Most of us have heard by now that our Governor is proposing that the Mortgage interested deduction be eliminated. I’m certain that there is a good argument to support doing away with this deduction and lower or state income tax rate. However, I think the broader implication is what will happen at the federal level once the states start to eliminate this deduction. Below I have some information provided by the Kansas Association of Realtors.
More than two-thirds (67%) of Kansas say that eliminating the home mortgage interest deduction would have a negative impact on the Kansas housing market and the overall Kansas economy.
Tax Benefits of the Kansas Mortgage Interest Deduciton:
Mortgage Amount of Deduction Current Kansas State Income Tax Benefit
$300,000 $15,000 $969.00
$250,000 $12,500 $807.00
$200,000 $10,000 $646.00
$150,000 $7,500 $484.00
$100,000 $5,000 $323.00
After hearing a brief description of the Governor’s plan, 63 percent of Kansas oppose eliminating the home mortgage interest deduction as part of a bigger plan to cut state income taxes. Opposition to the plan is intense with 41 percent “strongly” opposed to the plan compared to only 14 percent of Kansas that strongly support the plan.