|
Opposition Against Tax Overhaul Mounting on Capitol Hill
As the Administration weighs a proposal by its advisory tax reform panel to abolish mortgage interest and state and local tax deductions and replace them with a much more limited 15% housing credit, members of Congress from both sides of the political aisle are starting to voice strong opposition to the plan, and concerned citizens are being encouraged to follow suit.
Last week, eight Republican members of the tax-writing House Ways and Means Committee sent a letter to Treasury Secretary John Snow urging the White House to “preserve some important incentives for homeownership investment that clearly work.” (To read the letter, click here.)
“While many investment opportunities exist today,” the correspondence states, “perhaps none provides more in return for individuals, families and communities than homeownership. That is why we urge you to preserve the deductions for mortgage and home equity interest, and state and local taxes, which underpin homeownership and the social and economic benefits it generates.”
Ways and Means Committee members who signed the letter opposing removal of the housing tax incentives were: Reps. Jerry Weller (R-Ill.), Kevin Brady (R-Texas), Eric Cantor (R-Va.), Mark Foley (R-Fla.), Wally Herger (R-Calif.), Nancy Johnson (R-Conn.), Ron Lewis (R-Ky.) and Clay Shaw (R-Fla.).
Late last month, Rep. Charles Rangel (D-N.Y.), the ranking member of the Ways and Means Committee, wrote the President warning that buyers may decide to defer home purchases if they believe that the “benefit of the deduction may be dramatically reduced by being converted to a 15% tax credit.”
In addition, Reps. Katherine Harris (R-Fla.) and Robert Wexler (D-Fla.) sent a joint letter to the Administration opposing the proposal to restrict tax deductions for mortgage interest, and 25 members of the New York State congressional delegation, in a written communique to Treasury Secretary John Snow, voiced their opposition to the elimination of the deduction for state and local taxes and the elimination of the mortgage interest deduction.
The White House and Treasury Department have yet to comment on the proposal. While President Bush is under no obligation to follow the recommendations of his tax panel, which is also calling for doing away with deductions for home equity loans and second homes, he is widely expected to embrace the concept of tax reform during his State of the Union address in January.
When the panel’s proposal was unveiled on Nov. 1, NAHB Executive Vice President and CEO Jerry Howard voiced strong opposition, warning that it amounted to the “biggest tax hike for home owners ever considered.”
“Equally disturbing,” he said, the plan “would reduce home values, eliminate one of the few tools (the Low Income Housing Tax Credit) available to construct or renovate affordable rental housing and send a chill through the housing market, which has been leading the economic expansion for the past three years.”
As previously reported, NAHB has conducted detailed scenarios analyzing how typical home-owning families in Chicago; San Jose, Calif; and Binghamton, N.Y. would face tax hikes under the proposal.
In addition, results from a national survey commissioned by NAHB and conducted earlier this month by Public Opinion Strategies found overwhelming voter disapproval of replacing tax incentives that promote homeownership with incentives to invest in the stock market. (Click here for survey results and examples showing how home owners would fare under the tax plan.)
Contact Your Members of Congress
Voters troubled over how these recommendations would affect their bottom line and home values are encouraged to contact their members of Congress and the Administration before policy makers begin to craft their own legislative proposals.
It is particularly important to urge members of the House Ways and Means Committee and Senate Finance Committee to oppose the advisory group’s tax plan.
To voice your opinion to Capitol Hill lawmakers, call the U.S. Capitol Switchboard at 202-224-3121 and then ask for your member of Congress.
Or send a letter to President Bush and your federal lawmakers asking them to reject the panel’s recommendations by logging on to www.capitolconnect.com/nahb.
For more information, go to www.nahb.org/taxreform; or e-mail NAHB tax counsel Jim Tobin, or call him at 800-368-5242 x8258.
|
