It’s Saturday afternoon and I’m gathering my personal financial data as I prepare to meet with my accountant to complete my income tax returns. I don’t know anyone who relishes this chore, but at least we only suffer through it once year. A little while ago I came upon my bank statement indicating how much interest I’d paid during calendar year 2008 as part of my mortgage payment. It struck me, as it always does, that without mortgage interest deductibility the taxes I owe would be significantly greater. NAR has consistently maintained a policy that if MID were taken away from owners that property values would drop. Moreover, one of the major incentives to homeownership would be lost.
The National Association of Realtors® understands that homeownership is a basic underpinning to our country’s economic wellbeing. That is why, year after year, NAR has stood shoulder to shoulder with property owners in the halls of Congress as The Voice for Real Estate® protecting the retention of MID.
If anyone believes the recent suggestion that there be a reduction of MID for home mortgages at the “upper level” won’t trickle down to every level of property ownership then we need only to remember how the sale of properties at every level affects every other level. Property sales also affect nearly every other component of our economy as well. More succinctly, a reduction in demand will not only decrease property values at the “top end” but it will filter down to lower priced properties affecting everyone that buys, sells or owns property. At a minimum, there would be a loss in value equal to the present value of the tax benefit being taken away. In the early years of homeownership or in cases where buyers borrow to finance the majority of a property’s value the loss of MID could actually place the property’s value lower the original purchase price. It is estimated that the total current present value of MID using reasonable discount rates is approximately $90 to $133 billion. Such a loss in current home values would harm an already fragile market.
There are many reasons to retain mortgage interest deductibility. For a more complete discussion regarding MID and its attributes I would encourage you to visit www.realtor.org. For now…I need to finish my taxes. Uncle Sam is calling!!! – Jim Helsel, 2009 NAR Treasurer
Let’s get rid of income tax altogether! THAT MAKES MORE SENSE!! FAIRTAX enables workers to keep entire paychecks FAIRTAX enables retirees to keep entire pensions FAIRTAX refunds in advance the tax on purchases of basic necessities FAIRTAX allows American products to compete fairly FAIRTAX brings transparency & accountability to tax policy FAIRTAX ensures Social Security & Medicare ……funding FAIRTAX closes all loopholes & brings fairness to taxation FAIRTAX abolishes IRS. I urge you to vote for FAIRTAX!! Thank you!