Luke Mullins with U.S. News & World Report is reporting on his blogthat the Obama administration is proposing to limit the mortgage interest deduction for households in the 33% and 35% tax brackets.
The Wall Street Journaldetails the plan as, "Households paying income taxes at the 33% and 35% rates can currently claim deductions at those rates. Under the Obama proposal, they could deduct only 28% of the value of those payments".
Not surprisingly, the NAR and President Charles McMillan are up in arms. In a recent email McMillan wrote, "NAR is launching a multiphase plan of action to eliminate this provision from the budget plan. In the next 24 hours, NAR will be expressing our concerns directly to President Obama, to all members of the United States House of Representatives and the Senate, placing advertisements in the publications read by Washington, DC decision makers. Additionally, NAR will be forming a coalition with other groups affected by this proposal."
For the first time in a long time I agree with Charles McMillan.
First, now is not the time to be raising taxes, period. The first rule of economic contractions is that you don't raise taxes on the American people, I don't care what tax bracket they are in.
Second, you don't raise taxes on real estate related holdings during a housing depression, which is what this would be doing. It will be eliminating a tax deduction, which is also known as raising taxes.
As demand for real estate continues to contract, property values erode, and this economic and banking crisis continues to destroy our financial landscape, the government needs to look at ways to increase the value of real estate both for homeowners as well as investors. This legislation would make real estate less valuable for millions of Americans.
Comments(11)