Among the many ideas to reduce the budget deficit as lawmakers negotiate over closure of tax loopholes and deductions is the mortgage interest deduction for home purchases. That kind of talk alarms home sellers such as Thom Jones the head of the Bloomington Normal Association of Realtors.
Jones says the home market is still fragile, though it is increasingly looking like one of the stronger elements of the economy. Supporters of ending the mortgage deducation say it does not usually make a crucial difference in being able to afford monthly payments. The 83 billion dollars a year given up by the federal government, they claim, does not come from middle class filers, but largely from people making more than $100,000 per year. Less than 23% of all tax filers benefitted from the mortgage deduction because most people do not itemize their deductions.
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