It seems that the Mortgage Interest Deduction (MID) is on the table as part of the solution to reforming the tax code and averting the fiscal cliff. Recently, there have been various reports and articles written suggesting that the MID isn’t as important or valuable as the general public thinks it is and that it benefits the wealthy more than the middle class.
Many argue that the housing industry is just getting its footing and that any changes to the sacred deduction will further derail its recovery.
A recent recommendation by the ThinkTank Brookings Institution says that reforming this deduction is an opportunity to save hundreds of billions of dollars in the next 10 years. Of course this could be just one change to the overall tax reform they are debating in Congress, but it seems that the momentum here is gaining. Of course the MID is always a hot topic as it effects all homeowners and is the single biggest deduction for the middle class.
My take is that the Mortgage Interest Deduction will remain, but with changes. Most notably, caps or limits for high income earners, those making above $250,000.
Click Here for the Brookings Article “Cut to Invest: Reform the Mortgage Interest Deduction to Invest in Innovation and Advanced Industries”