Tax panel seeks cap on break for homeowners

By Christopher Swann in Washington
Published: October 11 2005 21:45 | Last updated: October 11 2005 21:45

The president's panel on tax reform is pushing for a cap on the mortgage interest tax deduction, long considered one of the country's untouchable tax breaks.

The loophole, which along with other tax breaks for homeownership costs the US Treasury about $100bn (€83bn, £57bn) a year in lost revenue, disproportionately benefits wealthier Americans.

George W. Bush had instructed the panel upon its formation to take account of “the importance of homeownership and charity in American society”, a statement that led some to suggest that tampering with existing generous incentives for property ownership would be taboo.

But in the final weeks of its deliberations it is leaning towards curbing the tax privileges of higher-end homeowners.