Home Builders Push to Keep Mortgage Interest Deduction

In response to talk in Washington of reducing the mortgage interest deduction, the National Association of Home Builders (NAHB) urged House Representatives to co-sposor a resolution in support of the longstanding deduction.

The resolution, H. Res. 25, shows support for the tax deduction, which an estimated 40 million Americans claim each April 15. President Obama’s 2012 budget proposal, released in February, included a provision to reduce the deduction.

“This resolution acknowledges the importance of homeownership to individual households, the economy and the nation,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. The resolution also states that the mortgage interest deduction “may well be the most important component of housing-related tax policy in America today” and should not be further restricted, he said.

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“The mortgage interest deduction has been a cornerstone of the nation’s housing policy for almost a century, and it is vital to homeownership and healthy housing markets,” Nielsen added. “NAHB commends Rep. Gary G. Miller (R-Calif.), who introduced the resolution, and the more than 40 co-sponsors for their commitment to homeownership and support for the deduction.”

By an estimate from Congress’ Joint Committee on Taxation, the deduction will save taxpayers roughly $600 billion between 2009 and 2013.

“Eliminating or restricting the mortgage interest deduction would erase the emerging stability in the nation’s housing markets, increase the cost of homeownership, make the tax code less progressive and essentially raise taxes on the middle class. Ultimately, it would put more home owners underwater, fuel more foreclosures and impede job creation in the housing sector, where unemployment is about twice the national rate,” said NAHB.

NAHB has also launched a website devoted to saving the interest deduction: http://savemymortgageinterestdeduction.com/.

To view NAHB’s statements, click here.

Written by Elizabeth Ecker

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  • Whoever provided Elizabeth with the following information did not get it right: “…included a provision to reduce the deduction from 35% to 28% for married households earning more than $250,000….” First of all if itemized deductions exceed the standard deduction, the home mortgage interest deduction is a 100% deduction against income as it has been for decades. While I am not familiar with the bill Elizabeth is discussing, it would not be unthinkable that some in Congress would want to keep the benefit at 28% and not allow it to fully offset taxable income at a rate greater than 28%.

    Like the itemized deductions for charity, taxes, other types of deductible interest, medical, casualty losses, and miscellaneous itemized deductions, Congress and the President have the right to giveth and to taketh. However, unless there are offsetting tax benefits, it would seem that the rational for such radical changes would be to instigate class warfare from both the far right and the left.

    Late in his second term President Reagan achieved a reduction in many itemized deductions while working with House Ways and Means Committee Chairman Dan Rostenkowski (D-IL) and Senate Finance Committee Chairman Bob Packwood (R-OR). Both Representative Rostenkowski and Senator Packwood were considered by their parties as liberals. In fact Senator Packwood was so liberal that in 1971 (two years before Roe Vs. Wade) that he introduced the first Senate bill to legalize abortion but could not find a single cosponsor, Republican or Democrat.

    The attitude of working together in Washington is a quality greatly lacking in Washington. It seemed to have left Washington the day President Reagan retired to his ranch in the Santa Ynez Mountains of Santa Barbara County of central California, reappearing occasionally now and then.

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