The Wholly Grail: Interest Rate Deductions
By: Myles, March 4th, 2009
All bets appear to be off. Clearly there has been a huge changing of the guard. The president’s budget seeks to raise $318 billion over the next decade the value of itemized tax deductions for the wealthy (or least as they define wealthy) — including interest paid on home mortgages, which was heretofore deemed untouchable.
The proposal: Households that currently pay income taxes at the 33% and 35% rates would only be able to claim deductions at the 28% rate.
The result: That means that for every $1,000 in deductions, a household in the top tax bracket would realize a tax savings of $280, down from the current $350. The proposal wouldn’t take effect until 2011.
The details and the debate: For a full review of this critical real estate issue, see the New York Times article just published. Stay tuned ….
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