During a Presidential election in the U.S., there is much talk about taxes and national debt. In order to close the gap on national debt, elimination of much favored mortgage interest tax deduction is taking the center stage. Some estimates indicates that if U.S. continues to allow the mortgage interest deduction for few more years it could cost the nation additional $460 billion. That accounts for one-third of the $1.3 trillion annual deficit.
One group argues that the current deduction benefits the builders, upper income people and the realtors. Some argue that it benefits the younger middle-class families more than any other group. Due to its benefit to the rich, some argue that the tax break should be eliminated for those who are earning more than $200,000 a year. Ninety-one percent who claim the benefit earn less than $200,000.
The elimination of the tax break could lower the value of higher priced homes and thereby reducing the price of all homes. That could also lower the net worth of more than 65 percent of all Americans. The elimination or lowering the mortgage interest tax deduction does not violate the “no new tax” pledge by some lawmakers.