• 
  News
• 
  Blog
• 
  Like
• 
  Follow

Search news    

---

New budget proposes cut to MID

February 17, 2011 - President Barack Obama's newly proposed budget again recommends scaling back the mortgage interest deduction, a move real estate experts have warned could encourage fewer buyers to moving into new homes.

The deduction allows homeowners to deduct their mortgage interest from their tax liability each year and has traditionally been seen as a tenet to housing. However, Obama's budget proposal would only allow taxpayers in the 33 and 35 percent tax brackets to deduct their interest at the 28 percent tax rate. That would reduce how much those homeowners could benefit from the deduction by about a third, though the White House says it would save the country $321 billion over a period of 10 years.

Housing experts said cutting the deduction would mean buyers of all tax brackets would be less encouraged to pack their moving boxes. Any threat to a housing recovery could spell doom for the greater economy, some said.

"We will oppose any limit," Jerry Howard, chief executive of the National Association of Home Builders, told CNN Money. "This is an attack on the middle class."

Obama also proposed scaling back the deduction as part of his budget last year, but Congress voted it down. CNN Money added that the latest proposal will likely encounter significant opposition from Congress.
 

Recent Articles

Related Categories