Uh-Oh, Mortgage Interest Deduction Part of ‘Fiscal Cliff’ Maneuvering

Paul Stewart is a veteran of public policy, legislative and political battles.


With 26 days and counting before we all fall off the “fiscal cliff,” that tax write-off American homeowners have enjoyed for more than a century – the mortgage interest deduction – well, get ready to kiss it good-bye.

Numerous reports concerning maneuvering on the fiscal cliff package have stated that a change to the long-standing policy that allows homeowners to deduct mortgage interest payments from their income taxes could be part of the remedy.  As homeowners (or potential homeowners), you should be outraged and opposed to any changes to the mortgage interest deduction (MID).

The administration’s proposal calls for limiting the value of the MID to 28 cents on the dollar for affected taxpayers, rather than 33 cents or 35 cents. “Affected taxpayers” are those where the value of itemized deductions are used for taxpayers earning more than $200,000 in annual income; or $250,000 for joint filings of married couples.

Now before you get all worked up into an Über Liberal rant, we need to immediately correct the misconception that only the wealthy benefit from the MID. In reality, it primarily benefits middle- and lower-income families. Almost two-thirds of those who claim the MID are middle-income earners; 65 percent of families who take the MID earn less than $100,000 a year, and 91 percent earn less than $200,000 a year.

Oh, and there’s this chestnut: There is also consideration of lowering the MID deduction ceiling to a home price of $500,000 and deleting its application to second homes and home upgrades. If that were in effect now, more than 35 percent of residences sold in San Mateo County last year would not have qualified for this benefit of home ownership.

So what needs to be done? Pretty basic stuff. Tell Congresswomen Jackie Speier and Anna Eshoo as well as Senators Dianne Feinstein and Barbara Boxer that, as your elected officials, it is imperative they remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest.

And in case you’re shy about this, you’ve got another 69,999,999 home owners who stand with you and are asking Congress to "do no harm" to the mortgage interest deduction and leave it as-is. It will be interesting to see who stands with us in support of the American Dream. Send your messages to:

Senator Boxer: https://boxer.senate.gov/en/contact/policycomments.cfm
Senator Feinstein: https://www.feinstein.senate.gov/public/index.cfm/e-mail-me
Representative Eshoo:  https://forms.house.gov/eshoo/webforms/issue_subscribe.htm
Representative Speier: https://forms.house.gov/speier/webforms/email_jackie.shtml

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Mark Casey December 06, 2012 at 02:30 PM
Very one sided, MID is a very unfair tax on the poor. In effect a tax on all non homeowners, also creating a false and inflated price on property. Ending the special interest taxation, simplifying the tax code, would be a tremendous benefit for the vast majority of Americans. MC
Audrey December 06, 2012 at 06:08 PM
This article is confusing. In the 3rd paragraph it states that the affected taxpayers are only ones who are earning more than $200k in income ($250k for couples) - but in the next paragraph it goes on to talk about the statistics of who uses the *existing* MID. If only the top earners are going to be affected by the proposal, why does it matter if 91% of people who take advantage of the MID are below the threshold? Nothing in this article states that there is a proposal to remove the MID for good.


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