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Our View: Mortgage interest reform worth a look Wednesday Mar 8, 2017 at 12:01 AM A bill introduced in the Oregon Legislature that would limit the ability of some homeowners to deduct mortgage interest from their state income taxes has Republicans in a predictable froth, but the consequences wouldn't be nearly as dire as they claim and would provide a boost for housing programs aimed at struggling families. House Bill 2006 would eliminate the mortgage interest deduction for second or vacation homes — a reform that has been kicked around for years. There is no particular reason why the state should subsidize vacation home purchases for well-off Oregonians. The bill also would cap the annual interest deduction at $15,000 — meaning most Oregon homeowners wouldn't be affected at all. A coalition of groups supporting the bill offers examples of its effect: A couple earning $50,000, buying a $297,000 home — the state median — with 5 percent down would pay $12,000 in interest the first year and less thereafter, deducting it all. A Portland couple making $80,000 a year buying that city's median-priced home at $406,000 with the median down payment also would be able to deduct all the interest they paid. A family earning $180,000 buying a $600,000 home would pay $20,000 in interest the first year, deducting $15,000 of it. The amount they would not be able to deduct would come to about $40 a month. Homeowners with incomes greater than $200,000 if filing jointly would no longer be able to deduct mortgage interest. That provision could conceivably result in some hardship; a family income of $200,000 does not represent the lap of luxury it once did. That threshold could be raised a little higher. It's important to note that the bill would affect only state income taxes; mortgage interest would continue to be fully deductible from federal income taxes for every homeowner who itemizes. The extra revenue from these changes would be deposited in the Oregon Housing Fund, with 50 percent going to the Home Ownership Assistance Account, 25 percent to the General Housing Account and 25 percent to the Emergency Housing Account. If that money were put to use helping Oregonians afford a home who otherwise could not, or relieving emergency housing needs, it could help alleviate some of what is widely recognized as a housing crisis across the state. HB 2006 may not survive to achieve final passage. But it's not the attack on homeowners its opponents make it out to be.