So, I'm standing in line, waiting to board an airplane when I hear a CNN news reader mention an idea to modify the mortgage tax deduction.
The panel found that current tax breaks for homeowners, such as the mortgage interest deduction, encourage wealthier taxpayers to buy bigger houses and do little to help others purchase homes.
That contributes to rising home prices and pushes less wealthy taxpayers toward risky loans, said Liz Ann Sonders, chief investment strategist at Charles Schwab. “We are starting to see some significant pain here,” she said.
One change discussed would lower the $1 million limit on mortgages eligible for the interest deduction to an amount closer to average housing prices, with adjustments for geographical differences. The panel also considered converting the current deductions into a credit, among other ideas.
What's missing is the amount the "average housing prices" is listed as being. The number I've seen is $350K.
Well, in my area, most of the homes being built, start above that price. However, I don't live in a "rich neighborhood". I live in a middle class neighborhood.
This would cause a housing market crash you would not believe. This would follow with a recession or depression.
This proposal is a "soak the rich" scheme that will catch ordinary middle class people. This is up there with the AMT.