Impact on the Home Mortgage Interest Deduction (HMID)

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The "0/100 Rate" Tax Plan radically simplifies the tax code by eliminating all individual itemized deductions, including the Home Mortgage Interest Deduction (HMID).

Under the legacy system, taxpayers can deduct interest paid on up to $750,000 of home loan debt if they itemize. By consolidating all individual tax rules into a single two-tiered marginal system ($0 to $100,000 at 0%, and 20% flat above), the need for itemizing is entirely abolished. 

 

Why This Loss Does Not Hurt the Working Class

While losing a major deduction sounds alarming on paper, the architectural design of the plan ensures that middle-income homeowners are far better off:

• The $100,000 Exemption Outweighs the Deduction: The current standard deduction only protects up to $15,000 to $30,000 of income from taxes, depending on filing status. By exempting the first $100,000 of income entirely, the plan shields up to three to six times more income than the legacy standard deduction and HMID combined for the average household. 

• 0% Burden for 70% of Families: Because roughly 65% to 70% of American households earn under $100,000, they will have a 0% federal income tax liability. A tax deduction is entirely useless if your baseline income tax rate is already zero. 

 

The Effect on High-Income Borrowers & Real Estate

For individuals earning well above the $100,000 threshold who buy luxury homes, the elimination of the HMID serves as a deliberate revenue-raising mechanism:

• Base Broadening: Eliminating this deduction prevents wealthy taxpayers from using massive multi-million dollar mortgages as a paper shield to lower their tax bills on income sitting in the 20% flat bracket.

• Market Stabilization: Historically, the HMID artificially inflated home prices by subsidizing larger mortgages. Removing it strips out artificial debt incentives, encouraging healthier, cash-driven real estate valuations while making entry-level housing more accessible to the working class who no longer pay a single dime in federal income tax.