Overall, the tax bill is terrible for all the obvious reasons. It does have one redeeming aspect: Reducing the tax system’s bias in favor of owner-occupied housing. The mortgage interest deduction and related provisions in the federal tax code unwisely favor home owners over renters, encouraging families to buy more expensive homes-using larger mortgages-than is wise from any economic perspective.
Reducing this bias by capping the mortgage interest deduction and enlarging the standard deduction is good policy. Maybe this is the only good aspect of this dog’s breakfast of a regressive and irresponsible bill.
Democrats should junk virtually everything in this tax bill if they take over the federal government in January 2021. They should keep these two provisions-even if Republicans enacted them in a mean-spirited effort to hammer wealthy blue states.
I've read that only a tiny fraction of the population-maybe the top 16% or so?-will be using the mortgage interest deduction after this year. That leaves it politlcally vulnerable and it shortly ought to be possible to kill what remains of it.
or perhaps apply the some part of the deduction to homes in MSMA's only in municipalities with no zoning restrictions on density in residential areas - give homeowners the choice of paying higher federal taxes or getting rid of restrictions on high density development.
Okay, that's a really neat idea.
If the argument is that people need to be protected from making unwise investments, how are existing homeowners helped by rendering that previous investment even more burdensome? Does the change only apply to future mortgages?
I have long thought that there is some public interest in easing the way to homeownership for an ironworker in Biloxi, and none whatsoever for a podiatrist in Short Hills. A tax credit for, say, forty per cent of interest paid up to no more than thirty thousand total interest paid would make the ironworker's budget easier and do very little for the podiatrist.