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WSJ senior economics writer Steve Moore on the significance of the GOP's call to drop mortgage interest rate deductions.
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Isn't -- mortgage interest deduction chairs by the real estate -- they all wife's support.
The platform for the Republican National Convention leaving out a full blown endorsement.
Of keeping that deduction it will disappear if comprehensive tax reform does -- but Steve Moore is -- senior economics writer for the and joining us from Washington DC.
Steve this is a very big is doesn't sound like a big move by the GOP but oh -- -- tell us why.
A person like you know -- and other than they AARP.
The real estate lobby in Washington may be the most powerful lobby in this town south.
Nobody ever wants to take on the real -- the home builders and a mortgage bankers and they have incredible clout.
And that's one of the reasons the mortgage deduction and the tax code has stayed there for 506070.
Years men -- 1986 we tried to get rid of it but nobody can overcome the resistance of the of the powerful housing lobby and why this story is significant vegan is because for the first time Republicans are saying you know what.
If we can do tax reform in 2000 -- turned thirteen or fourteen.
One of the -- options that we might put on the table.
Is.
The mortgage deduction now that's the good news story dig and the bad news is the Republicans moved back a little bit appease the housing lobby base and well only in the context of broad broad reform would we even look at -- eliminating this out subsidies so they still have a lot of influence even in the Republican Party.
It is cherished by many but you can -- off the interest on up to one point one million dollars and -- dad.
With -- ended with your initial mortgage be in a million dollars when the media and home price in this country for existing homes is only a 187000.
Dollars and let's talk now about a lack of products.
So to -- the point is.
This is so way for the GO -- and the Republican Party.
To say you know what we aren't just in the pockets of millionaires if we if we make an attempt to even reduce the amount of mortgage interest that you can -- -- is.
Then diet that that -- that works in their favor.
You have -- a good point -- and I mean it's the big big mansions you know that.
The million dollar plus home so the ones that get the biggest adoptions and -- so that kinda homes that are.
That are purchased by the Donald trumps of the world south.
This is actually a regressive feature of the tax system that the bigger -- of the deduction for the -- saying that about the more of the -- -- -- to the rich people.
The other point -- I think that the key the key point here is if fewer to eliminate the mortgage adoption in the context of a broader tax reform.
Would that hurt the housing market and my answer that -- is no.
I think that if you look at the data it's very clear that what derives the housing market much more than the deduction on the interest payments.
Is whether housing is affordable whether people's incomes are going up.
And I think tax reform is very pro growth that'll lead to more growth in the economy hiring comes and guess what then people him -- bigger house's.
-- that was great to talk to add that one last thing I just want to point -- on the spot.
You know credit card interest used to be deductible and -- Ronald Reagan's tax reform -- do you think.
This will go away or be reduced within the next two years that.
You about the toughest question day and that's a really tell what this is the sacred college you know in the tax deduction so what's the last one congress will get rid of -- -- drain.
Is that next year are all of this pollution all these special interest loopholes are gonna got get get read -- we're gonna go to something like a 20%.
Tax rate it'll be great for the economy and great for housing.
-- good to speak with you at -- way as saying.
We made the mortgage assistance Hudson who make hot top back -- love it Dave Moore on the Wall Street Journal.
