More Comment on the Obama Administration to Terminate the Mortgage Interest Deduction

I have received many comments from real estate agents that lack of a tax credit is hurting the current real estate market. Said another way, the tax credits (artificially) stimulated the markets and now that tax credits are no longer available, the real estate markets are challenging at best.

Here is the hypocrisy in the Obama administration policies on real estate: they induced tens of thousands of families to purchase real estate by incentivizing them with a federal tax credit. Now they want to eliminate the mortgage interest deduction on taxes. Lure them in with tax incentives and then take the incentives and much more away with significantly higher tax burdens if/when the mortgage interest deduction is eliminated. In my opinion, eliminating the mortgage interest deduction will SERIOUSLY affect the real estate market and particularly the middle class. The “wealthy” have already seen their mortgage interest deduction severely limited.

The media seems to have no intention of reporting anything that the administration does that may harm a group of people – unless it is the wealthy. However, this policy will REALLY hurt the middle class because many home owners purchased a home – or purchased a more expensive home – because of the mortgage interest deduction. With so many homes already in foreclosure, can we afford more foreclosures because more home owners can no longer afford their mortgages? It is certainly foreseeable that foreclosures will go up if this policy is invoked.  I have had many clients that lived pay check and relied on a tax return to get back ahead of the household bills. For that matter, I have also had clients that did not realize how much less they would receive back on taxes when they did a reverse mortgage!

Seems time for a flat tax…nothing is more fair than that. My proposal..no tax on the first $40,000 of income and then a flat tax of 15% thereafter. This simple solution would raise MORE tax revenue and everyone would be happy.

Why does no one seem to notice that this administration has no clue about business, real estate and pretty much anything?? They are completely detached from reality...