So far, I haven’t found much to agree on with President Obama other than gays in the military and the need for a playoff system for college football. However, I do support the administration’s proposal to repeal the tax deduction for mortgage interest for high-income taxpayers:
The popular tax break for mortgage interest, once considered untouchable, is falling under the scrutiny of policymakers and economic experts seeking ways to close huge deficits.
Although Congress last year rejected the White House’s proposed cut to the amount wealthier taxpayers can deduct for home mortgage interest payments, the administration included it again in its 2010 budget — saying it could save $208 billion over the next decade.
I’m no fan of tax increases. But I also think that government should be neutral between homeownership and renting. Economist Edward Glaeser summarizes the case against the mortgage interest deduction here.
Unfortunately, I doubt that the administration’s proposal will get any more traction in Congress this year than it did last year, when it failed miserably despite the fact that Obama had more clout then than he does now, when his popularity has dropped. Homeownership is popular, and higher-income homeowners and real estate developers have considerable political influence. Moreover, repealing the deduction may conflict with the administration’s (in my view misguided) efforts to prop up housing prices and encourage more lending to home-buyers.
Somehow, I doubt that my backing of Obama’s proposal is going to be enough to overcome the political odds against it. Then again, my endorsement was surely a crucial element in helping the Democrats gain control of the House of Representatives in 2006. I hope the president is more generous in rewarding me for my support than Nancy Pelosi was. Advertising revenue remains low, and we at the Volokh Conspiracy are still waiting for our much-needed bailout.