In recent days, the question has come up on NRO’s the Corner, as well as here and here about what ATR’s position would be on repealing the mortgage interest deduction.
I’ve already responded to the Corner on this, but also wanted to clarify here.
The mortgage interest deduction is not some spending program. It’s a tax cut built into current tax law. To get rid of it and do nothing else is to raise income taxes by about $100 billion per year, every year. This would be a Taxpayer Protection Pledge violation. 172 Congressmen and 35 Senators have signed this no income tax increase Pledge.
Does that mean getting rid of this deduction everywhere and anywhere is a Pledge violation? No.
One could get rid of this tax deduction and lower tax rates. Or, one could get rid of this tax deduction and increase deductions and credits somewhere else. The important thing is that you want to avoid an income tax increase on net.
The criticism that the mortgage interest deduction tends to raise the price of housing and create bubbles is probably true based on what I’ve read, but I’m no economist. In any event, that discussion is outside the bounds of the Taxpayer Protection Pledge, and people of good will can be Pledge-compliant and either agree or disagree with that position.
Hope this clears things up.