Save the mortgage interest deduction
California tax policy tends to travel in the direction opposite the economy. Just when hiring, spending and home values are leaning on the ropes for support, Sacramento delivers a sucker punch after the bell.
State legislative analysts used this traditionally slow news week to suggest reducing or eliminating homeowners’ ability to deduct mortgage interest from their state income taxes.
While the deduction certainly benefits high income earners – it is good for up to $1 million loans and lines of credit – there are plenty of people struggling to make $400,000 mortgages who hardly qualify as “rich.” With the foreclosure crisis, variable interest rate loans adjusting higher and a tight credit market all swirling, this is not the time to toy with one of the few decent tax deductions offered to working and wealthy families alike.
There is no reason for taxpayers to buy into a fiscal “emergency” that doesn’t exist. Taxpayers see little return on their investment no matter how much they hand over to the state. Despite the billions taken annually from taxpayers, the state has failed to provide decent roads, adequate schools, enough prison beds or responsible economic planning.
We see no reason to reward failure with higher taxes.
Bad times like these should be viewed as an opportunity to lower taxes and spark growth, hiring and spending and reverse the tax policies that drove so many people and businesses from California. Home ownership should be encouraged, in order to build stable communities in increasingly unstable times.
We have a New Year’s resolution for Californians: Deduct any politician from office who toys with the tax break on mortgage interest.