Dec. 2, 2010
REALTORS: Mortgage Interest Deduction Vital to Home Ownership, Economy
Special to Huntingtonnews.net
In response to proposed legislation by the federal government that would reduce or eliminate the mortgage interest deduction (MID) on federal income tax returns, Ron Phipps, the president of the National Association of Realtors (NAR) issued the following statement on Wednesday, Dec. 1, 2010:
“As the leading advocate for housing and home ownership issues, NAR firmly believes that the mortgage interest deduction (MID) is vital to the stability of the American housing market and economy.
“The MID must not be targeted for change. NAR is actively engaged on behalf of the nation’s 75 million home owners and 1.1 million Realtors to ensure that the current deduction is not modified as was recommended in the Deficit Reduction Commission report released today.
“The tax deductibility of interest paid on mortgages is a powerful incentive for home ownership and has been one of the simplest provisions in the federal tax code for more than 80 years. In a new survey commissioned by NAR and conducted online in October 2010 by Harris Interactive of nearly 3,000 homeowners and renters, nearly three-fourths of homeowners and two-thirds of renters said the mortgage interest deduction was extremely or very important to them.
“Recent progress has been made in bringing stability to the housing market and any changes to the MID now or in the future could critically erode home prices and the value of homes by as much as 15 percent, according to our research. This would negatively impact home ownership for millions of Americans, including those who own their homes outright and have no mortgage.
“Any further downward pressure on home prices will hamper the economic recovery, raise foreclosures and hurt banks’ abilities to lend and likely tip the economy into another recession resulting in further job losses for the country. It will effectively close the door on the American dream.
“NAR will remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest.”
Editor's note: The mortgage interest deduction is available only to those who itemize deductions, most often on the full form 1040. Most lower and middle income people take the standard deduction; only higher income people itemize their deductions. For a Canadian perspective on the debate over eliminating the MID, see: http://www.ctv.ca/generic/generated/static/business/article1819752.html. Canadian taxpayers cannot deduct mortgage interest on their federal returns....and the homeownership rate in Canada is comparable or higher than that of the U.S. In 2008, of the 12.4 million households in Canada, more than 8.5 million, over two-thirds (68.4 percent) owned their home, the highest rate since 1971. According to U.S. government figures, the rate is the U.S. in 2008 was 67.8 percent. Thanks in part to strict regulation of banks Canada has largely avoided the foreclosure crisis that has ravaged the U.S. Most observers believe that only a radical rewriting of the nation's tax laws, including the adoption of a plan like the Fair Tax, will solve this problem. Eliminating the MID was considered in the mid 1980s during the Reagan Administration when credit card interest deductions were eliminated, but the NAR and other organizations lobbied furiously to preserve the deduction. It has become a kind of "Third Rail" that legislators touch at their own political risk. Indiana Republican congressman Mike Pence, who is considering a run for the GOP presidential nomination in 2012, favors a flat tax: http://www.politico.com/news/stories/1110/45680.html.
For a pdf copy of the government report, click HERE
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REALTORS: Mortgage Interest Deduction Vital to Home Ownership, Economy
Special to Huntingtonnews.net
In response to proposed legislation by the federal government that would reduce or eliminate the mortgage interest deduction (MID) on federal income tax returns, Ron Phipps, the president of the National Association of Realtors (NAR) issued the following statement on Wednesday, Dec. 1, 2010:
“As the leading advocate for housing and home ownership issues, NAR firmly believes that the mortgage interest deduction (MID) is vital to the stability of the American housing market and economy.
“The MID must not be targeted for change. NAR is actively engaged on behalf of the nation’s 75 million home owners and 1.1 million Realtors to ensure that the current deduction is not modified as was recommended in the Deficit Reduction Commission report released today.
“The tax deductibility of interest paid on mortgages is a powerful incentive for home ownership and has been one of the simplest provisions in the federal tax code for more than 80 years. In a new survey commissioned by NAR and conducted online in October 2010 by Harris Interactive of nearly 3,000 homeowners and renters, nearly three-fourths of homeowners and two-thirds of renters said the mortgage interest deduction was extremely or very important to them.
“Recent progress has been made in bringing stability to the housing market and any changes to the MID now or in the future could critically erode home prices and the value of homes by as much as 15 percent, according to our research. This would negatively impact home ownership for millions of Americans, including those who own their homes outright and have no mortgage.
“Any further downward pressure on home prices will hamper the economic recovery, raise foreclosures and hurt banks’ abilities to lend and likely tip the economy into another recession resulting in further job losses for the country. It will effectively close the door on the American dream.
“NAR will remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest.”
Editor's note: The mortgage interest deduction is available only to those who itemize deductions, most often on the full form 1040. Most lower and middle income people take the standard deduction; only higher income people itemize their deductions. For a Canadian perspective on the debate over eliminating the MID, see: http://www.ctv.ca/generic/generated/static/business/article1819752.html. Canadian taxpayers cannot deduct mortgage interest on their federal returns....and the homeownership rate in Canada is comparable or higher than that of the U.S. In 2008, of the 12.4 million households in Canada, more than 8.5 million, over two-thirds (68.4 percent) owned their home, the highest rate since 1971. According to U.S. government figures, the rate is the U.S. in 2008 was 67.8 percent. Thanks in part to strict regulation of banks Canada has largely avoided the foreclosure crisis that has ravaged the U.S. Most observers believe that only a radical rewriting of the nation's tax laws, including the adoption of a plan like the Fair Tax, will solve this problem. Eliminating the MID was considered in the mid 1980s during the Reagan Administration when credit card interest deductions were eliminated, but the NAR and other organizations lobbied furiously to preserve the deduction. It has become a kind of "Third Rail" that legislators touch at their own political risk. Indiana Republican congressman Mike Pence, who is considering a run for the GOP presidential nomination in 2012, favors a flat tax: http://www.politico.com/news/stories/1110/45680.html.
For a pdf copy of the government report, click HERE
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