One area to watch as pressure comes to balance the federal budget, is cuts in tax deductions. The Wall Street Journalreported that an area. currently under study by the National Commission on Fiscal Responsibility and Reform that was appointed by President Obama, is the elimination or drastic reduction of several tax credits: the mortgage tax deduction, child care credit, and health insurance deduction
The elimination of the mortgage interest tax deduction (or drastic reduction of it), would not be healthy for an already sluggish national housing market. This deduction for owner-occupied homes is estimated to cost the government some $100 billion a year. But the majority of Americans want the deduction to stick arund, according to An independent survey by Public Opinion Strategies. It released the poll at the end of September which showed that 79% of responsents - both owners and renters - believe the federal government should provide tax incentives to promote homeownership.