Doyle McManus, a columnist with the Los Angeles Times, recently wrote an opinion editorial (Op-Ed) advocating the elimination of the Mortgage Interest Deduction.
C.A.R. issued the following rebuttal to the Op-Ed:
If Doyle McManus wants to support a tax measure that could reduce the federal deficit, why put that on the backs of the lower- and middle-class families that can least afford it.
If the mortgage interest deduction is taken away, it would cost the average California taxpayer $3,940 annually, a substantial amount for those who need it the most. In California, 59 percent of taxpayers who claimed this deduction in 2010 earned less than $100,000 a year – not exactly high income in California, where home prices are among the highest in the nation.
Eliminating the deduction would mean fewer home sales, not to mention a drop in other purchases that typically accompany a home sale such as furniture and other retail purchases. Already struggling local governments would see tax revenues fall, and since housing is widely regarded as a key economic driver, our country could be driven back to recession.
A recent CALIFORNIA ASSOCIATION OF REALTORS® survey found that nearly eight in 10 home buyers said that the mortgage interest and property tax deductions were “extremely important” in their decision to purchase a home. And a Pew Research Center study last year found that 80 percent of Americans believe that buying a home is the best long-term investment they can make. After all, renting is not the American Dream; homeownership is. For many, the mortgage interest deduction can mean the difference between attaining that dream or not.