A Nation of Renters, or Homeowners?
Thousands of REALTORS® descended on the nation’s capitol this week to ask Members of Congress to continue policies that encourage homeownership. Recent tax reform proposals have threatened to diminish the pro-housing tax incentives that have been a mainstay of housing policy for over 100 years.
In order to simplify the tax code, some lawmakers propose to eliminate the income tax deductions for state and local sales and property taxes, and in return raise the standard deduction available to individuals and families. While this plan doesn’t amend the widely used and popular mortgage interest deduction (MID), it diminishes the value of this deduction to many middle class taxpayers.
“We promote home ownership because it is good for families and good for building financial security,” commented Georgia Wall, broker with John L. Scott real estate and Vice President of Government Affairs with the Seattle King County REALTORS®.
Wall joined dozens of REALTORS® from King County in visiting the offices of Senator Patty Murray, Representative Suzan Delbene and newly elected representative Pramila Jayapal. Upon visiting with the REALTORS®, a staff member with Congresswoman Delbene remarked said, “It is ironic that we are going after deductions that help grow our communities.”
A recent analysis by PricewatershouseCoopers (PwC) shows that middle income homeowners would be worse off under the proposals that diminish the value of the MID, paying an average of $815 more in federal income taxes. Statistics from the IRS show that 88% of all those claiming the MID earn less than $200,000, and that homeowners pay 80-90% of all federal taxes.
“We recognize the critical value of the mortgage interest deduction,” concluded a representative from the office of Senator Patty Murray.
— Washington REALTORS® (@washrealtors) May 17, 2017