The Mortgage Deduction Nightmare: How Obama’s Tax Plans Threaten to Wipe Out the Upper Middle Class

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By Wayne Allyn Root, Former Libertarian Vice Presidential Nominee

 

 

Why is Obama trying to ruin the lives of millions of small business owners and upper middle class American homeowners? And, why is Obama trying to do it without warning, without discussion, without hearings — hidden in debt ceiling negotiations?

 

Obama uses words like “the rich” and “fairness,” but it’s important to understand that his goal of taking away the mortgage interest tax deduction won’t hurt his super-rich, jet-set contributors, like Jeffrey Immelt, CEO of G.E. His company made over $12 billion last year and paid zero U.S. taxes. Zero. But that doesn’t bother Obama. Obama’s plan to eliminate the mortgage interest deduction is aimed squarely at upper middle class American homeowners, small business owners, and retirees whose entire lifetime of hard work is tied to their home. Those groups will be devastated.

 

Obama is trying to play bait and switch. Obama’s policies support the ultra-rich (who contribute to him), while destroying small business competitors. Obama’s plan helps to wipe out his upper middle class political opposition, that is, those who pay their taxes, pay their mortgage, raise their families and love their country. Those are the people who support fiscally conservative candidates and causes. So Obama demonizes and punishes them, calls them “rich,” and gets to starve his political opposition.

 

Drive through any upper middle class suburban neighborhood. These people are not rich. They are not private jet or yacht owners. They are not CEO’s of billion dollar public companies. They are independent contractors, professionals, or small business owners, who started with nothing, risked their own money on their ideas, and now work fourteen-hour days. Even with all that hard work, they can only hold onto their homes, businesses and dreams because of the mortgage interest deduction. Take that away, their lives become unglued, and they lose everything.

 

An income of $150,000 to $500,000 sounds nice. But the reality is all it does is pay for a life well lived. It pays a mortgage, two cars, groceries, perhaps a country club membership, private school, and in my case — a daughter at an Ivy League university. I work fourteen hours a day to survive and pay the bills. I like to call it “being poor, but at a higher level.”

 

Like all of my small business friends, I worry about my bills every month. These aren’t the spoiled-brat, lucky-sperm-club kids that Obama and I attended Columbia University with…who now happen to be his biggest campaign contributors. The people Obama is trying to hurt are the “Heart of America.”

 

They are also the economic engine of America. All the small business owners and independent contractors living on their $150K to $500K incomes are buying most of America’s homes, cars, stocks, and consumer goods. They are creating most of America’s jobs. Without this upper middle class there is no U.S. economy.

 

Obama’s bleeding heart leftist campaign contributors and golf buddies live very different lives — they own homes they bought for cash with inheritances or stock options. The rest of the country is living in homes that are financially underwater and unsellable for years to come. We survive and hold onto our homes and businesses in this Obamageddon economy because of our mortgage deduction. Without that tax break, we don’t make it to tomorrow.

 

For most upper middle class families that Obama loves to demonize as ‘the rich’, their home is their biggest asset. Without the deduction, their home value plummets, and there’s no longer a reason to continue paying a bloated mortgage. Say goodnight to real estate for decades to come. “The rich” would become poor overnight.

 

 

Most of the small business owners I know are mortgaged to the hilt. They took on that debt because of the mortgage deduction. It was dangled in front of us as the last legal tax shelter. The double crush of losing 35% of the value in their homes overnight, plus paying much higher taxes, while their mortgage stays the same, would devastate and bankrupt most of the upper middle class. Only a “community organizer” who has never run a business or created jobs would even consider such a draconian proposal. Unless, of course, it’s all part of a purposeful plan to create crisis, overwhelm the system, and starve the political opposition.

 

If Obama and the Democrats succeed in taking away the mortgage deduction, millions of upper middle class Americans will walk away from their homes and mortgages. And if you think banks are insolvent now, can you say bankruptcy squared? B of A would have to change its name to B of No A (for Bank of No Assets).

 

Who gets crippled? Banks, developers, realtors, plumbers, electricians, landscapers…all out of business. Consumer spending will come to a halt. On and on it trickles down. Tax revenues will plummet, the debt will skyrocket. Is that how a “community organizer” thinks you create jobs?

 

If you think the economy is bad now, wait until Obama gets his way. We’ll all be “community organizers.” It will be the only job left.

 

The real question is, is Obama simply ignorant, or is this part of a purposeful plan to punish and weaken the people who contribute to conservative candidates and causes?

 

 

 

 

Wayne Allyn Root is a former libertarian vice presidential nominee. He now serves as chairman of the Libertarian NationalCongressional Committee. He is the best-selling author of “The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gold & Tax Cuts.” His website: ROOTforAmerica.com