The Senate Finance Committee held a hearing on Thursday to discuss “Individual Tax Reform.” Several witnesses spoke about the need to reform the mortgage interest deduction (MID) - a $70 billion tax expenditure that primarily benefits higher income homeowners.
Chairman Orrin Hatch (R-UT) used his opening statement to assert the Senate’s independent role in developing tax reform legislation. Hatch stated that the Finance Committee is not “anyone’s rubber stamp” and that the “Big 6,” a working group of Republican leaders in Congress and the administration, “will not dictate the direction we take in this committee.”
Although Mr. Hatch did not indicate whether he supports reforms to the MID, Ranking Member Ron Wyden (D-OR) defended the tax break and accused Republicans of “going after…incentives for homeownership.” Evidence shows, however, that the MID has little to no impact on people becoming homeowners.
Iona Harrison, testifying on behalf of the National Association of Realtors, emphasized preserving the MID and other homeownership tax benefits. Several other witnesses urged Congress to reform or eliminate the MID. Alex Brill, a fellow at the American Enterprise Institute (AEI), noted that the MID increases the complexity of the tax code and, like other itemized deductions, is “distortionary and regressive.” Ramesh Ponnuru, a visiting fellow at AEI, argued that eliminating or scaling back the MID could help pay for proposals to expand the child tax credit.
Read statements or view the hearing at: http://bit.ly/2wcsWh7