Mortgage Interest Deductions

In today's on-line version of the New York Times came an interesting proposal.  Eliminate the deduction of mortgage interest on your taxes.  Of course, in the political world, that is like talking about changing Social Security, the mortgage interest deduction is the sacred cow of tax planning.

But I suggest you read it.  I recall during the real estate financing boom I would receive direct mail pieces from, oh, let's see Countrywide, Citibank, Wells Fargo, Bank of America, among many others, who trolled the public records, saw the mortgage on the house, saw it wasn't re-financed.  They tried to lure me with suggestions that I re-finance to "reduce" my credit card interest rate and oh by golly, the interest on mortgages was deductible!  

Almost every other country does not allow home mortgage deductions from income taxes.  Yet, home ownership rates in countries like Canada and many in Europe, are as high as the United States.

While I do not think an income tax deduction is the sole reason people by houses, I also believe proposals like this, re-examining the sacred cows, are good for us.  Whether it all pencils out is another matter.  It is challenging the paradigm, as a friend would say.  And in these times, we need to be doing just that.