Barney Frank says mortgage interest tax deduction is safe
Rep. Barney Frank (D-Mass.) said at a House subcommittee hearing Thursday that the mortgage interest tax deduction would be safe.
Currently, interest on a mortgage taken out to buy or improve a home can be fully deducted if the amount of the loan is less than $1 million for married couples and $500,000 for singles. Home equity loans taken out for anything else is limited to $100,000 for couples and $50,000 for singles.
But when President Obama released his 2012 budget, the deduction considered a "sacred cow" to homeowners and many trade groups became endangered. Obama proposed an across-the-board 30% cut to itemized deductions for high-income taxpayers.
But Frank, who was later backed by freshman Rep. Michael Grimm (R-N.Y.) said the deduction would be safe.
"The mortgage interest deduction is going nowhere," Frank said. "The sun will go away before it does."
Frank went on to say that he doesn't think there are enough votes in the House to abolish the deduction and that it will be a corner stone to the future of housing finance Congress is attempting to put together.
"If I were starting a new country, I would not have it. I do not think it is ideal tax policy," Frank said. "Given the extent to which people's legitimate, vested interest include that, trying to abolish it now, even if we were in a wonderful economy would be unfair. You cannot do it without being disruptive to people. Houses are still a large part of the wealth for many people. I think it's important for people to know that that's staying around and we can build on that."
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