In last night’s presidential debate, the highly sensitive topic of tax deductions from mortgage interest and other expenses resurfaced when the moderator asked GOP Candidate Mitt Romney to clarify his position.
Romney has said he would limit deductions, combined with an across-the-board decrease in the tax rate, as part of his overhaul of the tax code.
Romney proposed a cap on all deductions, but gave no specific figure.
“I’ll pick a number – $25,000 of deductions and credits, and you can decide which ones to use,” Romney said.
President Obama has attacked Romney for lacking details in his plan to reduce tax breaks and credits to compensate for a broad tax-rate cut.
There is growing concern that the venerable mortgage-interest deduction would be slashed.
As millions of borrowers refinance and the housing market recovery gains strength, the mortgage-interest tax break has become a major point of contention.
The home mortgage interest deduction allows homeowners to reduce their taxable income by the amount of interest paid on the loan, which is secured by their principal residence
Moderator Candy Crowley asked Romney about his position on the various tax deductions, including those on mortgage interest, charitable donations and education.
Here is Romney’s response:
Now, how about deductions? ‘Cause I’m going to bring rates down
across the board for everybody, but I’m going to limit deductions and
exemptions and credits, particularly for people at the high end,
because I am not going to have people at the high end pay less than
they’re paying now.
The top 5 percent of taxpayers will continue to pay 60 percent of
the income tax the nation collects. So that’ll stay the same.
Middle-income people are going to get a tax break.
And so, in terms of bringing down deductions, one way of doing
that would be say everybody gets – I’ll pick a number – $25,000 of
deductions and credits, and you can decide which ones to use. Your
home mortgage interest deduction, charity, child tax credit, and so
forth, you can use those as part of filling that bucket, if you will,