The president’s budget takes on what has long been considered a sacred cow by trying to reduce the mortgage-interest tax deduction for top earners.The president’s budget seeks to raise $318 billion over the next decade by lowering the value of itemized tax deductions for the wealthy — including interest paid on home mortgages. Households that currently pay income taxes at the 33% and 35% rates would only be able to claim deductions at the 28% rate. That means that for every $1,000 in deductions, a household in the top tax bracket would realize a tax savings of $280, down from the current $350. The proposal wouldn’t take effect until 2011.
By Nick Timiraos, Feb 27, 2009, WSJ

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