Romney Takes On the Rich!

Like a good liberal, I feel a tiny pang of guilt when I do my taxes every year and see how much the government is subsidizing my choice to buy a home. Not that I'm going to turn it down as long as it's in place, but the mortgage interest deduction is not easy to justify. Even if there are reasons to believe that homeownership is a good thing, that doesn't necessarily mean that the government should pay you thousands of dollars to do it, particularly when you were probably going to do it anyway.

Mitt Romney is down to a modest three homes these days (the house in Boston, the lake house in New Hampshire, and the beach house in La Jolla; he got rid of the ski lodge in Deer Valley and a second Massachusetts house), but that didn't stop him from suggesting that we might consider eliminating the mortgage interest deduction for second (and third and fourth) homes. The idea was quickly attacked from multiple sides (unsurprisingly, the National Association of Realtors, one of the most powerful lobbying groups in Washington, is adamantly opposed), and the Romney campaign made sure reporters knew he wasn't really proposing anything, he was just tossing around some ideas that he might or might not actually be interested in enacting.

Which is perfectly fine—it would be a much more interesting campaign if candidates felt free to raise issues without having to answer for every implication of every notion that came out of their mouths. But in this case, Romney is right! The idea that the taxpayers should subsidize wealthy people's vacation homes (almost by definition, if you've got a second home you're wealthy) is ridiculous. Eliminating the mortgage interest deduction altogether might be politically impossible, what with it being a gigantic middle-class (and upper-class) entitlement that tens of millions of American families enjoy. But why not make it just a little bit more reasonable by saying that everybody only gets to take the deduction on their primary residence?

Eliminating the deduction for second homes wouldn't have a transformative effect on the budget—the estimates being quoted today are that it would save about $8 billion to $10 billion a year. But that's not nothing, either. Nevertheless, I'm guessing Romney will quickly disavow this the next time he gets asked about it.

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