Home Mortgage Deduction

Every absurdity has a champion to defend it.” – Oliver Goldsmith

hmd2Rep. Tom Reed reportedly sees many “problem solvers” within New York’s newly-elected GOP House delegation. “Problem solvers” are committed to bipartisan cooperation. What will Rep. Reed and his Republican colleagues do–unite with the far right, reward large contributors for their support, or take a moderate bipartisan course?

The home mortgage deduction may provide an opportunity to check. Tom has not publicly taken a clear position on it. Wealthy members of Congress benefit directly. Realtors support it, but although Republican orthodoxy generally favors tax simplification, some on the far right are unwilling to embrace repeal of deductions in exchange for a tax rate cut they fear would be ephemeral.

Realtor advertising says Tom favors preserving the home mortgage tax deduction which as a tax reformer he might be expected to oppose.  However, the Ryan budget, which Tom Reed supported, would have repealed it in return for lower tax rates. Tom, on conservative principle, ought to favor low rates without deductions.  If Paul Ryan continues to oppose it, Reed will face a dilemma–to double cross the Realtors or buck the GOP leadership. Most likely the GOP will back off–Ryan has already softened his position–and Reed will support the deduction as he promised.

“This longstanding tradition is something that if we move away from we should do it very carefully,” he (Reed) said. “And we should do it in a very well-thought-out manner.” Who knows what he meant by that?

The mortgage-interest deduction, with an estimated cost of $72 billion in forgone revenue in 2014, is one of the largest tax breaks in the Internal Revenue Code and the subject of a real-estate industry lobbying campaign to protect it.

Most likely Tom will give self-interest and Realtor interests priority.

© William Hungerford – November 2014

Advertisements

About whungerford

* Contributor at NewNY23rd.com where we discuss the politics, economics, and events of the New New York 23rd Congressional District (Allegany, Cattaraugus, Chautauqua, Chemung, (Eastern) Ontario, Schuyler, Seneca, Steuben,Tioga, Tompkins, and Yates Counties) Please visit and comment on whatever strikes your fancy.
This entry was posted in Congress, Political, Reed's Views and tagged , . Bookmark the permalink.

5 Responses to Home Mortgage Deduction

  1. josephurban says:

    We need to end all deductions. Period. Phase out over a 10 year period so businesses and individuals can plan accordingly. Isn’t it the GOP mantra that government should not “pick winners” ?
    Yet they pick winners through the tax code all the time, don’t they?

  2. BOB McGILL says:

    whungerford says:
    November 10, 2014 at 10:00 am
    Bob, can you find an example where one has bashed corporate America or wealthy people? Please be specific. I suspect it is only your fantasy.

  3. whungerford says:

    I am not convinced that all deductions are unwarranted or that they can be blamed on the GOP. When Republicans talk about fairer taxation, they may not be thinking of cutting tax breaks they favor; the home mortgage deduction is an example. Some conservatives are wary of repealing deductions with good reason–repealed tax breaks may be resurrected. Perhaps first we need outlaw lobbying.

  4. josephurban says:

    I am not blaming the GOP for tax breaks and the faulty code. The Dems are at fault as well. But I am calling out the GOP because they are the ones who claim government should “not pick winners and losers” yet that us exactly what they do. One of the first things McConnell says he wants to do is lower the corporate tax rate, which is one of the highest in the world. Blowing smoke. Because of all the tax breaks and deductions US major corporations (especially those now found to be hiding profits in Luxembourg) pay some of the LOWEST taxes in the world. (Some pay none at all)
    I would favor lowering rates…IF we eliminate all deductions as well. Isn’t that what “free enterprise ” is supposed to be about ? If you can’t make it without government assistance your company should fail ?

  5. whungerford says:

    Eliminating deductions and lowering rates has an appeal, but some deductions may serve a worthwhile purpose which ought to be considered. Perhaps too, we should distinguish corporate taxes from individual taxes. Regardless, it does little good to repeal deductions now without reforming the process that currently let’s lobbyists write our laws.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s