As Congress struggles with ways to simplify the income tax law, politicians regularly tell us that “everything is on the table,” perhaps giving the impression that every deduction and credit will be scrutinized.
Maybe not, at least according to a report by Bloomberg, titled, “Congressional Tax Writers Disproportionately Benefit from Tax Breaks on ‘Blank Slate’ Chopping Block.”
One of the largest potential revenue raisers, with an estimated cost of $72 billion in 2014, is the home mortgage interest deduction. Any effort to repeal or scale back the deduction faces heavy lobbying from the real estate industry.
Under current law, you can deduct interest on mortgages of up to $1.1 million on as many as two homes. The nonpartisan Tax Policy Center offers a rough estimate that limiting the deduction to one home would raise $8 billion in tax revenue.
So what are the chances that Congress will change the rules?
According to Bloomberg, members of Congress are eight times more likely than the average American to own a second home with a mortgage. Many members own a residence in their home state and a second home in the Washington area.
Bloomberg reports that 40 percent of the members of the Senate Finance Committee and the House Ways and Means Committee – the congressional tax-writing committees – have mortgages on homes other than their home-state residence.
“I don’t mind what Congress does, as long as they don’t do it in the streets and frighten the horses.” – Victor Hugo