As we all know, Congress isn’t exactly enacting tons of legislation these days. We’re not really sure what those DC folks have been up to lately, besides possibly achieving the least productive Congress award. No, that isn’t a real award, but statistically speaking, that’s where this group of lawmakers is headed. Clearly, politicians don’t want to be remembered for the things that they didn’t do and failed to achieve.
However, there is now buzz that “discussions in Congress about a broad tax overhaul are heating up.” At least they are doing something, even if that something is just discussing the things they should actually be doing. Regardless of where you fall on the socioeconomic and/or sociopolitical spectrum, the fact of the matter is our tax code is COMPLICATED, so some sort of overhaul isn’t a bad idea.
Among the current topics of discussion, Congress is considering whether it should eliminate or curb the mortgage-interest deduction. Obviously, there are advantages and disadvantages to keeping it in its current form or eliminating it altogether. If lawmakers do eliminate it, we hope that they have the economic sense to replace it with other financial incentives to encourage homeownership and make it affordable for average earners.
After all, for the middle class, home equity comprises a very large portion of their overall wealth. Without incentives to purchase a home, there could be a permanent, detrimental impact on the real estate market. For high earners, on the other hand, investment portfolios tend to be larger and more diversified, so the elimination or replacement may not have such catastrophic consequences. Regardless, we would hate to see hardworking, middle-class Americans unable and unwilling to keep their homes or invest in real estate. If you are a homeowner or hope to be one, just be sure to pay attention to those DC “discussions.”