Quicken Loans founder: I agree with Gary Cohn — mortgage deductions aren't why people buy homes

Key Points
  • Dan Gilbert echoes a comment from National Economic Council Director Gary Cohn in addressing changes in the GOP's tax reform plan.
  • "To me, it's about the net number" paid in taxes as a percentage of income, says Gilbert.
  • Changes under the new GOP tax plan would make the mortgage deduction less attractive.
Quicken Loans founder Dan Gilbert: As long as rates are reasonable, mortgage deduction going away doesn't matter

Billionaire Quicken Loans founder and Chairman Dan Gilbert said Friday that people don't buy homes because of the mortgage interest deduction, echoing a comment from Trump economic advisor Gary Cohn about the GOP tax overhaul.

Gilbert, also the owner of the NBA's Cleveland Cavaliers, was responding to a question on CNBC's "Squawk Box" about changes that could make the mortgage deduction less attractive under the new Republican plan, which aims to cut and simplify personal and business taxes.

The framework keeps the mortgage deduction, which taxpayers can only claim if they itemize. But given that the GOP proposes to double the standard deduction, which would shield double the income from being taxed than the current level, people may choose the new higher standard deduction instead of itemizing.

The mortgage deduction is a "nice thing to have," Gilbert said, but added he would rather have an overall lower tax bill, which GOP tax writers contend would happen under their plan, than pay a tax and get a deduction. "As long as rates are at a reasonable level," he continued, "it's about the net number" paid in taxes as a percentage of income.

Cohn, director of the White House National Economic Council, said on Thursday, "People don't buy homes because of the mortgage deduction." He claimed, "The No. 1 reason why people buy homes is they're excited and optimistic about the economy."

The GOP tax plan was unveiled on Wednesday.

In addition to his involvement at Quicken and the Cavs, Gilbert is also chairman of Rock Ventures, the umbrella organization for his portfolio of business and real estate investments.