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Panel Wraps Up Tax Reform Recommendations
The President’s Advisory Panel on Tax Reform is scheduled to present its final report to overhaul the tax system to the Treasury Department on Nov. 1.
NAHB believes the plan would have far-reaching implications for home owners, the housing sector and the economy. (For NAHB Executive Vice President Jerry Howard's commentary on the expected tax reform proposals, click here.)
The panel is likely to call for the elimination of the mortgage interest deduction and state and local property tax deductions, as well as other changes to the tax code that are unfavorable to housing and homeownership.
The Low Income Housing Tax Credit, the nation’s premier program for the production of affordable housing, would be abolished under the proposed new tax system.
The panel was also expected to rescind the current deductions for home equity loans and second homes.
In lieu of these popular housing tax incentives, the panel has been considering the creation of a mortgage interest tax credit of 15% that would be capped based on the current FHA loan limits, which range from roughly $172,000 up to $313,000 in high-cost areas.
The Treasury Department is expected to analyze the package over the coming months and President Bush is under no obligation to follow the panel’s recommendations. It is anticipated that early next year, the White House will decide which ideas to adopt, if any, for a tax overhaul plan the President can embrace.
For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.
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