President Donald Trump’s tax proposal generated immediate backlash from the powerful National Association of Realtors, which frets that doubling the standard deduction to $24,000 will undermine the mortgage interest deduction.
Independent observers say rock-bottom mortgage rates mean the mortgage deduction has become meaningless to all but the most affluent homeowners.
When Treasury Secretary Steven Mnuchin took the stage Monday at the Milken Institute’s Global Conference in Los Angeles, he offered only the vaguest of responses to Realtors’ concerns.
“With regards to the mortgage interest, that’s kind of like apple pie,” Mnuchin told interlocutor Maria Bartiromo. “Owning a home is something that’s been part of the American dream, and we want to keep it that way.”
Mnuchin has been the chief spokesman for Trump’s tax proposal, which includes rate cuts and the boost to the standard deduction, which is at $12,700 for married couples in 2017.
“With the increase in the standard deduction, there will be a significant part of the population that doesn’t pay taxes,” Mnuchin said. “So although the lowest tax rate is 10 percent, the lowest effective rate will be zero.”