In November 2011 Romney told Hugh Hewitt, here, that it was not a good time to eliminate the mortgage interest deduction in view of the problems in the housing sector:
My own view is that the idea of limiting deductions in the way the Bowles-Simpson panel recommended makes a good deal of sense. I’d like to see us have lower tax rates, and have a broader base. And it sounds like their idea is looking for a way of doing that. I must admit, I don’t think that this is a great time to be eliminating the home mortgage interest deduction. We obviously have a lot of trouble in the housing sector right now, but I haven’t seen their proposal. It may work just fine, but I just haven’t seen it, so I wouldn’t want to comment on that. But the home mortgage interest deduction right now is something that I think we need to keep in place.
But by February 2012 it had become a good time to eliminate the deduction, at least for the rich, a position identical to Obama's, as noted here:
“In order to limit any impact on the deficit, because I do not want to add to the deficit, and also to make sure we continue to have progressivity in our tax code, I’m going to limit the deductions and exemptions, particularly for high-income folks,” Mr. Romney, a former governor of Massachusetts, said.
Reiterated in April at a private fund-raiser as reported here, the idea suddenly had become toxic again, enough to merit walkbacks from his advisers, reported here:
Senior advisers to Mitt Romney said Monday that Mr. Romney, the presumptive Republican nominee for president, was merely tossing around ideas, not making policy announcements, when his chat with donors about some significant changes to the tax code was overheard by reporters at a fund-raiser this weekend.
When it comes to Mitt Romney, we all know that there's no there there on any number of issues. But it is especially disturbing that neither Romney nor Obama seem to grasp the scope of the damage their shared idea of eliminating the mortgage interest deduction for the wealthy would cause to the American economy.
Wayne Allyn Root explains, here:
If you think the housing market is in trouble now, wait until the home mortgage interest deduction is eliminated for upper income homeowners.
From Manhattan, Great Neck, and Scarsdale, to Boca Raton, Scottsdale, and Brentwood, home prices in upper class neighborhoods from coast to coast will drop by about 35% overnight. That 35% number is not a guess, it’s automatic.
Today, if you’re in the top bracket, you deduct 35% of your mortgage interest off your tax bill. If tomorrow you can’t, your home is worth about one third less.
That's how economics works.
Unless Obama manages to also raise the top income tax rate to 40%. Then, when you lose your mortgage deduction your home will drop by about 40% overnight. Can you imagine the carnage to the housing market if this happens?
Obama's economic theories just don't compute. He believes that if you take away more of rich people's income through tax increases, and take away their deductions so that the value of their net worth collapses, that will be good for the economy.
He thinks if you take away rich people's money, consumer spending will somehow increase. Even though the facts are that the top 2% of income earners produce over 30% of U.S. consumer spending, while the top 5% produce 40% of consumer spending.
Just as a rising tide lifts all boats, a tsunami wiping out values at the top end of the housing market can only swamp values at the low end.
Six years after the collapse in housing began, we still have no leadership on the most significant economic problem facing Americans at all income levels.
