Difficult conundrum

Over lunch recently my brother and I were discussing current events, mainly the budget deficit and the cuts being contemplated to reduce it. We agreed that Big Business had a stranglehold on Congress, getting pretty much what they wanted in the way of tax breaks, special deductions, regulatory loopholes, etc.  We should do away with things such as subsidies to very profitable companies who could easily fund their own R&D on what was likely to be even more highly profitable technologies, subsidies to agribusiness, and so forth.


But then I said (and remember, bro and I are custom homebuilders) the government should begin phasing out the home mortgage interest deduction.  Whoa!  It was like somebody farted in church.  "How dare you!  That's MY deduction", he said.  "Why would anyone own a house if they didn't get their deduction?"  I asked if, when he got his last house paid for, he suddenly didn't want it anymore?  *silence*


And that's the problem.  Everyone wants everyone else to give up their special breaks, but they don't want to give up their own.


Back to my example:  [I believe] the US is the only industrialized nation who still offers a home mortgage interest deduction.  The idea was to promote home ownership, but I contend it's now "the American Dream" and doesn't need promoting any longer.  In fact, you'd be surprised how many homes sold today are purchased with cash.  By paying cash buyers don't get a tax write-off, but they're buying anyway.


Australia phased out their similar deduction years ago and ownership remained steady at around 65%, the same as it is here.  Remember several decades ago when the interest deduction on auto loans and consumer loans was phased out?  Did we stop buying cars without the interest deduction?  Of course not.  Did we stop using our credit cards because we couldn't write off the interest we paid MasterCard any longer?  Hahaha.  Hardly!


It's going to be painful, but we ALL need to wean ourselves off of our special deductions and start paying enough in to cover what we're paying out.  Sorry rich folks, but that means you, too.  


S