Just as the U.S. housing boom appears to be slowing, debate is starting among policy-makers about reining in one of the sacred cows of public policy – the mortgage-interest deduction and other tax benefits granted to homeowners.
A presidential commission on tax reform will take up the subject for the first time on Tuesday. “Everything’s on the table,” said Charles Rossotti, a panel member who was commissioner of internal revenue from 1997 to 2002.
The mortgage-interest deduction will save homeowners $61.5 billion in taxes this year. The panel is likely to consider scaling back the deduction for mortgage interest on second homes or home-equity loans, and changing the deduction for property taxes.
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