A number of government programs have become ensnared in the fiscal cliff’s cutback net, months before scheduled cuts are even set to occur. The mortgage interest tax deduction is the latest tax break to come under consideration as Washington attempts to narrow the federal deficit by January 1, 2013.
An article from CNN Money urges Washington to stay away from the touching the mortgage interest tax deduction, as getting rid of it would stunt the already struggling housing market’s attempts at full recovery.
Meanwhile, lobbyists such as the National Association of Realtors have garnered millions of dollars to fight Washington’s possible decision of cutting one of the oldest tax breaks designed to encourage home ownership.
CNN Money writes:
Lately, housing is on the mend and one of the few bright spots in a lumbering economic recovery. Taking away a key tax break could throw a wrench into home buying plans and hurt a long-sputtering recovery.
“[Getting rid of it] would throw the housing sector into turmoil…and chill the market just as it is trying to recover,” said Jerry Howard, CEO of the National Association of Home Builders.
Lobbyists from the industry have spent a combined $30 million this year, up from $27 million last year, according to Center for Responsive Politics figures. The bulk of that came from the powerful group, the National Association of Realtors, which spent a record $25 million on lobbying this year, more than any other year, federal records show.
The deduction is the third largest tax expenditure on the federal budget, according to the Congressional Research Service. The amount of revenue the government would forgo from those claiming mortgage interest deductions is estimated to reach $100 billion by 2014.
Written by Jason Oliva