On my radio show last week, Speaker Paul Ryan declined to debate with me the merits of eliminating or capping the tax deduction on home-mortgage interest. He did it with a chuckle, noting that he and I had crossed verbal swords on this subject many times.Trump wants to loudly proclaim that he cut taxes but he is not a small government man. He needs to sneak tax hikes elsewhere to keep the cash floating into the government coffers. Keep in mind, Trump is fundamentally a street hustler with no principles. He will work any angle he can.
We have, but it does not seem to me that the speaker, many of his congressional colleagues or the larger group of what I call “Wall Street Journal Republicans” actually hear what defenders of that deduction are saying. Nor do they seem aware of why other deductions—like those for state and local taxes and charitable contributions—mean so much....
The day after President-elect Trump announced Steven Mnuchin’s nomination, the Treasury secretary-designate casually declared on CNBC that the administration’s plan would “cap mortgage interest, but allow some deductibility.” That instantly energized the 1.2 million-strong National Association of Realtors against the tax reform. More important, it set in motion a bloody battle with the core of the GOP base: people who own their own homes...
A tax reform that gouges every homeowner—why? Who ran on the platform of devaluing homes? Who gave a campaign speech that said “I will eliminate the home mortgage deduction”? No one did. Instead they rightly campaigned on tax reform and simplification. That is not a mandate to strike at the heart of the American dream, or to play in half-truths about “capping” it only for the wealthiest, when the real effect would be a trickle-down markdown of home values.
The home interest mortgage deduction will probably stick but he will do even sneakier tax hikes for sure.
Remember Wenzel's Tax Law: Never trust any tax "reform," Taxes should be cut from the current structure without focus on changing the structure. Restructuring is a scam,