Rep. Keith Ellison (D-MN) has introduced H.R. 948, a piece of legislation calling for modest reforms to the Mortgage Interest Deduction. By reducing eligibility for the Mortgage Interest Deduction from the first $1M of home indebtedness to the first $500,000 of home indebtedness, the government would realize a savings. A portion of that savings would be diverted to increase the amount of tax credit allocation for the Low Income Housing Tax Credit, 60% of the remaining revenue would go to the Housing Trust Fund, 30% of remaining revenue to rental assistance (either in the form of a new renter’s tax credit or any HUD or RD program).
There are currently no co-sponsors and no companion legislation in the Senate. In a republican-controlled congress, it may be unlikely that this legislation moves forward. This is not to say the topic of reforming the Mortgage Interest Deduction is not also being discussed in conservative circles. The Hill recently published an article on the topic written by Mark Calabria and Diane Yentel. Yentel serves as CEO of the National Low Income Housing Coalition, and, at the time, Mark Calabria served as the CATO Institute’s Director of Financial Regulation Studies. Calabria called for a complete elimination of the deduction. In the month since the article was published, Calabria was hired by Vice President Mike Pence as his chief economist.
The United for Homes Campaign has provided a fact sheet on the legislation and interested parties are encouraged to contact their members of congress and join the campaign.
