According to an article by Lisa Prevost, New York Times, “most taxpayers do not benefit from the deduction at all because they do not itemize their federal income tax returns.”
She cites Joseph Rosenberg, a research associate at the Urban-Brookings Tax Policy Center, who said that “only about 30 percent of taxpayers itemize, rather than take the standard deduction. And the majority of these itemizers are upper-middle and upper-income households.”
Therefore, taking away the home mortgage deduction is like a tax on wealthy Americans and most Americans would approve that, correct? Following the story, people with mortgage interest deductions are households earning $100,000 to $500,000 a year.
That hits people lower than the $250,000 income level as the President has sought to protect, and that Republicans have not agreed to.
“About two-thirds of the total benefit go to that group in the 80th through the 99th income percentiles,” Mr. Rosenberg said.
Don’t you wish that Republicans and Democrats would lay their cards on the table side by side, so we can see what the horse trading is all about?
“Mortgage-interest deduction could be on the table in ‘fiscal cliff’ debate
By Brady Dennis, Published: November 28 | Updated: Thursday, November 29, 8:53 AM
Of all the deductions woven into the sprawling U.S. tax code, few have been more fiercely guarded than the enormous tax break that lets homeowners deduct the interest they pay on their mortgages.
But as Congress and the White House negotiate the first major rewrite of tax laws in decades, changing the generations-old mortgage-interest deduction — which costs the government roughly $100 billion a year — has gone from far-off possibility to part of the conversation.
At the White House Wednesday, President Obama addressed a group of Americans whose taxes would go up if Congress failed to extend the middle class tax cuts.
The outcome of that debate could have profound long-term effects on homeowners across the country — and particularly those in the Washington area, who tend to benefit from the tax break more than many other Americans due to the region’s hefty home prices and high incomes.
As the Obama administration and lawmakers on Capitol Hill scramble to defuse automatic spending cuts and tax increases set to take effect Jan. 1, a herd of sacred cows — from Social Security and Medicare to deductions for charitable giving and mortgage interest — are in danger of losing their untouchable status.
Members of both parties have largely steered clear of detailed proposals so far. But plans put forth in the past year by President Obama and Mitt Romney to place limits on annual total tax deductions are likely to crimp the mortgage-interest deduction for certain taxpayers. Top congressional Republicans also have expressed openness to limiting total tax deductions as part of an overall budget deal. In addition, the presidentially appointed Simpson-Bowles fiscal commission suggested scaling back the mortgage-interest deduction as part of its own set of tax-related proposals.