My understanding of their recommendation was that the deduction was to be reduced from $1 million to a non-arbitrary number based on the value of properties in each area.
While I have misgivings (serious misgivings about their non-arbitrary number) I don't see any problem with the reduction of the maximum deduction that can be made based on the interest on a mortgage.
This means that aside from people in the top economic stratosphere, this won't affect most Americans. What it will probably do is depress the development and sale of ultra expensive vacation homes and large investments in expensive properties by wealthy people looking for an investment that comes with a tax break.
Everyone else with properties whose interest on their mortgages won't exceed the maximum deductible, which is pretty much everyone but the really wealthy few, won't feel a thing.
Of course - a flat tax system with no deductions would be much, much nicer.
I dislike the "fair tax" system for the same reason that I dislike the idea of a calculation for determining a person's maximum deductible on a mortgage. I don't like the idea of combining government and complexity. It always seems to spawn bureaucrats and eventually the invisible corruption we only find out about after millions or billions have been wasted, stolen, or lost. And this doesn't just happen in government.
Really? When was the last time you received a paycheck from a poor man?
"this won't affect most Americans"
then the panel really DIDN'T do its job!