Tax panel could shrink mortgage benefits

In an effort to make a simpler and fairer tax system, the President's tax advisory panel has recommended that the popular mortgage interest deduction be eliminated and replaced by a tax credit equal to 15% of the amount of interest paid by a homeowner during the year.

Mortgages eligible for the tax credit would be limited to an amount calculated as a regional housing value. In addition, mortgage interest for home equity lines and second homes would not be eligible.

State and local property tax deductions would also be eliminated.

more