With all of the talk about the Debt Ceiling deal and the newly formed SUPER CONGRESS (also known in some curcles as the newest members of the Marvel Comics family, "The Injustice League"), there is one proposal that has been mislabeled and misunderstood.
The way I understand it, The super congress is tasked with coming us with a list of spending cuts...$2.4 trillion total – to go into place over the next several years. A $917 billion reduction over the next 10 years is automatic. An additional $1.5 trillion reduction must be decided by November 23rd.
What is squarely in the crosshairs of the Cut Committee is not a cut at all. It is a tax increase, no two ways about it, and it doesn't matter how much you like TEA or not, it is a Revenue increase that will hit the middle class and homeowners the hardest.
THEY ARE TALKING ABOUT CUTTING THE MORTGAGE INTEREST DEDUCTION. See the play on words. They got me to write the word "CUTTING".
Let me correctly word this.
THEY ARE TALKING ABOUT RAISING TAXES ON MOST, IF NOT ALL, HOME OWNERS!!!!
Cut / Elimination / Program Tax Increase being considered is the Mortgage Interest Deduction or MID as it is called inside the beltway.
The Mortgage Interest Deduction has been in place since 1913 and it allows homeowners that file itemized decutions to deduct the interest of their mortgage interest debt up to $1 million.
Translation: If you buy a home, and you have a mortgage, and you pay interest, you get a tax deduction. If this was eliminated it would be a tax increase for homeowners.
According to the Treasury the
cost tax benefit to homeowners of the MID this year is $100 billion.
Some are looking at this as if it is a "spending program". Others state the MID program only benefits those that are in the higher income brackets. (Owners not Renters) While this is understood, the benefit of homeownership on the economy and local communities should not be questioned. Even HUD won't back a loan in a building or condo community that has a greater percentage of renters vs. owners.
I thought that the reason that we got so close to driving our economy off the cliff during the debt ceiling "crisis" was because some of those negotiating were holding firm to NO NEW REVENUES, NO TAX INCREASES AND NO INCREASE IN TAXES.
Let's hope that they remember this when it comes to the Mortgage Interest Deduction. Getting rid of it is a Tax Increase. There are no 2 ways about it.
Let me know what you think of the Mortgage Interest Deduction and the talk of Raising Taxes on Homeowners.