On November 10, 2010, Erskine Bowles and Alan Simpson, chairmen of President Obama’s deficit reduction commission, presented suggestions for spending cuts and tax increases to the 18 member group.
Several personal income tax changes were included in the package. One proposed eliminating all current deductions in exchange for sharply lower rates. The two biggest are the home mortgage deduction (the subject of this post) and employer provided health insurance.
The IRS has released its preliminary report on personal income tax returns for 2008. About 140 million individual tax returns were filed in 2008. (All numbers are rounded off for ease of reading.) Of these, 92 million (66%) took the standard deduction, totaling $699 billion. The remaining 38.5 million (34%) took MID of $462.5 billion.