TPM Reader YF asks something I’ve been wondering. Is it really such a hot idea to cap the home mortgage deduction at all?
First- haven’t the GOP been harping about making the tax code simpler for years? Doesn’t the ease with which they have got behind a salad of rolling deduction caps and comically absurd apply-upper-bracket-rate-to-lower-bracket-money voodoo totally expose their actual and only concern to be protecting the 1% from paying their way? I know, we knew this already- but won’t someone in the MSM ask them about this?
Second- in the midst of all the higher rates vs. deduction cap arguments a very simple point has been lost- capping things like mortgage deductions in the current economy is an absolutely horrible idea. This would be an unmitigated disaster. I don’t have the numbers to back this up but I suspect that there are a lot of middle and upper middle class folks for whom things like mortgage deductions are the only thing that kept them from losing their homes and having their lives upended or destroyed when the housing bubble burst. I am one of these folks. My wife and I have good jobs (less than $200K/year combined income) and have suffered pretty mild setbacks in salary and benefits during the downturn. We are lucky enough to own a house in a great area of Brooklyn and have two healthy happy kids in good public schools. The way we have mostly been effected by the recession is that we haven’t saved any money in 4 or 5 years- and we haven’t been eating oatmeal every meal so maybe some of that is by choice. But without the mortgage deduction we would certainly have had to sell our home or had it taken from us if we’d tried to hold on to it. Now- before it sounds like I am asking anyone to break out the violins for us let me state that, in the grand scheme of things, we’d have been fine. We’d have sold our house and moved to an apartment or another city and made due. My point is that removing these sorts of deductions will necessarily place many, many people on the bubble in what remains a really tough economy. How can this be anything but an absurd, damn near criminal, suggestion for politicians to make right now? How can the MSM yakkers not laugh in their faces and tell them to come back when they have something not incredibly stupid to say about this subject?