Tuesday, December 11, 2012

Home Mortgage Interest Deductions... On The Table?


The National Association of Home Builders didn't spend as much on elections this year as they normally do. The $2,290,068 they did spend on federal elections in 2012 was the smallest amount since 2000. This year their PAC gave $1,398,500 to federal candidates, 75% of it to Republicans, 25% to Democrats. A lot of the big dough they handed out went to other PACs-- $30,000 each to the DCCC, NRCC, DSCC, NRSC and the RNC-- and $10,000 pops to shady operations like the Blue Dog PAC, the New Dem PAC and personal leadership PACs operated by notoriously corrupt Members of Congress like John Boehner (R-OH), Miss McConnell (R-KY), Steve Israel (D-NY), Paul Ryan (R-WI), Steny Hoyer (D-MD), Dave Camp (R-MI), John Cornyn (R-TX), Eric Cantor (R-VA), Max Baucus (D-MT), Kevin McCarthy (R-CA), Pete Sessions (R-TX)... They also made direct payments to Members of Congress with well-earned reputations for always being willing to sell their vote to the highest bidder-- $10,000 legalistic bribes to John Barrow (Blue Dog-GA), John Boehner (R-OH), Fred Upton (R-MI), Mike McIntyre (Blue Dog-NC), Randy Neugebauer (R-TX), Greg Walson (R-OR), Kevin Yoder (R-KS), Mike Rogers (R-MI), Gary Miller (R-CA), Paul Ryan (R-WI), Eric Cantor (R-VA), Don Young (R-AK), Nick Rahall (D-WV), Reid Ribble (R-WI), Kristi Noem (R-SD), Mike Pompeo (R-KS), David McKinley (R-WV), Scott Garrett (R-NJ), Joe Heck (R-NV), Sean Duffy (R-WI), Shelley Moore Capito (R-WV), Dean Heller (R-NV), Joe Manchin (D-WV), Rick Berg (R-ND)... hundreds of thousands more.

And now they're worrying if all the bribery is going to do them any good. Their well-compensated whores, the Republicans and Blue Dogs, are starting to turn on them, opening the possibility of eliminating the home mortgage deduction, or at least some part of it. Jerry Howard is the head of the National Association of Home Builders and he's denouncing the very idea as "a ludicrous concept... This is the last thing Congress should be considering when what we're trying to do is stabilize the economy... It needs to be taken off the table." Howard warned that making any changes to the mortgage interest deduction as part of the Obama Boehner Grand Bargain would be catastrophic for his industry and for the economy as a whole.

Peter Orszag, formerly Obama’s chief budget adviser, said studies suggest that the mortgage interest deduction appears to do more to raise home prices than it does to encourage new owners to buy but he says it would be "awkward" to make any changes right now, given that the housing sector just now seems to be getting back on its feet.

During a "Twitter town hall" last week, President Obama responded to a question on the subject-- "As a homeowner, I worry deductions for homeowners are at risk. Is that the case?” Obama's answer": “Breaks for middle class [important] for families & econ. If top rates don’t go up, danger that middle class deductions get hit.” What Obama does favor, sensibly, is easing out the deduction for high net worth individuals.
During each year that he has been president, Mr. Obama has proposed clipping the mortgage interest deduction for taxpayers in the top two tax brackets. The proposal hasn’t gone anywhere.

Under that proposal, households that currently pay income taxes at the 33% and 35% rates would only be able to claim deductions at the 28% rate. In other words, for every $1,000 in deductions, a household would realize a tax savings of $280 instead of $350.

The White House hasn’t said whether it would support more aggressive measures that would limit the mortgage interest deduction, such as limiting the deduction on second homes, limiting the deduction to interest paid on, say, $500,000 in principal (the current cap is $1 million), or capping deductions across the board, an idea proposed by Republican nominee Mitt Romney.
So will Boehner and Cantor and the Blue Dogs come to the rescue of the Home Builders-- who have pumped millions into their careers-- or sacrifice them on the alter of keeping taxes on the obscenely rich low? Even Ben Stein thinks this is foolish:

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