Recently I wrote a letter to Senator Feinstein which expressed my concerns over the topic of changing/ restructuring the way the government allows tax payers to write off their mortgage interest. I wrote to her as a homeowner as well as a Realtor and took a conservative position. A position that I will not share here, but I will share Mrs. Feinstein's reply (below). I added the back links so you could research the Acts.
Thank you for contacting me to express your concerns about proposals to limit the mortgage interest tax deduction. I appreciate the time you took to write, and I welcome the opportunity to respond.
As you know, Congress is currently debating ways to increase revenue and cut spending in an effort to address our national debt. One proposal to raise revenue would limit the value of itemized deductions, specifically for high income earners. President Obama proposed limiting the mortgage interest deduction in his Fiscal Year 2013 (FY2013) budget as part of an effort to reduce federal tax expenditures and address our growing debt and deficit. It is important to know that his proposal would have only reduced the deduction for individuals who earn over $200,000 and married couples filing jointly who earn over $250,000.
Congress voted on January 1, 2013 to pass the "American Taxpayer Relief Act" (H.R. 8), which temporarily averted sequestration spending cuts required by the Budget Control Act (Public Law 112-25) and prevented the implementation of significant tax rate increases on middle class Americans. Specifically, this legislation permanently maintains current tax rates for all Americans on income under $400,000 for individuals and $450,000 for couples. This legislation did not create new limits on deductions, though it is important to note that it did reinstate the Pease provision, which will, in effect, limit the value of tax deductions for certain upper income earners. It is also possible that future negotiations to reduce the debt will include proposals to limit tax deductions.
Like you, I strongly believe the federal government must do more to help distressed homeowners and stabilize the housing market. I am also concerned that with home prices in California high relative to the rest of the country, proposals to limit this deduction– depending on how they are structured – could disproportionately impact middle class Californians. Please know that I have made careful note of your support for this deduction, and I will keep your thoughts in mind as I work with my colleagues to address our national debt in ways that do not unduly harm California homeowners.
Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841, or visit my website at http://feinstein.senate.gov. Best regards.
United States Senator
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