Let’s stop subsidizing mansions!

http://www.salon.com/2012/12/13/lets_stop_subsidizing_mansions/

With Congress finally starting to have a serious conversation about our revenue crisis, there are obvious reasons to limit the amount of mortgage interest that Americans can deduct from their taxable income.First and foremost, current law — which allows homeowners to deduct interest on mortgages up to $1 million — is extremely expensive for the country. As federal data show, it costs roughly $100 billion a year, making it the third largest expenditure woven into the tax code.That huge outlay might be justified if the deduction was a widely distributed, middle-class program. But with only about a third of all taxpayers earning enough to make it worthwhile to itemize their tax returns, just a quarter of all tax filers ever actually utilize the deduction. Add to this the fact that the deduction can be used for second homes, and the result is a write-off that mostly benefits the wealthy. In dollar-figure terms, it is a deduction that, according to the Tax Policy Center, saves $5,460 for someone making more than $250,000 a year and only $91 for those making less than $40,000 a year.Continue Reading…

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