The fiscal-cliff compromise on New Year's Day made substantial
changes to existing tax law and permanently implemented a number of
decade-old tax breaks for the vast majority of taxpayers. Yet even
though some lawmakers have argued that the tax increases they agreed to
marked the full extent to which they were willing to concede for the
sake of higher government revenue, many believe that further revenue-generating measures may come in future battles over sequestration, the debt ceiling, and the passage of a federal budget.
One place that many policymakers have looked to as a potential source of revenue
is to eliminate the mortgage interest deduction. With the housing
market having suffered so greatly in the past five to seven years, fears
that taking away the deduction would lengthen housing's decline
deterred lawmakers from seriously considering cutbacks on mortgage
interest. But if there were ever an ideal time to get rid of the
deduction, it's now, because a number of factors are lining up perfectly
to make its disappearance as painless as it's ever going to be. (more)
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