[Congressional Record Volume 145, Number 52 (Thursday, April 15, 1999)]
[Senate]
[Page S3764]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          MORTGAGE DEDUCTIONS

  Mrs. LINCOLN. Mr. President, on tax-filing day, it is customary for 
Senators to note the many difficulties that taxpayers have complying 
with a complex and unwieldy tax system. I plan to highlight some 
problems with the system later today. But I do think it is important, 
however, to note that some aspects of our system have worked very well.
  Since the Internal Revenue Code was enacted in 1913, the tax system 
has provided a deduction for mortgage interest. The mortgage interest 
deduction is one of the simplest, most widely available, and most 
widely understood of all the provisions in the Code.

  What is important about the deduction is the support it provides for 
a goal that is of paramount importance to all Americans--Homeownership. 
Just five years ago, the rate of homeownership was declining in our 
country. Beginning in late 1997, however, the rate of homeownership 
began to climb, so that now, a record number of American families own 
their own homes. For the first time in our history, two-thirds of all 
households own their own homes. Where has the growth in homeownership 
been most evident? Every age group has expanded its ownership, and, 
even more importantly for the future of our country, the two categories 
of homeowners that have seen the greatest rates of growth are first-
time homeowners and minorities. It is also notable that within 6 years 
of naturalization, foreign-born individuals achieve the same rate of 
homeownership as the nation at large. This is a great achievement that 
shows that the American Dream is alive and well.
  When asked why they want to own their own homes, Americans in all 
parts of the country note that ``Owning my own home is the American 
dream. That is what it all boils down to, that I own my own home.'' 
They do not buy a home to get tax breaks. They buy a home to attain a 
sense of community. Neighborhoods that have a high rate 
of homeownership have high rates of voting, participation in schools, 
and lower crime rates.

  It seems that we all complain a great deal about the complexity of 
the tax system. I think that a great deal of this tax code ridicule is 
justified. The U.S. Tax Code now consumes more pages than eight Bibles. 
It is generally too complicated and unfair for most taxpayers. I too 
believe that the tax code must be streamlined but only while preserving 
important taxpayer deductions such as the home mortgage deduction. It 
is important to note that, as far as the tax code goes, one of the 
easiest steps in the computation process is the mortgage interest 
deduction. Unlike many more recently created tax breaks, the mortgage 
interest deduction presents no difficult formulas, calculations, or 
income limits for taxpayers who utilize the deduction. The lender 
simply provides the interest and property tax amounts to the homeowner 
on a Form 1098. The taxpayer then simply transfers these two numbers 
from the form on to their tax return.
  Among the taxpayers who itemize their deductions, 28 million used the 
mortgage interest deduction in 1995, the most recent year for which 
statistics were available. In that group, 71% had incomes below 
$75,000, and 42% had incomes below $50,000. Clearly, the mortgage 
interest deduction is a significant benefit for middle class taxpayers.
  Homeownership is a cornerstone of American life. The tax code has 
always supported that goal and facilitated the great achievements we 
have made. The stability and simplicity of the tax policies supporting 
homeownership have played a crucial role in the progress we have made 
in keeping the American Dream alive.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call.
  Mr. McCAIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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