Reduce Mortgage Interest Tax Deduction for the Wealthy

mortgage-interest-tax-deduction

Target: Members of Congress

Goal: Reduce the mortgage interest tax deduction for Americans in the top income bracket as a way to increase tax revenue and shrink federal deficits.

The mortgage interest tax deduction encourages home ownership by lowering the tax bill for home owners. While the break looks appealing on paper, in practice, the deduction really only benefits those earning more than $250,000 a year. In an effort to avert the fiscal cliff and begin to balance the books, it is necessary for the deduction be revised to increase revenue and help the middle class, not the six-figure class. Please sign this petition and urge Congress to lower the deduction for Americans in the top income bracket.

The mortgage interest deduction is one of the oldest tax breaks in history and is estimated to reach $100 billion in forgone government revenue by 2014. According to the Tax Policy Center, people earning more than $250,000 a year see an annual tax saving of about $5,460. For those with an annual income of less than $40,000 a year, the average savings is just $91. In an effort to combat the rich getting richer, President Obama has several times proposed cutting the deduction down to 28% from 35% of mortgage interest payments for Americans in the top income bracket. The reduction would continue to encourage home buying, while freeing up some much needed revenue for the country.

Upper-income Americans take advantage of this tax break to help them buy million-dollar homes, but there are relatively few federal housing dollars for extremely low-income families – and even fewer for those in the next tier up, who earn between $20,000 and $50,000 a year. With all the talk of growing the middle class in order to recover from the recession, it is important that old policies be reformatted to reflect the modern day middle class. A middle class American is not one who earns $250,000 a year.

Please sign this petition and encourage Congress to lower the mortgage interest tax deduction for Americans in the top tax bracket in order to increase revenue, avert the fiscal cliff, and shrink federal deficits.

PETITION LETTER:

Dear Members of Congress,

As we approach the looming fiscal cliff among enormous federal deficits, it is time to revisit old tax breaks to make sure they are working the way they were intended. The mortgage interest tax deduction was intended to encourage home ownership by reducing the tax bill for home owners. While the deduction sounds good in theory, it no longer provides relief for middle class homeowners. Please reduce the mortgage interest tax deduction in order to free up revenue and avoid the fiscal cliff.

According to the Tax Policy Center, the deduction tends to benefit very upper middle class families the most; for those earning more than $250,000 a year, the annual tax savings run about $5,460. For those with annual incomes of less than $40,000 a year the average savings is just $91. The deduction at its current rate is helping upper class Americans buy million-dollar homes, rather than growing the middle class.

The mortgage interest tax deduction is one of the oldest deductions in history and is estimated to reach $100 billion in forgone government revenue by 2014. According to the Congressional Research Service, the deduction is the third largest tax expenditure on the federal budget and lobbyists for the housing industry intend to keep it that way. President Obama’s several attempts to lower the deduction from 35% to 28% of mortgage interest payments for Americans in the top income bracket have been shot down.

Please reduce the mortgage interest tax deduction in an effort to increase revenue, avoid the fiscal cliff, and shrink the federal deficits.

Sincerely,

[Your Name Here]

Photo Credit: truthfullending via Yahoo

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2 Comments

  1. It seems that the wealthy are always eligible for breaks, loopholes and bonuses, while the rest of us have to pay our fair share for everything.

  2. justanotherguy says:

    There is great interest in boosting home prices, this effects everyone else negatively.
    Stop the huge promotion of the american nightmare and bring home ownership back to reasonable debt levels and return it to an american dream.

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