We should do nothing to encourage people to take on more debt, and allowing deduction of mortgage interest is one of the things that has plumped up the housing market for decades.
Buying something on credit should not be given incentives.
NVDave,
I am trying to understand your logic. While it is true that the mortgage deduction (thank you realtors and bankers) has encouraged more debt risk, how does revoking it improve the position of real estate?
It would cause immediate depreciation in the value of real estate to take it away. The current tax system is gamed and so screwed up that only lowering the tax burden makes sense. Raising during this crisis will just worsen the crisis.
No but it lessens the tax burden. In CA you pay a hefty sales tax on a new car.