US tax panel urges mortgage interest deduction cut

Reuters reports:

A blue-ribbon panel appointed by U.S. President George W. Bush will recommend voiding most tax deductions and lowering tax rates to make the U.S. tax system simpler and more efficient, its chairman said on Tuesday.

"We're going to eliminate almost every deduction presently in the tax code," the panel's chairman, former Florida Republican Sen. Connie Mack, said in an interview on Bloomberg Television.

The panel, which was created in January, 2005, will present its recommendations to Treasury Secretary John Snow later in the day. Snow said on Monday he expects to review the proposal and forward it to the White House by the end of the year.

The panel would lower the ceiling of mortgages on which taxpayers could claim deductions for interest to between $400,000 and $425,000 from around $1 million, Mack said. The panel will also suggest providing a credit -- as opposed to a deduction -- for mortgage interest.

"Today, less than 30 percent of American taxpayers take advantage of the mortgage interest deduction. Under our proposal, everyone who has a mortgage will get a benefit," Mack said.

It looks like the big Blue states with those high taxes are going to get whacked.