San Diego Real Estate & Future Appreciation
In 2007, Rep. John D. Dingell (D-Mich.) unveiled a draft of his "carbon tax" legislative reform package. Part of this draft legislation was a phase-out of the mortgage interest deduction on large homes. The phase-out schedule for the mortgage interest write-off begins with houses of 3,000 square feet, which would lose 15 percent of their deductions. The proposal ends with houses of 4,200 square feet and larger, which would receive no deductions at all. With the housing market stabilization, it seems likely that some type of "green, carbon tax" legislation will be implemented, not necessarily to help the environment, but as a guise for increasing taxes to pay towards our enormous spending deficits.
Now the Obama administration has proposed cuts in the mortgage interest deduction. Obama wants to limit mortgage interest write-offs for upper-income households.
Under the Obama plan, deductions would be capped at a 28 percent tax rate, even if the taxpayer is paying taxes at a 35 percent marginal rate. Plus, if this goes through, how fast would California and other "tax & spend" states be to revise their state tax codes to align with the federal code?
This will be a real body blow for housing appreciation. Mark my words, if passed, this is just the first step towards total elimination of the mortgage interest deduction.
httpv://www.youtube.com/watch?v=Nfwo57YcVOY