Will Romney Toy With Mortgage Interest Deduction As Part of Tax Plan?

The mortgage interest deduction could be one potential target for trimming, republican presidential candidate Mitt Romney told a Denver news station leading up to Wednesday’s presidential debate. 

Included in several ideas about tax reform, Romney said mortgage interest and health care deductions could be part of a plan to offset a cut in tax rates overall. 

CBS News reports


“Offering tax reform ideas before his first debate with President Obama, Mitt Romney says he might be willing to reduce income tax deductions used by millions of families for home mortgage interest and health care costs.

Romney suggested the changes could be part of a plan that includes a 20 percent cut in tax rates across the board, continuation of upper income tax cuts that Mr. Obama wants to end, and a comprehensive tax overhaul plan that the Republican presidential contender has so far declined to flesh out in detail. Romney says his overall plans would invigorate the slowly recovering U.S. economy.

Both Romney and Mr. Obama spent Tuesday mostly in private, preparing for the debate, the president in Henderson, Nev., near Las Vegas, Romney was already in Denver, where the faceoff will take place Wednesday at 9 p.m. EDT. Neither held public campaign events, but Mr. Obama took a break from preparation to visit nearby Hoover Dam, and Romney picked up lunch at a Chipotle Mexican Grill near his hotel.

In an interview Monday night with Denver TV station KDVR, Romney said, “As an option, you could say everybody’s going to get up to a $17,000 deduction. And you could use your charitable deduction, your home mortgage deduction, or others — your health care deduction, and you can fill that bucket, if you will, that $17,000 bucket that way. And higher income people might have a lower number.”

…In the spring, Romney told donors that he would consider eliminating home mortgage deductions for second homes. That conversation, behind closed doors, was overheard by reporters standing on a private sidewalk.

Read the full CBS News report.  

Written by Elizabeth Ecker

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  • Many economists believe that appropriations of government revenues to individual itemized deductions must be stopped in order to turn deficit spending around.  Once a serious debate of that subject begins and significant reductions to home related deductions are legislated into law, the American public, particularly younger people, will begin to look at home ownership quite differently.

    The biggest immediate impact to reduced home related income tax deductions would be to home values of those taxpayers who are most impacted.  Some claim the immediate impact would be a drop in home values of around 10% and for some higher priced homes as much as 25% long-term.

    If home value appreciation drives our industry, tax policy could have a significant impact on our industry.

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