By Bob Jones, Chairman of the National Association of Home Builders - 06/15/10 11:58 PM EDT
Should the ax fall on the home mortgage interest deduction, as suggested in “Ax may fall on tax break for mortgages” (June 8), millions of middle-class families will find their necks caught on the chopping block.
Policymakers desperate to find ways to help close the massive federal budget deficit would be wise to avoid tampering with this cornerstone of U.S. housing policy.
At a time when the housing market is struggling to emerge from the worst downturn in decades and the fledging economic expansion remains in doubt, it makes absolutely no sense to alter long-standing tax policy that would result in falling house values, lower homeownership rates and steeper housing costs for millions of households nationwide.
As for the widely held belief that the mortgage interest deduction primarily benefits upper-income taxpayers, 2007 IRS data reveal 64 percent of families who claim the deduction earn between $50,000 and $200,000 annually.
The deduction benefits all types of homeowners, particularly younger buyers, who tend to have modest incomes and growing families and are still building equity in their homes.
While it is vitally important to take prudent steps to get the nation’s fiscal house in order, changing the mortgage interest deduction is not the answer.
It would derail the nascent housing and economic recovery and place an even greater burden on hard-working American families who are struggling to make ends meet.