Mortgage

Treasury secretary: Tax reform won’t end mortgage interest tax deduction

Here's what will change

U.S. Treasury Secretary Steven Mnuchin said the mortgage interest tax deduction will not be changed in the Trump administration’s tax reform, according to an article in Reuters by Eric Beech.

From the article:

"Let me first clarify, we are not taking away the charitable deduction and we are leaving the mortgage interest deduction as is," Mnuchin said in an interview on Fox Business Network.

"We think those are both very, very important. But what we are going to do is we are looking at other things where the reduction in deductions will offset the rate," he said.

The tax deduction was brought up as an issue this past election season when House Republicans proposed tax reform that would make the mortgage-interest tax deduction irrelevant for most Americans.  

However, the debate around the tax deduction goes further back than this.  

Nearly four years ago, Mark Calabria, who was director of financial regulation studies with the Cato Institute at the time, sat before the House Committee on Ways and Means discussing the issue.

At the time, Calabria said that the tax code reflects a bias, and instead, it needs to be focused more carefully on the people who need it.

"If we care about home ownership, we should not be tying it to a mortgage. We should be tying it to homeownership," he said. As a reminder, Mark Calabria now serves as the chief economist to Vice President Mike Pence.

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