I'm a white collar "information worker." I've been salaried, though not highly so, since I was in my early 30s, and was finally able to buy a house with my then-partner-now-spouse when I was 40. In addition to two decent salaries and accumulated savings, what made this possible was the mortgage interest deduction.
After we bought the house, we paid roughly the same amount for housing (in mortgage + interest; property tax and insurance added extra expense) as we had when we were renting. Yes, the monthly mortgage payments were higher than our rent payments had been, but the mortgage interest deduction that we claimed at the end of the year on our taxes reduced the annual expense to about the same as rent. No way could we have bought the house without the mortgage interest deduction to bring down the cost.
Ever since Mystery Mitt promised to offset his tax cuts for the rich by eliminating tax deductions without specifying which deductions he'd cut, speculation has run rampant that the mortgage interest deduction could be on his chopping block. The analysis by the Tax Policy Center reinforces that speculation. Given what I know about Mystery Mitt's sensibilities - and being passingly competent at arithmetic - I believe this to be true. A Mitt Romney Presidency would be a move toward a "landed gentry."
Landed gentry is a largely historical British social class, consisting of land owners who could live entirely off rental income. Often they worked only in an administrative capacity managing of their own lands.
I share personal financial information only with close family members and friends, so this anecdotal information suffers from small sample size, but we all agree on this ("we" are lower middle class to upper middle class current and former homeowners): eliminating the mortgage interest deduction would make homeownership more difficult, if not impossible, for us and people like us.
Suppose the Republicans do gain the Presidency, in addition to keeping the House (they probably won't regain the Senate, but let's stay focused and keep working at that, shall we?), and eliminate the mortgage interest deduction. The likely outcome would be the return of the landed class. We'd become a nation of landlords and renters, with few people able to afford their own home.
For the relatively few who could afford to buy property, there aren't any negatives. As the definition of "gentry" indicates, those who could afford enough property would probably live off the rental income. The more rental income they make, the more property they could buy. We've all been alerted to the perils of media consolidation, where a few voices dominate because of the number of channels carrying those voices. Imagine home ownership consolidation, in which property is consolidated into the hands of the few wealthy enough to afford it. Will local, state, or federal elected officials pay attention to the many renters they're supposed to represent the way they do to the few property owners in their district? Well, does Julie's Waffle House get as much attention in the halls of Congress as General Electric? Not only would property owners have a higher "wealth potential" than renters, they'd amass a disproportionate amount of political clout as well.
And without a strong regulatory framework in place to prevent landlords from turning into slumlords, property consolidation could make it harder for renters to find affordable housing that is both safe and appealing. After all, someone who owns most of the apartment complexes near an office park or college campus doesn't have much "market competition" to drive improvements, or much incentive to keep rents down. Without competition, "whatever the market will bear" takes on a whole new meaning. And property owners will use their poltical clout to ensure that "gubmint" doesn't force them to spend their money maintaining and improving their properties. They'll also see to it that rent control measures are soundly defeated at the ballot box and in council chambers.
For the many people who enjoy owning their own home, and the many who hope to own their own home someday, eliminating the mortgage interest deduction puts home ownership even more out of reach for many than it is today. And putting home ownership out of reach is the true killing of the American Dream.