Mortgage Interest As Vehicle For F**king the Blue States
See, it goes like this: Right now you get to deduct your mortgage interest on debt up to $1,000,000--that's across the board, anywhere in the nation. But the new proposal would limit your deduction to just that debt that is less than or equal to the FHA loan limit in your area (varies by county). The problem is in areas where home prices are well above the highest FHA limit, $312,895 in coastal California, New York, and Massachusetts. See the problem? If you're in...say...San Diego Co. with a median home prices above $500,000, a whopping 33% your mortgage deduction could evaporate. San Francisco is even worse. The median there is almost $700,000.
But if you're a Red Stater...no problem. In President Neuman's home state for example, the highest median home price is about $149,000 in Dallas, well below the state-wide FHA limit of $172,000. So there you go. Bush is looking out for you red-staters while his tax advisory council finds new and creative ways to screw the rest of us.