Attention, Lawmakers: Taxpayers Oppose Ditching Mortgage Interest Deduction

Homeowner opposed to elimination of the MIDAbout 38.5 million Americans claim the mortgage interest deduction every year, saving each of them about $3,000. Image: Dan Brandenburg/iStockphoto

Tax Day is behind us, but if some Washington policymakers get their way, so too might be many popular tax breaks, such as the mortgage interest deduction, which saves the itemizing American household about $3,000 per year. Several budget plans and proposals to reduce the federal budget deficit include eliminating or dramatically curbing the MID.

A new USA Today/Gallup poll shows that a clear majority of taxpayers oppose eliminating tax deductions like the MID:

  • 61% of respondents, asked if they would support eliminating certain deductions to help lower the overall federal income tax rate, said they oppose jettisoning the MID.
  • 60%, asked if they would support excising certain deductions to help reduce the federal budget deficit, said they oppose cutting the MID.

And why shouldn’t they? Roughly 38.5 million of the nation’s 75 million home owners claim the MID on their tax returns.

Even taxpayers who don’t itemize their income tax returns understand the important role MID and home ownership play: About half of the poll respondents who don’t claim the deduction would oppose its demise. That makes sense, given the fact that renters might see higher rental rates if their landlord’s cost to own real estate goes up.

Despite this widespread taxpayer support for the MID, proposal after proposal—from President Obama’s bipartisan National Commission on Fiscal Responsibility and Reform, charged with reducing the federal budget deficit; to House Budget Chairman Paul Ryan’s fiscal year 2012 plan; to a new deficit-reduction commission announced recently and chaired by Vice President Joe Biden—seems to be gunning for this popular tax break.

Policymakers take heed: U.S. taxpayers—homeowners and renters alike—want to keep the mortgage interest deduction.

What’s your take on this issue in light of federal budget woes?