The Housing Chronicles Blog: Obama's budget goes after mortgage interest deduction

Friday, February 27, 2009

Obama's budget goes after mortgage interest deduction

I'm starting to feel a bit sorry for singles making over $200,000 and couples making over $250,000 per year, as it seems they're going to be paying the freight for a revamped health care system.

Meanwhile, much of the country continues to waddle around, hitting up McDonald's drive-through windows and avoiding regular exercise, thus driving insurance costs up for everyone. This will probably turn out to be one of the biggest political fights of Obama's first year.

From Inman News

Industry groups representing Realtors, home builders and mortgage lenders are up in arms over the Obama administration's proposal to roll back the itemized deduction rate for wealthy taxpayers -- including deductions homeowners can claim on mortgage-interest payments and other expenses associated with homeownership.

The rollback of the tax break wouldn't take effect until 2011, and would apply only to families earning more than $250,000 and individuals making $200,000 or more -- less than 4 percent of taxpayers in 2006.

The Obama administration, which floated the idea in releasing its proposed budget Thursday, says capping the itemized deduction rate for wealthy families and individuals at 28 percent would raise $318 billion over 10 years, expanding health insurance coverage while lowering health care costs.

But industry industry groups say the change would hurt home sales and prices at a time when homebuyers need incentives, not disincentives, to buy...

Click here for full story.


Bryan Bennett said...

Couldn't agree more. I voted for Obama, and did so proudly, but this mortgage thing scares the crap out of me as a homeowner in high-priced CA. How about taxing the crap out of fast food, tobacco, and sodas to make the unhealthy pay the majority of the healthcare they're going to need.

Molehill TMI said...

See Bill Gloede's comments on said initiative on on Bill Gloede's blog. It's a presto manifesto.

Anonymous said...

In effect, it's a tax increase for the so-called "wealthy." I'm not for tax increases of any kind. However, I must say, I will feel a bit a schadenfreude if Congress passes it. Just thinking of all the boutique liberals in high priced states who voted for Obama and Congress -- somehow, it strikes me as poetic justice!