In this CNN article Bush: ‘Don’t worry about mortgage deduction’

_Answering a question from a home builder during a question-and-answer forum in Florida, Bush said, “I don’t think you have to worry about the mortgage deduction not being a part of the income-tax law.” In November, a tax reform panel appointed by the president submitted a report that recommended putting limits on the mortgage interest tax break in two ways:_

* _Lowering the mortgage-interest cap, which is the amount of a loan on which homeowners would receive a tax break for interest paid. The panel suggested lowering the cap from $1 million to the average regional home price, in the range of $227,000 to $412,000._

* _Converting the mortgage interest deduction to a tax credit equal to 15 percent of interest paid on mortgages up to the cap._

Bush seemed to settle concerns that the mortgage rate tax deduction, the bedrock of the housing market, would be introduced. The [removal of the deduction](http://money.cnn.com/2005/11/01/pf/taxes/tax_proposals/index.htm) idea had come up initially as a way to quickly offset lost revenue from the Alternative Minimum Tax that was going to be phased out.

I still have a problem with the contradiction coming from the government regarding this issue. Housing has always been a centerpiece of economic stability and servcies relating to homeownership has been a key driver of the economy. [Homeownership has reached an all time high of 69.2% of Americans [WSJ]](http://online.wsj.com/article_print/SB114005649301375476.html). Seemingly everyone has bought into that ideal.

With a weakening housing market, the loss of the mortgage deduction at this point could become a flash point causing far more damage than would have occured if the market was still in the middle of a housing boom. It has been said that the loss of the deduction could drop housing price levels 10% to 15% overnight. With all the problems Bush has had in the polls in recent months, he seems to have decided its a fight not worth pursuing.

Plus he would lose his [deduction for his ranch [Google]](http://cryptome.org/bush-ranch.htm).

* [More On The Sacred Cow: Mortgage Tax Deduction Recommendation Goes To The President [Matrix]](http://matrix.millersamuelv2.wpenginepowered.com/?p=203)
* [Those Evil Hamburger Eating Rich, The Tax Panel Wants Their Fair Share Of The Sacred Cow [Matrix]](http://matrix.millersamuelv2.wpenginepowered.com/?p=199)
* [Mortgage Tax Deductions May Not Be Thick As A Brick [Matrix]](http://matrix.millersamuelv2.wpenginepowered.com/?p=175)