Sunday's column about eliminating tax deductibility for mortgage interest triggered strong reaction and thoughtful commentary from a number of readers who took the time to email, phone or comment at the end of the column.
[By the way, Chris Farrell and I did not conspire to gang up on mortgage interest deductibility the same day. Sometimes, the left hand does not know what the right is doing.]
Nobody likes the idea of losing something, especially if they get nothing in return. And we (I'm a home owner, too) would have a right to be especially angry if the credit were eliminated or modified and the tax code and tax rates remained relatively unchanged. Simplification is needed, along with a reduction in tax rates.
FoxNewsFan noted: For most people, especially those who are barely making ends meet, this will not result in higher taxes. The recommendations included reducing the overall tax rates. For most people at the lower end of the income ladder, itemizing deductions does little or no good. That means we would be better off with lower rates and no mortgage interest deduction.
Some of the deficit-reduction proposals also include increasing the standard deduction to offset the elimination of mortgage interest deductibility and other measures.
My4Cents suggested changing, but not eliminating deductibility: Make it so only the very first mortgage ever on the home is deductible. Take away the deduction when the home is refinanced or home equity is used (let's stop using our homes as a bank account to finance cars and vacations). Only allow mortgages up to 120% of the national median sale price to be deductible. If you want a home that is priced higher than this you can go with out the tax deduction.
Good ideas. Send more my way: ericw@startribune.com
