Details about the Republican Party's latest platform are starting to trickle out as the GOP approaches its convention. And the party has made one small but noteworthy change to its position on taxes: Bloomberg reports that the GOP has taken out language defending the mortgage-interest tax deduction, which costs the government almost $100 billion a year and overwhelmingly benefits the top 20 percent of Americans. It's especially notable as Romney has explicitly defended keeping the tax break, although he'd tweak it marginally.
In 2008, Bloomberg notes, the GOP platform explicitly defended the mortgage-interest deduction, arguing it was necessary “because affordable housing is in the national interest, any simplified tax system should continue to encourage homeownership, recognizing the tremendous social value that the home mortgage interest deduction has had for decades.” But the committee drafting this year's GOP platform ultimately decided against including the language again, after some members argued that it detracted from their call for a simpler, fairer tax code, Bloomberg reports:
A Romney campaign adviser, former Senator Jim Talent of Missouri, urged delegates to reject the mortgage-interest plank to avoid muddying the call for a simpler tax system....“What we have now on tax reform and tax relief is a very powerful statement of principle” that is “in favor of a tax system that is simple, transparent, flat and fair,” Talent said. Platform drafters should “avoid getting into specific areas of the code” because “that would take away from the power” of the existing statement, he said.
This doesn't mean that the party's gunning to get rid of the mortgage-interest deduction any time soon. Removing the language may, in fact, help the Republican Party drive home the message that it's committed to tax reform, as Talent suggests. But Romney has suggested that he'd largely preserve the mortgage-interest deduction, excluding it from the (yet to be specified) loopholes that he plans to close to support his tax plan.
"I have noted before my commitment to preserve tax preferences for middle-income taxpayers such as homeownership, charitable giving and health care," he told Fortune in a recent interview. Romney has promised to get rid of the tax deduction for second homes, but that would only save about $10 billion annually from a tax break that costs the government $100 billion a year, according to the Tax Policy Center.
Overall, the mortgage-interest deduction overwhelmingly benefits wealthier Americans, as The Atlantic's Matt O'Brien has explained and illustrated:
But that's just the kind of complication that comes up when you start getting specific about reforming the tax code. So it make sense that the Republican Party would be inclined to take such potential sticking points out of its tax platform.