Columbia SC mortgage tax deductions could be going away, all thanks to Congress’s new federal debt ceiling plan.
The compromise legislation created an unusual mechanism — an evenly split, 12-member bipartisan supercommittee — that could call for major cutbacks on real estate write-offs by Thanksgiving. All it will take is a single vote by a lone senator or House member who breaks with his or her party to put the mortgage interest deduction into serious play.
The legislation signed by the president Aug. 2 calls for a two-step increase in the federal debt ceiling plus spending cuts of about $917 billion. It also created the Joint Select Committee on Deficit Reduction to slash an additional $1.5 trillion from the deficit over the coming decade.
The committee is required to vote on a plan to achieve these objectives by Nov. 23, using revenue increases, spending cuts or a combination. If the committee members cannot agree on a plan, or if either chamber of Congress votes it down, automatic and severe spending cuts of $1.5 trillion will be imposed equally on the Department of Defense and domestic programs including Medicare provider payments.
After decades of being considered politically protected, why are Columbia SC mortgage write-offs suddenly on the chopping block? Sheer size is the No. 1 reason. The congressional Joint Committee on Taxation estimates that the home mortgage interest deduction will cost the federal government $100 billion during fiscal 2011 and $107.3 billion in 2012. Between 2008 and 2012, the cumulative write-offs for mortgage interest are projected to total just under half a trillion dollars.
Defenders of the write-offs argue that high levels of homeownership are essential to economic growth and social stability and fully justify the tax system preferences they receive. National opinion polls regularly find widespread support for the write-offs, even among renters.
Critics, on the other hand, consider the write-offs inherently unfair, saying they’re skewed to benefit upper-income owners disproportionately.
Where is all this headed? Columbia SC mortgage write-offs could be in greater political jeopardy in the next three months than they’ve been at any time in the past 25 years. Stay tuned to our blog and we’ll keep you updated on where all of this may shake out, and just how it may affect your Columbia SC mortgage write-offs.