Big Shock: Americans Like the Mortgage Interest Deduction

 

Link: http://blogs.wsj.com/developments/2010/09/22/big-shock-americans-like-the-mortgage-interest-deduction/

Original Post Date: September 22, 2010

By: Dawn Dakota

As pain from the housing crash drags on, the nation’s leaders are struggling to fix the broken housing model. The mortgage interest-rate deduction, long used as a way to encourage homeownership, could be in trouble. Ideas being thrown around include capping income limits for recipients or the amount of the qualifying mortgage. There’s even a slim chance the deduction could eventually go away.

As we’ve reported, the deduction for owner-occupied homes is estimated to cost the government some $100 billion a year, making it the largest government subsidy for housing and one of the most expensive tax deductions. Mark Zandi, a well-known economist, has suggestedthat the housing industry push to limit it.

But the bulk of Americans want the deduction to stick around, according to a nationwide survey of likely voters commissioned by the National Association of Home Builders. (We can’t say there’s much surprise there.) The survey released Wednesday found that 79% of respondents – both owners and renters – believe the federal government should provide tax incentives to promote homeownership.

“These poll results show strong national voter support for keeping the mortgage interest deduction that cuts across gender, age, partisan, ideological, educational and regional lines,” says Neil Newhouse, a partner at Public Opinion Strategies, which conducted the survey. “In fact, voters overwhelmingly say they would be less likely to vote for a candidate for Congress who supported either eliminating or reducing the home mortgage interest deduction.”

The NAHB issues politicians a warning: “As the midterm elections draw near, voters are sending a resounding message to Congress and the Administration: Don’t meddle with the mortgage interest deduction or other tax incentives that support home ownership,” says Chairman Bob Jones, a home builder from Bloomfield Hills, Mich.

Public Opinion Strategies conducted the survey from Sept. 9 through 12. It included 800 likely voters and has a margin of error of 3.6%.

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