have to!

The Fair Tax is the only way to get rid of moochers like you!

Millions more like ME

November 19th, 2010
4:14 pm

FOR REAL says … “It is just sickening to me to hear the “I got mine and don’t you ask for me for anything and I will give it if I want to. If you are suffering and I don’t feel like you then you suffer where you are” attitude. Show some compassion for God’s Sake…REALLY!!”

You have the biggest attitude of anyone I have ever heard of. Many millions of us show compassion by giving, donating time and money to charities to help those in REAL need. You are talking about government entitlement moochers or those that refuse to take personal responsibility (perhaps like YOURSELF) for their families. I would be ashamed if I had the kind of attitude that you have. It’s attitudes like yours that are erroding compassion for those of us that do give our time and resources to worthy causes.

FOR REAL, you should be ashamed. You preach nothing but hate and hypocrisy. I pity people like you.


November 19th, 2010
4:20 pm

As –part– of the tax reform package, I am OK with it. It wa a mistake to begine with, assisting people to buy homes sooner than they could really afford it and to buy bigger than they could really afford. We do need a re-set. But, tax refom has to be followed though on. The report calls for 3 tax rates, all lower, but with fewer deductions and credits available. Business rates are reduced too, but with fewer deductions.
IF, they are successfull in simplifying the tax code, they will actually collect more taxes and reduce IRS staff…considerably.

All good.


November 19th, 2010
4:27 pm

“Spend a month without the things you have and see what your actions would be. Where would you go if you suddenly or progressively lost it all trying to keep it all.”

This has happened to me, when a job offer was rescinded right after 9/11. I survived. I paid the hefty Cobra payments and when that ran out incorporated in order to purchase health care coverage for myself and my family (I had kids), at a cost of almost $2000 per month. Unemployment was a total joke; people who rely on that truly are in trouble. I’m current on my mortagage payments and carry only manageable debt. So don’t preach to me.


November 19th, 2010
4:29 pm

Eliminating the mortgage deduction would further gut the housing industry. Stop spending money on stupid stuff like that electronic wall that doesn’t work along the U. S.-Mexican border and fixing up mosques in foreign countries.


November 19th, 2010
4:35 pm

If I hear one more social security recipient moan and groan about not getting their COLA raise – I am going to punch their lights out!


November 19th, 2010
4:40 pm

Anne, dear – The mortgage deduction has been around for decades – this is nothing new. This is the worst time to elinimate this tax deduction, when the RE market is in the toilet and house values are less than the mortgage, especially among $500 and up mortgages. This would probably start a new round of defaults, more people walking away from debt. If they want to do away with it, grandfather those in who already receive the deduction and make any new mortgages – home purchases exempt.

Greedy greedy baby boomers

November 19th, 2010
4:54 pm

And to all of you who moan about how the “rich” pay an unfair share of taxes. Please stop regurgitating one of the most tired LIES perpetrated by Fox News (other than the liberal media myth) and take some time and educate yourselves. While it is true that the top 10% pay 70% of income taxes, this leaves out a huge revenue source – namely, FICA taxes. Personal income taxes account for 43% of federal receipts – FICA accounts for 42%. As you may be aware, Social Security taxes are only paid on income up to $106,000. So the truth is, the top 10% pay around 40% of total income and payroll taxes. If you include other sources of tax revenue, that percentage decreases to less than 30%. Oh, and by the way the top 10% control 70% of the wealth. In other words, the top 10% pay 30% of the taxes to maintain the system that allows them to accumulate more than 70% of the wealth. Not a bad deal of you ask me.

Think B4 U Post

November 19th, 2010
5:08 pm

You said…
“And to all of you who moan about how the “rich” pay an unfair share of taxes. Please stop regurgitating one of the most tired LIES”

Then you concluded …
“the top 10% pay 30% of the taxes to maintain the system that allows them to accumulate more than 70% of the wealth.”

So which is it moron, a lie or the truth? You know it’s the truth, but will find loopholes not to admit it. And stop watching Fox News to get your stats if you don’t find them credible. Fox News, Hannity, Limbaugh are popular because it’s the Liberals that listen and watch! :)


November 19th, 2010
5:23 pm

Niqoooooooooooo. I can abuse the system and perpetuate stereotypes?


November 19th, 2010
6:34 pm

Mr. Fed Up is absolutely correct. What he says makes perfect sense.

Credit Me

November 19th, 2010
10:33 pm

Change the deduction to a tax credit, but limit the amount for each taxpayer.


November 20th, 2010
12:37 am

Sooooo the Fair Tax wannabes are back. Don’t you think if it was such a good Idea that the politicians would have been promoting that farce a long time ago…The Politician’s, as corrupt as they are, even they know this Farce will not work. The only ones making money off of that nightmare Tax book, are the ones who wrote the Fairy Tale Book…


November 20th, 2010
1:05 am

Everyone paying 10% won’t pay the bills, maybe 25% without Wars. We have to remember we have to think of the Common Good for everyone, even those who have nothing. Freedom is not Free we all have to pay our fair share, including Corporations. Look to parts of Africa, do any of us want to live like people in Somalia or other such places. To be locked in Gated communities or armed compounds afraid to go out even just to go to a Grocery store, if one even would exist in that environment. Think it couldn’t happen, it has and it could, not here, not yet, but it could be our future. We have a mess and it is going to take some intelligent, thoughtful people to get this country going in the right direction again. President Obama is trying his best, but it might not be enough. We should all be working for the same goal, getting this country on the right track, but no, all people can do is bicker and spout lie after lie and people believe such crap. Why do people vote against their own self interest? I’m truly baffled.

More Tax

November 20th, 2010
6:16 am

Rich people need to pay a lot more taxes! Anyone making below $100,000 should only have to pay 10% of their income in tax and rich people should pay all the rest. I’m tired of paying taxes and all those rich people get away with paying almost nothing by hiring tricky lawyers and CPAs who know all the loopholes.

Greg Jones

November 20th, 2010
6:24 am

This is very simple people, we should go to a flat tax period. But first STOP all this crazy spending in congress. They are like teenages with new credit cards at the mall and can`t pay the bill at the in of the month or the interest.


November 20th, 2010
8:06 am

I support getting rid of the mortgage deduction. It is welfare for the middle class. As a result of it, the rest of us (who either have our homes paid for, or who don’t own homes) pay much more on taxes. Why should we? Yes, home ownership is a stabilizing factor for a neighborhood. However, it is a goal that most people prefer anyway, and will continue without welfare. We should not be using public taxes to pay for private actions, actions that will happen anyway.

While I don’t support the FairTax, there are currently too many exemptions that have a positive impact on the upper middle class and wealthy. Yes, they are the ones that make the money. How do we expect to get money from those who don’t? Do we need to get people off the dole? Yes! Do we have people who disproportionately take resources, year after year? Yes! Does that need to be addressed? Yes!

Wealthy folks ignore the fact that they did not make their money “on their own.” They owe it to the “little people” they employ (who actually perform the work), and to the country who has allowed them to make the money.