The National Association of Realtors respond to a Jan. 1 Washington Post editorial about the idea of cutting the mortgage interest deduction. I'm as interested in deficit reduction as anyone, but I have serious reservations about actions that could dramatically harm the already fragile real estate market.
Removing this longstanding homeownership incentive just isn't a smart move right now. Here's an excerpt from the Jan. 2 letter submitted by Lawrence Yun (viewable here in its entirety):
"It’s a common misperception that the mortgage interest deduction benefits primarily the wealthy, as argued in the Washington Post’s January 1 editorial, 'Trim the Excessive Tax Subsidy for Real Estate.'
"In fact, the MID actually benefits primarily middle- and lower income families. Sixty five percent of families who claim the MID earn less than $100,000 per year, and 91 percent who claim the benefit earn less than $200,000 per year. As a percentage of income, the biggest MID beneficiaries are younger middle-class families.
"… It’s no wonder, then, that most Americans support the MID. In fact, in a recent NAR survey by Harris Interactive of 3,000 home owners and renters, nearly three-fourths of home owners and two-thirds of renters said the MID was extremely or very important to them."
Sent by NAR Chief Economist Lawrence Yun